The Am Law 100, the Early Numbers: Profits Continue to Slide at Cadwalader

The Am Law 100, the Early Numbers: Profits Continue to Slide at Cadwalader

Gross revenue at Cadwalader, Wickersham & Taft fell 3.7 percent, to $463.5 million, in 2015, while partner profits declined 6.8 percent, to $2.06 million, the firm reported.

Revenue per lawyer also took a hit, dropping 2.8 percent, to $1.04 million. The firm added 11 new lateral partners last year, but overall lawyer head count decreased from 452 to 448.

The declines come after Cadwalader weathered a difficult 2014, with revenue flat and partner profits sliding 15.3 percent when compared with 2013.

Cadwalader’s managing partner, Patrick Quinn, still insisted that the firm was performing well.

“We are actually very, very pleased with the year that we had,” Quinn said Friday, adding that Cadwalader was “growing in smart ways.”

Quinn said the revenue generated by the firm’s corporate department was up 32 percent in 2015. The firm’s litigation department, he said, experienced a slowdown that was on par with industry trends.

By other metrics, including the firm’s culture, Cadwalader had a strong year, Quinn said. He cited its move from 47th to 14th place in The American Lawyer’s most recent associate satisfaction survey. Those gains have helped the firm attract strong midlevel associates and recruit a larger first-year associate class, he said.

Last year Quinn attributed its lower 2014 numbers in part to a lag in collections, explaining that the end of the year had been busy.

Quinn said the same was true of 2015.

“The high level of activity and inventory that we carried in 2015 certainly did materialize into revenue,” he said.

The first half of the year was strong financially for Cadwalader, but the firm hit a “slow patch” in the third quarter, Quinn said. The transactional and energy practices were less busy, and a major matter involving AriZona Iced Tea ended when the founders of the beverage company, one of whom was represented by Cadwalader partner Louis Solomon, reached a settlement that ended years of litigation.

Quinn said the firm hit its stride again in November and December and is once again begining the year ahead.

Last year was Quinn’s first as managing partner. His appointment became effective at the start of 2015, the same day M&A veteran Jim Woolery was named chairman of the firm.

Woolery, the former co-head of North American M&A at JPMorgan Chase, abruptly left Cadwalader the same month to co-found a new investment venture, leaving Quinn to manage the firm alone.

Quinn said Friday that he would remain the firm’s sole leader for the foreseeable future.

Cadwalader has long been known for its securitization practice, which took a big hit during the financial crisis when the firm was forced to lay off 130 associates.

Close to 30 percent of the firm’s attorneys continue to work in the securitization practice, which accounts for a roughly equal percentage of the firm’s revenue, Quinn said. Quinn is a veteran of the practice and has worked at the firm since he began his career in 1988.

Cadwalader had tapped Woolery to bulk up the firm’s M&A practice and diversify its transactional department, an effort that Quinn said is ongoing. Last year, he noted, the firm hired corporate takeover and defense specialist Richard Brand, who represented Pershing Square Capital Management when it acquired a 7.5 percent stake in Mondelez in August.

On the M&A front, Cadwalader represented Salix Pharmaceuticals Ltd. when it was acquired by Valeant Pharmaceuticals International Inc. in April.

Quinn said the firm has never seriously entertained a merger and continues to consider itself a full-service firm. He said he plans to invest in the litigation department and, like last year, predicted that this year will be better.

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