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Editor’s note: This report is part of Texas Lawyer’s coverage of the 2013 financial results of the 25 highest-grossing Texas-based firms as part of the AmLaw 100 and Second Hundred reports. Texas Lawyer will publish its Annual Report on Firm Finance on April 28. The American Lawyer, a Texas Lawyer affiliate, will publish full results for the AmLaw 100 in May. The AmLaw Second Hundred will be published in June.

Coming off a record-setting 2012, gross revenue at Houston’s Bracewell & Giuliani was flat in 2013, and net income dropped by 20.8 percent compared to 2012.

But Mark Evans, the firm’s managing partner, said the stellar financial results of 2012 gave the firm an opportunity last year to invest for the future.

“We are very bullish about ’14,” Evans said.

Bracewell’s gross revenue dipped 0.6 percent in 2013 because the firm has invested in two major ongoing contingency-fee matters that did not bring revenue to the firm in 2013, Evans said.

“It’s a timing issue,” he said.

The firm was nevertheless busy on the transactional side, Evans noted, with $18 million more in revenue in 2013 compared to 2012.

On the other side of the balance sheet, Bracewell’s net income declined in 2013, Evans said, in part because the firm invested $9 million to expand in London.

After starting 2013 with one lawyer in the London office, Bracewell hired eight partners and nine associates for its expanded and refurbished London location.

“It was a significant expense that we did out of cash flow for London,” Evans said, noting that he expects the office to grow to 25 lawyers this year.

Evans said the firm made so many lateral hires in London due to its strong energy practice.

“Energy is so important to us as a law firm. We realized we were really missing a bet with our international practice in the Middle East,” he said.

Evans said the plan to expand in London began in late 2011, and he personally made recruiting trips to London in 2011, 2012 and 2013. He said the firm also is looking to hire more lawyers in its Dubai office.

“We really think it’s going to be a situation where one plus one makes three. … We have 40 active energy matters in the London office right now for 22 new clients and 18 existing clients,” Evans said.

Gross revenue for Bracewell was $323 million in 2013 compared to $325 million in 2012; net income was $101 million last year, compared to $127.5 million in 2012.

The firm’s lawyer count improved slightly in 2013, with a full-time equivalent of 441 lawyers in 2013 compared to 432 in 2012.

Profits per partner averaged $1.29 million in 2013, down 11 percent from $1.45 million in 2012, while revenue per lawyer averaged $730,000 in 2013, down 2.7 percent compared to $750,000 in 2012.