Despite posting record gross revenue for the sixth straight year, Akin Gump Strauss Hauer & Feld saw other key metrics come in flat in 2018.
The Texas-founded Am Law 100 firm posted gross revenue of $1.07 billion in 2018, up 3.1 percent from 2017, when it was $1.04 billion. That gross revenue growth was almost directly in-line with head count growth. As a result, revenue per lawyer, at $1.21 million, was essentially flat, down 0.1 percent in 2018 from the year before.
Profits per equity partner (PEP), at $2.4 million, showed an increase of 0.7 percent from 2017, even as the equity partner tier shrank. The firm’s net income, at $445.3 million, declined by 4.1 percent in 2018, compared with 2017, when it was $464.4 million.
Still, Kim Koopersmith, the firm’s chair since 2013, said the firm was “pleased” with its 2018 performance.
“We crossed the billion-dollar mark in 2017 and we were really happy to have built on that. It’s six straight years of revenue growth,” Koopersmith said.
“We did take 2018 and view it as a year for investing,” she added. “We did that with a build-out of two of our largest offices in Dallas and in Washington, D.C., and made a major push on the IT front.”
Koopersmith said several practices were very busy during 2018 including trade, funds and financial restructuring. In particular, Koopersmith said the firm’s London office, where practices include financial restructuring, financial transactions, competition and trade disputes, had a “truly spectacular year” in all disciplines. Revenue in London was up almost 30 percent in 2018 compared with 2017, she said.
Firmwide, the financial restructuring practice “built to some pretty incredible momentum” in 2018, she said, with the firm handling debtor or creditor work in the restructuring of companies including FirstEnergy, iHeartMedia, Seadrill, Noble Group, Sears Holdings and Nine West Holdings.
On the corporate side, Koopersmith said the firm represented WMIH in its merger with Nationstar Mortgage Holdings; CenterPoint Energy in its $8.5 billion acquisition of Vectren Corp.; and Diamondback Energy in its $9.2 billion acquisition of Energen.
And, Koopersmith said, Akin Gump’s trade practice provides the firm with a significant advantage in the marketplace.
“It’s hard to overstate issues relating to sanctions, tariffs, export controls. You just think of the world we are currently living in,” she said, adding that the firm’s international trade practice has traditionally been focused in Washington, but is now robust in London, Hong Kong and on the West Coast.
She added that the London trade team is well positioned to deal with sanctions issues relating to Russia and Iran affecting multinational corporations.
The firm’s funds practice, representing clients such as private equity companies and hedge funds, was strong around the globe in 2018 and that work is continuing, according to Koopersmith.
Early in 2018, two big pieces of litigation came to a “pretty rapid conclusion,” she noted, but Akin Gump did refill the pipeline by the end of the year.
Additionally, Koopersmith said, the number of pro bono hours worked at Akin Gump increased by nearly 15 percent in 2018. “This continues to be what I see as a defining element of our culture,” she said.
On the expense side, the firm raised associate salaries at midyear, following the lead of Cravath, Swaine & Moore. It also invested in IT infrastructure “to take us through what we think are important changes in how law firms interact with their clients.”
Akin Gump made a number of notable hires in 2018, including a finance team in Hartford, Connecticut, and London; a class action defense group in San Francisco and Philadelphia, and a group of policy lawyers in Washington, D.C.
The firm had 885 lawyers on a full-time equivalent basis in 2018, up 3.1 percent from 858 in 2017, but the number of equity partners declined by 5.1 percent, with 185 in 2018 compared with 195 the year before. Koopersmith said that reduction in equity partners is due to retirements and some lateral moves.
Going forward, Koopersmith said she expects continued growth in London, Houston, Washington, D.C., and New York. The firm has 21 offices, with 20 percent of its lawyers located outside the United States.
Akin Gump is bullish on 2019, based on activity during the first few weeks of the year, Koopersmith said.
“We definitely saw a very strong January in terms of revenue,” she said, noting that she also likes the way the firm’s strengths align with timely issues in areas such as policy and white-collar crime defense. “I like the hand of practices we have,” she said.
Correction: An earlier version of this article misstated the number of offices Akin Gump has.