In what firm CEO Henry Nassau called a “milestone year,” Dechert passed the $1 billion revenue marker in the midst of a lateral hiring spree.
Gross revenue grew by 4.5 percent, to $1.02 billion in 2018, up from $977.9 million in 2017. Revenue per lawyer increased by 3.2 percent, to $1.09 million.
Profits grew at a slightly slower clip. Net income increased by 3.5 percent, to $447.67 million in 2018, compared with $432.5 million in 2017.
Profits per equity partner, at $2.73 million in 2018, increased by 1.7 percent from the year before.
Nassau said the firm’s hours were up 6 percent in 2018, while rates increased in line with industry averages. Geographically, he said, it was a particularly good year for Dechert’s Philadelphia, New York and London offices.
In terms of practice areas, litigation was the most robust, Nassau said, but corporate practices, especially those affected by activity in capital markets or mergers and acquisitions, also had a good year.
He highlighted “sophisticated” matters handled in 2018, such as Dechert’s representation of CVS Health Corp. as it faced scrutiny over its merger with Aetna, and its work for longtime client SK hynix Inc., which acquired a unit of Toshiba’s business for $18 billion.
Nassau said the 2018 revenue growth can be attributed in part to the firm’s lateral hiring strategy but noted those additions would have had a greater effect on the numbers if not for the delay in collections typical in a lateral move.
“There’s always a lag when you bring someone in,” he said. With that in mind, looking ahead to the rest of 2019, “we think it’s going to be a shoot-the-lights-out year,” he said.
While the firm has aimed to remain “efficient,” he said, it has not sought out cost-cutting measures. And, in 2019, it was among the firms that matched market-leading associate salary increases—which Nassau called a “delightful” expense, noting the importance of associates to the firm.
Looking for Teams
Dechert added 26 lateral partners in 2018, making it “a very substantial growth year,” Nassau said.
The most significant was the addition of 21 products liability lawyers from Quinn Emanuel Urquhart & Sullivan, beginning with Sheila Birnbaum and Mark Cheffo, who had been co-chairs of Quinn Emanuel’s products liability group, joining Dechert in May.
And throughout the year, Dechert added several senior-level hires in Washington, D.C. Those included the former chair of Hughes Hubbard & Reed’s international trade practice, F. Amanda DeBusk, who brought partner Melissa Duffy with her.
Other hires included international private equity lawyer Timothy Clark, who rejoined Dechert in New York as a partner after a decade at two other firms, and Steven Rabitz, a former in-house lawyer for The Goldman Sachs Group Inc. and Lehman Brothers Holdings Inc., who brought his employee benefits practice from Stroock & Stroock & Lavan to Dechert in June.
Outside the U.S., former New York federal prosecutor Roger Burlingame joined the firm’s London office from Kobre & Kim. And the firm brought on its first real estate attorneys in Dubai over the summer, hiring a pair of lawyers from King & Spalding.
As for growth in the coming year, Nassau said Dechert will continue to seek opportunities to hire in key locations and practices, including internal investigations, capital markets, private equity and life sciences. Diversity also is a major factor in assessing the firm’s talent pool, he noted.
The firm’s lateral recruiting strategy has become more focused on teams of lawyers, he said, looking at “fewer ones and twos.” To that end, acquiring a firm of 20 to 40 lawyers might be of interest, but a merger of equals is much less likely, he said.
“We are open to anything that is consistent with our strategy and growth. We’re a global firm,” Nassau said. “We have been approached by many firms. … We haven’t seen anything we would say is accretive.”
Because of the firm’s global footprint, Nassau said, he is watching developments like Brexit and nationalist movements around the globe with concern. But, “at least through today, everything seems to be going on robustly,” he said.
“We haven’t seen any cracks in client demand yet,” Nassau said.