Because Hunton Andrews Kurth was formed April 2 of last year, there are no fiscal year 2017 revenue and net income numbers to compare with 2018 results.
But 2018 revenue per lawyer and profits per equity partner at the combined firm landed very close to Hunton & Williams’ 2018 results.
The merged firm posted $197.5 million in net income for 2018, according to preliminary numbers. The firm’s fiscal year ended March 31.
RPL was $861,000 in 2018, relatively close to legacy firm Hunton & Williams’ 2017 RPL of $859,000. And Hunton Andrews Kurth had PEP of $1.097 million in 2018, not far from Hunton & Williams’ $1.095 million in 2017.
But the combined firm’s numbers fell short of Andrews Kurth’s 2017 RPL of $931,000 and PEP of $1.214 million.
“Frankly, given all the expense and time and disruption involved in a merger, this in my mind is terrific,” Hunton Andrews Kurth managing partner Wally Martinez said.
Martinez said one-time expenses of the merger totaled about $9 million and included the costs of consolidating lawyers in a few cities where each legacy firm had an office, moving to the same technology and phone systems, and eliminating some debt that Andrews Kurth had incurred in its 2016 acquisition of about 55 lawyers from New York intellectual property firm Kenyon & Kenyon.
Following the creation of Hunton Andrews Kurth, legacy Andrews Kurth lawyers moved to legacy Hunton offices in New York and Washington, D.C., Martinez said, and the opposite happened in Dallas and Houston.
Because of the consolidation, the firm paid one-time expenses associated with leases on the duplicate offices, as well as expansion and remodeling costs to accommodate all of the lawyers.
“It was important to bring the people physically together in those markets where we share offices,” Martinez said. By 2020, the firm will be done with those extra lease expenses, he added.
But beyond physical things, Martinez said the firm also dealt with other “healthy disruptions” over the year related to the goal of uniting everyone, such as more partner meetings, travel across offices, conference calls and client visits.
The work is paying off, Martinez said, in many ways. He said Andrews Kurth brought a long list of oil and gas clients to the firm, and legacy Hunton cybersecurity lawyers have been able to cross-sell to those clients. Additionally, the capital markets practices from the two firms have joined together well, he said.
Right before the big merger, Hunton announced it would launch a Boston office with a group of 14 lawyers from litigation boutique Manion Gaynor & Manning. That group joined the firm on the same day that Hunton and Andrews Kurth combined, and Martinez said lawyers in the Boston group have been working closely with litigation colleagues in Houston.
“These are the things you hope for, that you don’t expect,” he said.
Martinez said some other pleasant surprises included synergies between the tax practices at the firm.
He said the firm had plans for everything related to partner-to-partner integration. But what encourages Martinez is how lawyers have connected, particularly over the last six months. He said he is unaware of a single fight over which lawyer is listed as the coordinating attorney on a matter.
Hunton Andrews Kurth also made some significant lateral hires over the last year, Martinez said. They include energy regulatory partners Myles Reynolds and Tab Urbantke who joined the firm’s energy and infrastructure team in Dallas last summer from Vinson & Elkins; partner Erin Fonte in Austin, who joined in February from Dykema Gossett to co-lead the firm’s financial institutions corporate and regulatory practice; and finance lawyer Michael Zinder, who joined as special counsel in New York, coming from Willkie Farr & Gallagher.
The firm’s new fiscal year just started April 1, and Martinez said he expects some developments from 2018 will be beneficial to 2019 results. Those matters include a substantial amount of IP work for a significant financial services client and new work in the energy finances space for another significant financial services client.
There’s opportunity as well for lawyers in the firm’s Miami office to do litigation in Florida for a large oil and gas client. He said in-house lawyers from the client, and a Houston partner who has done work for that client for years, traveled together to meet with litigators in Miami to discuss the work.
Martinez said the legacy firms weren’t able to combine financial systems until November. That made more work for some administrators, as they had to run client work through dual conflicts systems, for instance, but it also enabled the firm to more easily track matters where lawyers from both legacy firms were involved. They tracked more than 500 joint matters during that time frame, he said.
“The first six months were of unbelievable change, unbelievable stress, unbelievable time disruption, but the last six months, you’ve really seen the thing come together as one law firm. Practitioners have discovered each other,” he said.