In a year when Am Law 100 firms are regularly announcing year-on-year revenue growth in excess of 10 percent, Winston & Strawn’s 1.3 percent top-line nudge to $991 million in 2018 doesn’t initially look like much to celebrate.
But that is before you take into account the contingency fee windfall the firm received in 2017, which chair Thomas Fitzgerald said in an interview was nearly $100 million. Deducting those fees from the year-on-year comparison, Winston’s revenue bump last year would have been closer to 12 percent, Fitzgerald said.
Winston’s profits per equity partner were virtually flat at $2.16 million even as its equity partner head count rose nearly 9 percent to 152 partners, according to preliminary ALM data. Revenue per lawyer fell nearly 4 percent to $1.1 million.
The firm’s financial performance last year was aided by a lateral partner hiring spree that Fitzgerald led in 2017. The firm added more than 100 partners, he said, and those partners were largely in place during 2018, helping to “pick up the slack” from the one-off contingency fees.
“It was a tough road. We were focused on it,” Fitzgerald said of beating the firm’s 2017 financial performance. “We thought we had put in place the necessary people in the necessary markets and given them support and let them run. [But] it was not easy.”
The high-profile contingency fee win Winston secured in 2017 was for the firm’s work representing a beef manufacturing business in a libel suit against ABC News related to its reports labeling the company’s product “pink slime.” Though the size of the settlement in that case has not been disclosed, The Walt Disney Co. which owns ABC, said in a regulatory filing last year that it had paid $177 million more than its insurance coverage to settle the case.
Fitzgerald declined to specify Winston’s contingency fee in that case. He noted that the nearly $100 million figure in 2017 also included contingency fees from two other cases.
The firm used a portion of that money to invest in lateral hires in 2017, including launching a Dallas office with nearly 25 partners. That office today has nearly 70 lawyers, according to the firm’s website.
Fitzgerald said the firm had paused its lateral hiring campaign this summer to focus on integrating its new hires with the firm’s legacy partnership. But Fitzgerald has been back on the recruiting trail more recently and he said he has focused on growing domestically in Washington, D.C., and California and internationally in London and Hong Kong.
Winston has this year already made moves in those international markets, hiring former Orrick, Herrington & Sutcliffe corporate partner Anthony Riley in London and bringing aboard capital markets partner Khoon Jin Tan from Wilson Sonsini Goodrich & Rosati in Hong Kong.
The firm also is poised in 2019 to earn an eight-figure fee for its work winning an injunction barring the National Collegiate Athletic Association from capping education-related benefits for certain college athletes. The firm has asked for more than $24 million based on the firm’s historical billing rates and the more than 40,000 hours it says it put into the case.
That revenue could help Fitzgerald reach a revenue milestone that, three years ago, he set for the firm in 2019: $1 billion.
“We’ll do that this year, and we’ll satisfy another goal of the strategic plan,” Fitzgerald said. “And once we do that, we will sit down and focus on the future. But right now we are capturing some clients that we had not heretofore had.”