How high can Quinn Emanuel Urquhart & Sullivan fly? Since it first appeared on the Am Law 200 list in 2007, the firm has relentlessly climbed over its competition, establishing itself as a litigation powerhouse. And in 2011 it took another big leap. The firm’s revenue jumped 31 percent, to $723.5 million—the biggest percentage increase on our list—and profits per equity partner rose 15 percent, to $4.16 million. Only perennial chart-topper Wachtell, Lipton, Rosen & Katz can claim higher per-partner profits.
“People were busy,” says John Quinn, one of the founders of the litigation-only firm. “A lot of things went very, very well.”
Among them were more than 20 trials and some nice recoveries on contingency fees, which brought in $75–100 million last year. “There weren’t any home runs, but we had a lot of singles and doubles,” says Quinn about those fees. In most of these cases, the firm worked for a reduced hourly rate and got a contingency kicker. And although none of these cases generated a “bonanza recovery,” Quinn says, “we always do better than what an hourly fee would be.” (Quinn declined to name specific cases handled on a contingency basis.)
Quinn Emanuel’s long-standing willingness to negotiate alternate fees is just one aspect of its business model that sets it apart. It is still the sole Am Law 100 firm that practices only litigation, and it eschews a heavy management structure. “We still have just one committee, for contingency fees,” says Quinn.
The firm’s unusual decision not to take on big money-center banks as clients left it free to sue the financial industry after the 2008 crisis. (One exception is its work for Morgan Stanley. “We’re close to people there. We like them. We made an exception,” Quinn explains.) Quinn Emanuel is one of the market leaders representing insurers and holders of mortgage-backed securities in actions against the financial institutions that issued these products. Fueled by this burst of activity, the firm’s six-year-old New York office is now its largest, with 273 lawyers.
Although the firm’s head count grew by 41.6 percent, to 647 lawyers at the end of 2011, and it opened a new office in London in 2010 and in Washington, D.C., last year, Quinn says the firm is wary about growing quickly. “Our own self-perception is that we’ve been very deliberative in growth,” he says. “In London, we weren’t sure the litigation-only model would translate. We spent two years talking to people. And we probably looked at D.C. for 15 years.”
Even with this expansion, the firm maintains the highest profit margin of any firm on The Am Law 100—64 percent. Quinn points out that the firm doesn’t spend a lot on real estate—its Manhattan office is in the old New York Life building at the less-than-fashionable address of 29th Street and Madison Avenue—but it does pay at the top of the scale for associate salaries and bonuses.
Next on Quinn Emanuel’s expansion plans: building an international arbitration practice. Which means, if you’ve got a strong international arbitration practice, watch out.