Baker & Hostetler posted double-digit increases in revenues and profits per partner for the third consecutive year in 2012, thanks to its massive assignment working on the liquidation of Bernard L. Madoff Investment Securities LLC.
The Cleveland-based firm’s gross revenues rose 16 percent last year, to $510 million, according to The American Lawyer‘s reporting. Its profits-per-equity partner, meanwhile, jumped 10 percent, to $930,000. Lawyer head count also rose 10 percent, to 810 lawyers. Revenue per lawyer increased 5 percent, to $630,000.
It appears that a huge portion of Baker & Hostetler’s 2012 revenue—as much as 30 percent—is connected to its work on the Madoff case, an effort led by partner Irving Picard. According to court filings, the firm was awarded $157 million in Madoff-related fees last year. (That sum reflects work done between June 2011 and June 2012.) It’s not clear, however, if the firm received its most recent fee award, which was approved by the court on December 19, 2012, in time to be included in last year’s revenue tally. Saying it does not discuss client fees, the firm declined to answer that question. All told, Baker & Hostetler has earned more than $367 million so far in Madoff-related fees, which are paid by the Securities Investor Protection Corporation and not deducted from the money being recovered for Madoff investors.
"The firm had a great year in 2012 with increases in activity in all our practice groups across the firm," Baker & Hostetler executive partner R. Steven Kestner said via email. "Litigation, intellectual property, and bankruptcy saw the largest increases." Kestner added, "Our non-Madoff revenue increased almost 10 percent last year. We added a number of strong laterals in many of our offices, including Chicago, Houston, New York, and Washington, D.C."
As The Am Law Daily reported last year, Madoff work made up 20 percent of Baker & Hostetler’s revenue in 2011, when the firm’s gross revenues jumped 14 percent and its profits per equity partner rose 11 percent. In 2010 the firm’s gross revenues climbed 17 percent, and its profits per partner soared 27 percent.
Last year also saw Baker & Hostetler play a major role in a long-running contingency case via its representation of a group of dairy farmers who filed antitrust suits against major milk processors. That work came to the firm with the arrival of partner Robert Abrams, who joined from the now-defunct Howrey in 2011. Although the fees in that case could top $100 million, Howrey’s bankruptcy trustee has indicated that he will try to recoup some of that money to help repay the firm’s creditors.
This report is part of The Am Law Daily‘s early coverage of 2012 financial results of The Am Law 100/200. Final rankings and full results for The Am Law 100 will be published in The American Lawyer‘s May 2013 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.