Kaye Scholer saw its gross revenue fall by nearly 5 percent, to $400 million, its profits per partner dip by about 3 percent, to roughly $1.35 million, and its revenue per lawyer drop by 2 percent, to $965,000, in 2012, according to The American Lawyer‘s reporting. The figures marked the second straight across-the-board falloff for the New York–based firm.
Kaye Scholer cochair and managing partner Michael Solow says last year’s results were largely driven by the fact that the firm wrapped up several large litigation matters in late 2011 and early 2012, including a pair of major product liability cases for Pfizer, as well as the firm’s role in the massive docket over defective Chinese drywall.
"We are still heavily driven by our large case litigation, and in 2012 it was a year where we had finished off those cases and we were building back a portfolio that will carry us forward," says Solow. He adds that though the firm anticipated "95 percent" of the difficulties it wound up facing in 2012, it also suffered some unexpected partner departures. "Overall we had more partners leave this last year than we have traditionally had," Solow says.
The firm suffered a net loss of two equity partners last year, going from 126 to 124. (Overall attorney head count fell 3 percent, from 427 to 414.) The defectors included New York partner Leora Ben-Ami, who, in a move first reported by The Am Law Daily, led a group of patent litigators to Kirkland & Ellis in May. During their tenure at Kaye Scholer, Ben-Ami and her group handled major intellectual property disputes for clients including E.I. du Pont de Nemours and Company, Gilead Sciences Inc., Hoffmann-La Roche Inc., and Pfizer Inc.
Kaye Scholer is among the firms who are a part of Pfizer’s Legal Alliance—the 20 or so firms that are paid a flat rate for all the work they do for the pharmaceutical giant each year. When asked about the firm’s relationship with the company, Solow says, "We are still on [Pfizer's] list, we are still one their most significant providers, and we count them as one of our most important clients." As our Am Law Litigation Daily colleagues have previously reported, Kaye Scholer lawyers successfully defended a patent challenge by generic drug companies to the company’s cancer drug Tarceva in May.
Kaye Scholer’s IP litigation department suffered another significant loss in September, when, as the Lit Daily first reported, Washington, D.C., partner Alan Fisch left with a group of patent litigators to open his own trial boutique. Over the years, Fisch’s clients have included McDonald’s, Juniper Networks, General Dynamics, and Barnes & Noble. Asked about the D.C. litigator’s decision to open his own shop, Solow says: "I’m never happy to see our partners decide that they need to leave, but if they decide it’s best for them to do, then that’s what’s best."
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