UPDATE: 2/12/14, 10:38 a.m. EST. The Globe and Mail reports that more than 20 Heenan Blaikie lawyers have agreed to join Dentons.
Two months after the collapse of its planned combination with McKenna Long & Aldridge and nearly a year after a three-way merger with Paris-based Salans and Toronto-based Fraser Milner Casgrain, Dentons reported Monday that gross revenue was essentially flat for its U.S. arm in 2013 and profits per equity partner were up 4.8 percent.
Dentons, which under its Swiss verein structure maintains five separate regional LLPs, said it had roughly $473 million in U.S. gross revenue last year, while its profits per equity partner hit $958,000. Revenue per lawyer in the U.S. rose 1.4 percent to $789,000, according to a press release issued by the 2,600-lawyer firm.
The disclosure of Dentons’ U.S. financial performance for 2013 came amid what a source with direct knowledge of the matter described as ongoing discussions about potentially taking on between 30 and 40 lawyers from dissolving national Canadian firm Heenan Blaikie. The Am Law Daily reported in a separate story published Monday that DLA Piper, another Swiss verein, had ended its own negotiations over hiring between 55 and 70 Heenan Blaikie lawyers in Calgary and Toronto.
Mike McNamara, U.S. managing partner of Dentons and the chair of the firm’s public policy and regulation group, declined to comment on a potential expansion in Canada other than to note that his firm’s operations in the country are headed by Canada CEO Christopher Pinnington. Five units covering the U.S., Canada, Europe, Hong Kong/Asia-Pacific and U.K., Middle East and Africa—some of whose fiscal years don’t close under April 1—make up the the Dentons global brand.
The Am Law Daily reported last year that Dentons global had $710.5 million in gross revenue during 2012, while profits per partner were $785,000. Last month filings with the U.K.’s Companies House revealed that the firm’s U.K., Middle East and Africa arm saw gross revenue dip slightly to $243 million in 2013, according to British legal news reports. (The American Lawyer’s annual Am Law 100 rankings published in May will include the gross revenue and partner profit figures from all five Dentons LLPs.)
While the extent of Dentons’ further Canadian expansion remains unclear, the firm has been busy over the past several days adding former Heenan Blaikie partners in Montreal and Toronto. On Monday, Dentons confirmed its hire of former Canadian Prime Minister Jean Chrétien, a Heenan Blaikie counsel for the past decade.
“Mr. Chrétien is a renowned global leader bringing his international experience and diplomacy to our Dentons team,” Dentons global CEO Elliott Portnoy said in a statement announcing the move. “We greatly look forward to working with him, as will our clients.”
Chrétien will join Dentons’ Ottawa office, which the firm acquired last year through its merger with FMC. Dentons adopted its current name after completing that deal, the latest in a series of tie-ups by the firm that began in 2010 when predecessor Sonnenschein Nath & Rosenthal combined with London-based Denton Wilde Sapte to become SNR Denton.
While acknowledging that the serial combinations are not cost free, McNamara says the deals have been successful for the firm’s U.S. arm, Dentons’ largest component in terms of gross revenue and head count. And despite renaming itself twice in four years, McNamara says the firm’s brand is catching on with clients. As proof, he cites an in-house survey conducted by global research firm Acritas that The American Lawyer reported on last year.
Both McNamara and Portnoy are former Arent Fox partners who joined Sonnenschein in 2002 to seek a broader platform for their public policy practice. Portnoy assumed leadership of Sonnenschein in 2006, ushering in an era of aggressive lateral hiring aimed at helping the firm grow. By the end of the decade, Sonnenschein’s expansion strategy became merger-focused, with McNamara serving as U.S. partner-in-charge of integration efforts with Denton Wilde Sapte. (McNamara was promoted to U.S. managing partner in December 2011.)
McNamara says the myriad mergers have helped Dentons get the call on cross-border corporate assignments that might not have gone to the firm in the past. Dentons handled a $1 billion bond issue for the Republic of Ghana last year, while also advising Austrian property giant Immofinanz on the roughly $545 million sale of a real estate project in the Polish city of Katowice to German insurance giant Allianz. (McNamara calls the firm’s operations in Poland—a legacy of Salans—the best in one of Europe’s most dynamic economies.)
Dentons also fielded a 75-lawyer global M&A team last year to advise Illinois-based electronic connector maker Molex on its $7.2 billion sale to privately owned conglomerate Koch Industries and took the lead for Russia’s National Container Company on its nearly $1.6 billion sale to domestic rival Global Ports. Dentons also counseled Edmonton-based Capital Power last year on the $541 million sale of its New England power assets to Halifax-based Emera and Italy’s Luxottica Group this month on its purchase of Glasses.com from WellPoint for an undisclosed sum.
McNamara praises Dentons’ restructuring group for grabbing a key role in Detroit’s record-setting bankruptcy case through its representation of an official committee of Motor City retirees. A team of six Husch Blackwell white-collar litigation partners in Kansas City, Mo., recruited by Dentons last year also played a key role in beating the SEC in a long-running enforcement action, McNamara adds.
Among the firm’s other notable hires last year were Dickstein Shapiro energy and infrastructure partner Andrew Schifrin in New York, former Baker & McKenzie global immigration and mobility practice head C. Matthew Schulz in Palo Alto, and senior transactional partner Jim Rossiter in Toronto, who has worked with Baker & McKenzie and leading Canadian firm Cassels Brock & Blackwell.
Dentons also extended its geographic reach in 2013 without relying on often-expensive lateral hires. The Am Law Daily reported last year on Dentons becoming the latest in the parade of Am Law 100 firms entering the increasingly crowded Houston market by relocating current lawyers and staffers to the energy boom town, a strategy the firm also used to open a second office last September in Kazakhstan’s sparkling new capital of Astana.
Dentons did suffer some setbacks in 2013. Shortly before finalizing its merger with FMC, Dentons saw an 11-lawyer group decamp for rival Canadian firm Bennett Jones in Toronto. Dentons also closed a small office in Kuwait last summer.
The firm also made waves in September by announcing it had reached a tentative agreement to merge its U.S. arm with McKenna Long & Aldridge in a deal that would have pushed Dentons’ head count to more than 3,100 lawyers around the world. But after nearly two months of talks and several unsuccessful partnership votes, both sides called off the potential combination shortly before Thanksgiving, according to our previous reports.
During those talks, which broke down amid concerns on the part of some McKenna Long partners over how they would be folded into Dentons’ Swiss verein, the latter saw the head of its tax practice, David Hryck, take two other partners and defect to Reed Smith in New York. Groups of ex-partners from Thacher Proffitt & Wood, a now-defunct New York firm that Sonnenschein raided for 100 lawyers at the time of its December 2008 demise, also left Dentons for Pillsbury Winthrop Shaw Pittman and Alston & Bird.
McNamara says that while Dentons was disappointed in the outcome of its discussions with McKenna Long, his firm remains committed to expanding its domestic presence in the southeast, California, Denver and Texas, either through a merger or some other move. Latin America also remains a priority, he adds.
“We’re not even at our one-year anniversary [of the Salans and FMC mergers] and we’re well on our way to creating a global firm where colleagues work seamlessly together,” McNamara says. “It’s a challenging time for the legal industry in many ways, but our clients can depend on us to help them in regions around the world.”
This report is part of The Am Law Daily’s early coverage of 2013 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 2014 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.