(Photographer: Sergey A.Khakimulli)
Herbert Smith Freehills saw its revenue rise by 5 percent in the first full fiscal year since its 2012 merger between British firm Herbert Smith and Australian firm Freehills.
The combined firm reported revenue of 800 million pounds ($1.37 billion) for the 12-month period ended April 30. Herbert Smith’s profits grew to 232 million pounds ($398 million), an increase of 11 percent from the previous fiscal year, which the firm calculated on a pro forma basis using financial data for the seven-month period between its Oct. 1, 2012, merger and the end of its previous fiscal year.
Revenue per lawyer was up nearly 3 percent, to 382,000 pounds ($665,390), while profits per equity partner climbed 12 percent, to 741,000 pounds ($1.27 million).
In an interview with The Am Law Daily on Tuesday, Herbert Smith co-CEO Sonya Leydecker pointed to success in the firm’s global dispute practice, rise in transactional work and continued integration between its two legacy firms as major contributors to its surge in revenue.
“There is a lot of momentum, and we are well on our way to achieve what we set out to do,” Leydecker says. “This is a good set of results, and we’re very pleased.”
The latest fiscal year was not completely smooth, however, as Leydecker noted challenging economic conditions in the first six months that affected Herbert Smith’s transaction practice. But she added that the firm saw an overall higher level of performance in the practice after market conditions recovered.
Co-CEO Mark Rigotti pointed to initial public offering and capital markets practices as areas that saw a comeback this year, mirroring a similar trend that benefited Magic Circle firm Clifford Chance, which released its financial results on Tuesday.
Herbert Smith’s most notable work over the last year includes advising energy companies, with the firm’s Russian energy practice alone handling $75 billion in projects between May 2013 and April 2014. The firm also counseled PetroChina Co. Ltd. on the purchase of a 25 percent stake in an Iraqi oil field from Exxon Mobil Corp.
Last August, Herbert Smith represented PetroChina’s parent company, CNPC, in a $4.2 billion acquisition of a stake in Eni East Africa SpA.
Herbert Smith’s own merger played a role in spurring business, according to Rigotti and Leydecker. The interconnectedness meant that multinational clients could seek counsel from attorneys in various countries, Leydecker said, while partners were more likely to work in other offices. Rigotti added that the firm exceeded its synergy revenue targets by 18 percent in its latest fiscal year.
While Herbert Smith has expanded its global reach in recent years, opening new offices in the U.S., Germany and South Korea, Leydecker said the firm is now focused on consolidating, growing and integrating its practices instead of moving into new jurisdictions. Leydecker added that there are no current plans to expand its offices in the U.S.
Herbert Smith’s New York office, which opened in late 2012, had been experiencing organic growth, Leydecker said. On Tuesday, for instance, it announced the hire of John O’Donnell, a former assistant U.S. attorney for the Southern District of New York and enforcement division branch chief at the U.S. Securities and Exchange Commission.
At Herbert Smith, O’Donnell will focus his practice on white-collar criminal defense, regulatory enforcement proceedings, internal investigations, securities litigation and complex commercial litigation.
The firm has made 12 other high-profile lateral partner hires in offices across New York, Europe, Hong Kong and Australia.
Head count at Herbert Smith stood at 2,091 attorneys in its latest fiscal year, an increase of 32 lawyers from the year before.