Schulte Roth & Zabel saw little growth in revenue and profits in 2015, but executive committee chairman Alan Waldenberg said that the firm has boosted its appeal on the lateral market.
“Lawyers are coming to realize we have a stable, profitable platform, and that this is an attractive place for them to come to grow their practices,” Waldenberg said.
Revenue at the firm rose to $405.5 million in 2015, an increase of 1.2 percent. Profits per partner were up less than 1 percent, to $2.33 million, on net income of $198 million. Average revenue per lawyer stood unchanged at $1.14 million.
Waldenberg said he was “very satisfied” with the firm’s performance in 2015. He said Schulte Roth’s M&A and funds practices were strong, and that its real estate group was also busy. Litigation was solid but “maybe a little slower” than in past years, he said.
He said the biggest change was the firm’s growing ability to lure new lateral partners, especially in financial and investment services. Factoring in departures, the firm added four lawyers in 2015, bringing its total lawyer head count to 355. The number of equity partners rose by one partner, to 85. The firm had no nonequity partners.
Most recently on the lateral front, a 10-lawyer group of broker-dealer attorneys joined Schulte Roth from Bracewell earlier this month. The team included Julian Rainero and Craig Warkol, who are now co-chairs of the firm’s broker-dealer regulator. Also this month, partner Michael Gilligan joined the firm’s M&A group from Hogan Lovells.
Last year, Schulte Roth expanded its structured finance practice with the addition of attorneys Boris Ziser and Thomas Weinberger from Stroock & Stroock & Lavan. Ziser became co-head of the structured products and derivatives group with partner Paul Watterson Jr. Charles Clark, a former enforcement official at the Securities and Exchange Commission, joined the firm’s Washington, D.C., office in May from Kirkland & Ellis, where he advised hedge funds, private equity and venture capital on government investigations and accounting and disclosure fraud, among other matters.
The new hires continued this year. Before this month’s additions from Bracewell and Hogan Lovells, the firm also welcomed new partners from Morrison & Foerster, Simpson Thacher & Bartlett and Sutherland Asbill & Brennan.
Schulte Roth also had at least one notable departure last year, however. David Rosewater, a well-regarded adviser of activist investors in proxy fights, joined Morgan Stanley as head of its shareholder activism and defense group. Waldenberg praised Rosewater but said the impact would be minimal. “We have sustained the practice with David having gone over to the dark side,” he said.
Among the firm’s 2015 practice highlights, it advised Albertson’s supermarkets and an investor group led by Cerberus Capital Management in Albertson’s $9.2 billion merger with supermarket chain Safeway Inc. Schulte Roth represented Oxford Properties Group in closing $5 billion in financing for an office tower and 650,000 square feet of retail at Hudson Yards on New York City’s West Side.
In activist shareholder matters, the firm advised JANA Partners in a successful shareholder campaign that led to PetSmart Inc.’s $8.7 billion sale to a private equity buyer.
On the litigation side, the firm secured a jury trial win for a Washington, D.C., surgeon who had been accused of 60 federal counts of health care fraud, obstruction of justice and aggravated identity theft. Prosecutors had alleged that the surgeon intentionally misdiagnosed patients with skin cancer and performed unnecessary surgeries.