Davis Polk & Wardwell saw healthy growth in revenue and partner profits in 2016, despite capital markets headwinds and uncertainty in European and Asian markets. Revenue rose about 10.3 percent, reaching $1.18 billion, while profits per partner at the 907-lawyer firm grew about 12.5 percent to $3.75 million, according to preliminary reporting by The American Lawyer. These gains come after a relatively flat year in 2015.
“It was our best year ever,” said managing partner Thomas Reid. He said the firm saw “above normal strength in restructuring, leveraged finance and M&A.”
The firm finished fourth on Bloomberg LP’s 2016 M&A legal advisory rankings, which measure global announced deals by volume, and 11th on Bloomberg’s ranking of principal advisers on global announced deals.
Reid cited Davis Polk’s work advising the French company Technip when it was acquired by the Houston-based FMC Technologies to create a $13 billion English oil field services company as an example of the firm’s strength in cross-border deals last year.
The firm also had roles on two of the top 10 largest bankruptcies of 2016, according to a list compiled by Jones Day. Arch Coal Inc. turned to Davis Polk when it filed for Chapter 11 protection early in 2016, and the firm has also been advising senior leaders in the bankruptcy of Peabody Energy Corp.
Davis Polk also won a lead role in Bonanza Creek Energy Inc.’s bankruptcy proceeding, which was filed last month. Documents filed in that proceeding showed that the firm earned $6.8 million in 2016 from Bonanza Creek Energy Inc. in restructuring, financing, capital markets, M&A and corporate governance work.
Lawsuits over Facebook Inc.’s initial public offering continued in 2016, Reid said, keeping some of the firm’s litigators busy. In May, partner James Rouhandeh was named Am Law Litigator of the Week for his role representing Proskauer Rose when it was accused of aiding R. Allen Stanford’s $7 billion Ponzi scheme. Davis Polk also advised Cisco Systems Inc and AstraZeneca on Foreign Corrupt Practices Act investigations by the U.S. Securities and Exchange Commission and the U.S. Department of Justice.
Reid said demand was “pretty stable” at the firm in a year when it rose just 0.1 percent industrywide, according to a report released Monday by Citi Private Bank. Demand increased in restructuring but declined in the firm’s capital markets practice.
“Capital markets is a large part of our firm,” Reid said. “In the beginning of 2016, the signs ahead were challenging. Nonetheless, the strength of those practices we had meant that they did well, regardless of how strong the markets were.”
Partner numbers once again remained flat at 154. Reid said that while several partners retired, the firm made 11 new partners last year and one lateral hire in Ronald Cami, who joined after leaving his role as general counsel of the private equity firm TPG. Cami had previously been a partner at Cravath, Swaine & Moore.
This year is off to a good start for the firm, which is advising the consumer products company Reckitt Benckiser Group on its $17.9 billion acquisition of Mead Johnson Nutrition Co. and Baker Hughes Inc. on its $32 billion combination with General Electric’s oil and gas business.
Reid said the firm will only hire opportunistically in 2017, keeping lateral activity rare. Howard Shelanski joined this year after most recently serving in the White House Office of Information and Regulatory Affairs.
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