Carter Phillips of Sidley Austin. (Photo: Diego M. Radzinschi/ALM)
Sidley Austin posted healthy if not spectacular gains in 2016, with gross revenue climbing 3.4 percent to $1.928 billion. Profits per equity partner rose to $2.13 million, an increase of 3.1 percent, while revenue per lawyer held steady at $1.05 million.
The firm’s head count increased by 3.2 percent to 1,836 lawyers. Its equity partnership grew to 346, an increase of just 1.1 percent after 12 percent growth in 2015.
In 2015, Sidley management committee chairman Larry Barden attributed the firm’s success to investments in new offices and practice areas over the past several years. Those investments continued to fuel the firm’s growth in 2016, and in some cases paid off more significantly this year. For example, a soft energy market made 2015 a challenging year for Sidley’s five-year-old Houston office, but that practice area came “roaring back” in 2016, Barden said.
Sidley executive committee chairman Carter Phillips said demand for litigation rose about 5 percent in 2016, while demand for transactional work was up 3 or 4 percent. And one longstanding investment paid what Phillips called “a rather substantial dividend”: Sidley’s relationship with AT&T Inc. The firm represented the telecom giant in its $48.5 billion acquisition of satellite television provider DirecTV in 2015, and it recently helped AT&T achieve a False Claims Act victory at the U.S. Court of Appeals for the Ninth Circuit.
Private equity was another bright spot for the firm last year. It poached a team of six private equity and corporate partners from Kirkland & Ellis’ London office in March, one of whom, Erik Dahl, is now leading Sidley’s new Munich office.
Because Sidley expected the market to slow in 2016, it trimmed its spending this year, Barden said. The firm cut back on sponsorships and took a hard look at discretionary expenditures and travel. It renewed its existing lease in Chicago, the firm’s largest office, after rumors of a potential move to newer digs.
“We tried to find ways where we were spending money and had just gotten in the habit of spending it rather than trying to find out if there was a strategic reason for those expenditures,” Barden said.
That belt-tightening turned out to be less essential than the firm expected, its leaders said.
“The year for us was like it was for a lot of firms, which is that it had a stronger back half than first half,” Phillips said. “Obviously you’d always hope that some of the practices, like bankruptcy, might grow a little more aggressively than they have been. … But there are a few practice areas that might have looked flatter in year-to-year comparisons because they had a great year in 2015.”
In 2017, Barden said, the firm plans to continue executing on its current strategies and expanding in Europe and Asia. Carter added that given recent upheavals in U.S. trade policy, he expects the firm’s trade groups to be unusually active in the coming year.