(Diego M. Radzinschi/ALM)

Wilmer Cutler Pickering Hale and Dorr pruned attorney head count but kept revenue stable last year, as high-profile clients from Washington, D.C., to California turned to the firm to keep regulators and courtroom adversaries at bay.

Wilmer’s gross revenue stayed about flat, at $1.1305 billion, down less than one percent from 2015. Revenue per lawyer increased slightly, from $1.255 million in 2015 to $1.275 million in 2016.

Partners in the all-equity firm earned average profits of $1.86 million last year, up about 3 percent from 2015. The firm’s profit margin and ratio of partners to associates were unchanged.

Robert Novick, who shares firmwide managing partner duties with Susan Murley, called it a “terrific” year and noted that the firm has increased profits per partner every year for a decade. That’s been key a measure of success, he said.

“With a world in which work has been flat to declining and work commoditizes over time, you’re naturally going to focus on the talent at the highest levels and make sure that that’s preserved,” he said.

Even with income growth, the firm had more expenses. Wilmer stomached a one-time boost in associate salary costs when it retired a merit-based compensation system and returned to a lockstep scale. Then, the firm matched the $180,000 associate salary scale midyear. Combined, those changes cost the firm an extra $20 million.

Yet “it doesn’t trouble me at all,” Novick said about the added expenses. “Whatever the market demands to get the best talent is where you have to be. Our revenue per lawyer and our profits per partner continue to increase because for us — and I think this is true for many firms — it’s about talent.”

HEAD COUNT CHANGES

The firm got smaller throughout 2016. Wilmer had 20 fewer full-time lawyers than in 2015, with 887. The equity partnership decreased by 10 to 270 lawyers. Wilmer has no nonequity partner tier.

Novick said some of the departed lawyers didn’t fit the firm’s high-margin model. “This is an industry where some people’s practices aren’t sustainable on a platform that’s changing, that’s becoming more profitable, that relies on certain high-value work. So you see people leave firms to go find a place that’s more appropriate for the kind of practice they have,” Novick said. “We had some of that.”

He mentioned the departures of lawyers in Germany, which included Wilmer’s former Frankfurt office managing partner and two other partners who joined Squire Patton Boggs’ intellectual property and litigation practices in December. Other reductions came from retirements, he said.

Novick also acknowledged one closely watched lateral who didn’t return to the firm after working in the partnership years before: Stuart Delery, the Obama-era Justice Department civil division head and acting associate attorney general. Delery joined Gibson, Dunn & Crutcher in September. Novick said that while Wilmer “Would’ve been delighted to have him back … we have a lot of folks here with that skill set. I think for Stuart it was a more unique opportunity to go to Gibson Dunn, and I’m delighted for him.”  

EAST AND WEST

The firm did bring in other major lateral partners, especially from the government. John Walsh, Colorado’s former U.S. Attorney, joined in Denver, while Alejandro Mayorkas, the deputy secretary of Homeland Security until October, joined in Washington. Both have professional ties to California — Mayorkas was the U.S. attorney for the Central District of California from 1998 to 2001 — and Novick said the firm hopes to build more “critical mass” there.

The firm already has significant clients from the West Coast, including Palo Alto-based Theranos Inc., the medical testing company that faces corporate sanctions and Justice Department and Securities and Exchange Committee investigations. Boies, Schiller & Flexner and Theranos separated in November, and Wilmer took over the lion’s share of the work.

Wilmer also represented long-time client Apple Inc., for whom partner William Lee serves as a lead trial counsel, in a major intellectual property dispute with Samsung and won a $120 million ruling at the U.S. Court of Appeals for the Federal Circuit.

The firm also noted its decadelong representation of software company Demandware, which reached “the culmination of a client relationship” with that company’s $2.8 billion sale to Salesforce.

While Wilmer didn’t highlight it in its annual letter to clients, the firm has also advised first daughter Ivanka Trump and her husband, Jared Kushner, on their fledgling White House careers. Regulatory department leader Jamie Gorelick has counseled both of Donald Trump’s family members on how not to breach federal ethics rules. The firm also counseled now-Secretary of State Rex Tillerson as he prepared to leave Exxon Mobil and sought Senate confirmation.

Though Wilmer boasts several top lawyers from Democratic administrations, Gorelick and Mayorkas included, Novick said the firm isn’t partisan.

“I think we actually have more balance in the firm than people perceive,” he said.

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