Weil, Gotshal & Manges saw a record year in 2017, with revenue reaching new heights and double-digit growth in profits per partner.
Gross revenue rose 9.8 percent to $1.39 billion, while profits per equity partner rose 17.8 percent to $3.64 million. Even as the firm’s attorney head count and equity partner ranks swelled, revenue per lawyer grew 6.3 percent to $1.24 million.
“These clearly are records” for Weil, said executive partner Barry Wolf. “We continue to gain market share and continue to, as a result, drive the top line higher.”
Combined with its 2016 results, Weil’s profits per partner have increased about 44 percent in the last two years, Wolf noted.
The past two years stand in contrast to a period of sluggish revenue growth for Weil from 2010 to 2015. In 2013, the firm announced a series of cost-cutting measures, including layoffs and pay cuts for some partners.
But more than four years later, Wolf credits a long-term vision for the firm’s sharp comeback. He said its 2017 growth can be attributed to the successful implementation of a 2011 strategy that entailed gaining strength and market share in core practices—including bankruptcy, corporate and litigation—in the United States and overseas.
“Our strategy is to keep that balance going, It’s not to have one practice dominate the other,” Wolf said, adding, “I don’t see major investments in new offices or practice areas.”
Weil saw demand increase in 2017 across all three of its core practices, Wolf said, as well as increased demand outside the United States. Billing rate increases were a factor in the revenue rise, Wolf acknowledged, as they have been for many New York firms. (Weil in particular made headlines last year when an Iowa bankruptcy judge blasted its fees.) But the firm’s revenue growth was principally driven by hikes in demand, Wolf said, noting the number of hours billed by attorneys rose 3 percent.
The firm’s expenses last year also rose, but revenue grew faster, helping the firm achieve a 21 percent increase in net income.
Wolf said any savings from the firm closing its Dubai office were minimal, as that office had three lawyers, while the firm’s shuttering of its Budapest office was effective in 2018. When asked if the firm will see any more office closings, Wolf answered cautiously: “We constantly look at whether offices make sense or not.”
“Clearly with respect to Dubai and Budapest,” he said, “it didn’t make any strategic sense.”
In London, the firm generated about $165.4 million in revenue last year—a nearly 33 percent increase. A slowdown related to Brexit uncertainty “cleared itself up in 2017,” but the main driver for the revenue growth was “obtaining more and market share,” he said.
Meanwhile, the firm increased total head count about 3 percent, to 1,118 lawyers, and added five more equity partners to its ranks. Associate head count rose to nearly 778, but still stands far below the roughly 850 associates the firm employed in 2012, before its staff reduction.
Wolf said the firm doesn’t aspire to any specific head count but follows demand. “We will grow as far as the demand is there,” he said.
Weil’s work on some of the largest deals and bankruptcies last year helped drive its numbers to their record levels. The firm said it advised on more than 80 transactions valued at more than $1 billion apiece, including advising a transaction committee of Reynolds American Inc. in its $49 billion merger with British American Tobacco and advising Scripps Networks in a $14.6 billion merger with Discovery Communications.
Other deals include Weil advising Goldman Sachs and Bank of America Merrill Lynch in providing $13.7 billion committed bridge financing to Amazon.com Inc. for its acquisition of Whole Foods Market Inc. The firm advised Barclays, Goldman Sachs and Bank of America Merrill Lynch in providing $49 billion of financing commitments to CVS Health to finance its acquisition of Aetna Inc.
Weil’s well-known restructuring practice was involved in some of the largest bankruptcy cases in the last year, including Takata Corp, Westinghouse Electric Co. in its $9.8 billion Chapter 11 case, and Tidewater in its $2 billion case. Meanwhile, Weil said its litigation practice has recently won victories for Morgan Stanley, Illumina Inc., Sanofi and Showtime Networks Inc..
Beyond the numbers, Wolf boasted about the firm’s philanthropy, noting Weil and its personnel gave $750,000 in response to a series of natural disasters and other events in 2017, including those in Puerto Rico, Mexico, Houston and Las Vegas.