Kramer Levin Naftalis & Frankel posted a second consecutive year of record financial results in 2017, earning a gross revenue of $387 million as its profits per equity partner exceeded $2 million for the first time, according to preliminary ALM reporting.
The firm’s gross revenue of $387 million marks a 9.9 percent increase over the $352 million posted in 2016. The firm’s net income also grew 9.9 percent, rising to $152.76 million in 2017 from $138.95 million in 2016.
Revenue per lawyer and profits per equity partner also grew in 2017 at the 326-lawyer firm. Kramer Levin had an RPL value of $1.187 million, up 7.9 percent over the $1.1 million the firm posted in its 2016 results. And, after nearing $2 million in partner profits in 2016, Kramer Levin passed that milestone in 2017, with a PPP figure of $2.152 million.
Kramer Levin managing partner Paul Pearlman said he was pleased with the firm’s results, noting that the 2017 financials were record highs and came after the firm had previously reached records in 2016.
“It was a very strong year for our firm,” said Pearlman. “It was gratifying to us to put together such strong back-to-back years.”
He added that the firm’s positive results in 2017 stemmed from contributions on both sides of the Atlantic. Kramer Levin has offices in New York and Silicon Valley in the U.S., as well as an outpost in Paris.
“It was a record year for all our financial metrics and was a combination of what happened in New York and Paris,” Pearlman said.
The firm’s headcount remained relatively stable, rising from 320 lawyers in 2016 to 326 in 2017. Kramer Levin hired four lateral partners in 2017—three in New York and one in Paris—and its partnership ranks comprised 71 equity partners and 36 non-equity partners. Overall, the firm’s partner count experienced year-over-year growth of 2.9 percent.
Pearlman said lawyers in each of the firm’s key practices were firing on all cylinders, including its corporate, restructuring, litigation and real estate and land use groups.
Among other work, the firm represented VICI Properties, a real estate investment trust (REIT) that grew out of the Caesars Entertainment Corp. bankruptcy in a series of transactions toward the end of 2017 and into 2018. That work included advising on VICI’s formation in October and in November a $1.14 billion deal in which the REIT acquired land and real property improvements associated with the Harrah’s Hotel and Casino in Las Vegas and leased it back to Caesars Entertainment. In February, VICI completed a $1.4 billion initial public offering, and while the deal closed this year, a chunk of the work took place in 2017.
On the litigation front, Kramer Levin’s white-collar team, led by partner Barry Berke, represented New York City Mayor Bill de Blasio in connection with investigations into the politician’s fundraising efforts. That work, which resulted in a dropped investigation with no allegations of wrongdoing against de Blasio, reportedly racked up fees of at least $2 million.
The firm’s restructuring group also remained active in 2017, picking up roles for creditors committees in the bankruptcies of retailer Toys “R” Us Inc. and oil and gas drilling contractor Seadrill Ltd. Describing the body of work in 2017 and the firm’s back-to-back record financial years, Pearlman said they can be attributed to the breadth of practices at Kramer Levin and a relatively even contribution from those groups to the firm’s business.
“For a firm of our size, we have tremendous balance,” Pearlman said. “Whether the economy is good or bad, we seem to perform pretty well.”
Looking ahead, Pearlman is not expecting any major disruptions in the firm’s business. As evidence of a continued string of success, he said so far Kramer Levin was keeping active in 2018.
“We tend to be a firm that’s steady as it goes,” he said. “The first two months of this year have been extremely busy. In fact, our billable hours per day, in three of the last four months, were among the highest that we’ve ever had.”