Baker Botts‘s gross revenue dropped 13.5 percent and its net income fell 24.3 percent in 2017—a year after the firm posted record results boosted by big contingency fees.
“Last year, we had a once-in-a-blue-moon result, said Andrew Baker, the firm’s managing partner. “This is strong, steady growth.”
In 2016, gross revenue improved by 20.2 percent compared with 2015, and net income jumped 44.5 percent compared with the prior year. Baker Botts said those results were due in part to a 2016 windfall from contingency fees. It did not reveal the source of the fees but multiple news outlets reported that it received a significant fee connected to a $755 million Vivendi SA settlement with Liberty Media.
Revenue per lawyer was also down in 2017, totaling $1,021,000—a drop of 14.6 percent compared with the $1,195,000 total in 2016. And profits per partner were $1,838,000—down 25.4 percent when compared with the $2,465,000 of the prior year.
Baker said the firm, traditionally known for its oil and gas practice, benefited in a big way in 2017 from the firm’s growing technology practice. He said 60 percent of the firm’s 25 largest clients in 2017 were in that sector. “We are really proud of that and that work that’s done throughout our system, but particularly on the West Coast,” he said.
The majority of the firm’s other top clients are in the oil and gas industry, he said.
“This is good news. We have more business in a new area. It’s not that we have less business in another area,” Baker said. “That’s significant for a firm that has historically been known as an energy firm. Now we are known as an energy/technology firm.”
Baker Botts grew incrementally in 2017, coming in at 717 lawyers on a full-time equivalent basis, compared with 708 the year before, and it added a net of three equity partners, increasing to 179. But Baker noted that the firm added 24 lateral partners in 2017. Those include a group of nine energy partners who joined the firm’s Houston office from Norton Rose Fulbright in February of last year.
However, Baker Botts lost some partners during 2017 as well, including three Houston trial partners who left in April to form a litigation boutique, and six energy partners who also left the firm in April to join Gibson, Dunn & Crutcher at its new Houston office.
Texas Lawyer also recently reported that a group of Baker Botts oil and gas lawyers, including firm oil and gas chair Hugh Tucker, is expected to move to Shearman & Sterling’s new Houston office later this year.
But Baker was optimistic about 2018, noting that it is off to a good start and recently hired four corporate partners from Vinson & Elkins in New York and Washington, D.C.—a move he said helps “super charge” the beginning of the year.
“The pipeline is full and our lawyers are busy,” he said.