In what firm chair Andrew Levander called an “excellent” year, Philadelphia-based Dechert achieved record profits per equity partner and revenue per lawyer last year, with RPL surpassing $1 million.
Gross revenue reached $977.9 million, an increase of 7.3 percent over 2016. Revenue per lawyer was $1.054 million, up 5.9 percent, and PPP grew 5.3 percent, to $2.7 million.
The firm beat its budget expectations “across the board,” Levander said.
“Corporate, financial services and international arbitration had the biggest growth,” Levander said. He cited strong performance by the litigation practice in the Europe, Middle East and Africa region and said the corporate practice was particularly active in Asia. International arbitration was active in Latin America and elsewhere, he added.
Among other significant matters, the firm is advising CVS in its combination with Aetna; advised SK hynix Inc. in its $18 billion acquisition of Toshiba Corp.’s flash memory and solid-state drive business; worked with Airbus on its internal fraud investigation; won a ruling from the U.S. Supreme Court that laches is not a defense to patent infringement suits; and advised Egypt on a $4 billion multi-tranche sovereign bond issuance.
While he said litigation was strong, Levander acknowledged that Dechert also coped with two major matters winding down: the firm’s work on behalf of Takata related to allegedly defective airbags, and its work for Elliott Management in a protracted fight with Argentina over payment for defaulted bonds.
The firm’s “interesting busy-ness” has helped its recruitment efforts, Levander said.
Firmwide, head count grew by 1.3 percent in 2017, to 928 lawyers. That included 2.5 percent growth in the equity partner tier, with 161 equity partners last year. The nonequity partnership shrank by 2.2 percent, to 132.
It was a good year for partner recruitment, Levander said, pointing to seven lateral hires in Asia, five in London and seven in New York.
Those hires included Nazim Zilkha and Bruce Bloomingdale in New York, who came from White & Case and Cadwalader, Wickersham & Taft, respectively, but previously worked together at Mayer Brown. The New York hires also included Linklaters’ U.S banking head, Jeff Norton, and private equity counsel Gareth Clark from Paul, Weiss, Rifkind, Wharton & Garrison. Hires in London included Monica Gogna, who joined from Ropes & Gray.
“We expect to see even more this year, and I think that steady growth, that level of excitement and interesting matters helps attract laterals,” he said. Also helpful, he said, was the firm’s ascension in rankings for midlevel associate satisfaction, where it moved up 50 places in 2017.
Dechert’s profit margin stayed steady at 44 percent, with net income of $432.5 million in 2017, showing growth of 8 percent.
Levander said the firm has always been conservatively run, and it did not take any new cost-cutting measures last year. But the firm has found opportunities over the years to make staffing cuts due to improved technology.
While Levander would not give specific numbers, he said Dechert prepaid costs more in 2017 than it did the year before.
Regarding contract lawyers, he said, clients are often dictating those relationships and when to staff up. Clients have also shown a greater interest in alternative fee arrangements, he said, though their enthusiasm has not “spiked.”
“We’re in the business of serving our clients and working with them, and exploring alternative billing and whatever makes sense,” Levander said. “We have a group and we’ve had it for a long time of nonlawyers in the accounting, finance world who help us find programs … consistent with our clients desires.”
For 2018, Levander said the firm is looking to hire laterals in various practice groups. “We may have a lot to say over the next six months,” he said, particularly in London, New York, Chicago and on the West Coast.
The firm is also looking to increase its diversity, he said.
“For the first time, we have three women on our policy committee and two other diverse people on that committee, and it’s something we are working hard at,” Levander said.
As for mergers or other combinations, Levander said he gets occasional calls. There hasn’t been cause to move forward on those possibilities, he said, but “I always listen and I always learn.”
Correction: An earlier version of this story misreported that Dechert had not previously topped $1 million in revenue per lawyer. In fact the firm posted RPL of $1.007 million in 2015. The story also includes updated percentage change calculations for some metrics.