February 15, 2010 8:00 PM
THE AM LAW 100: Profits Surge at Irell & Manella
Posted by Drew Combs
Profits per partner at Irell & Manella increased nearly 27 percent in 2009 to $2.49 million, according to financials announced by the firm. The dramatic surge in profitability at the Los Angeles-based firm came as overall revenue rose by about 10 percent to $253 million and the partnership contracted from 74 to 65.
For Irell's managing partner, Elliot Brown, the continuing demand for the firm's services was central to the strong financial performance last year. "We were very busy in virtually every practice area," Brown says. "Complex commercial litigation, intellectual property, wage and hour, white-collar and securities litigation were firing on all cylinders." Brown adds that the firm's transactional practice was slower last year due to decreased deal activity but it nonetheless completed $4 billion in transactions and was somewhat offset by an uptick on the firm's restructuring and bankruptcy practice.
Some of the firm's notable deals work last year included representing Lifetime Television Network in its acquisition of A&E Television Networks and for asset manager TCW Group in its acquisition of bond shop Metropolitan West Asset Management LLC.
On the litigation side, which makes up a larger portion of the firm's practice, Irell is representing TiVo Inc. in patent infringement lawsuits with AT&T Inc. and Microsoft Corp. The firm also is representing former Countrywide Financial chief executive Angelo Mozilo in cases stemming from his role at the helm of the troubled lender.
Overall high demand in addition to the firm’s traditionally low leverage and innovative approaches to billing were also key factors in the firm's strong returns for 2009, says Brown. In addition to PPP and gross revenue, revenue per lawyer moved up last year too, by 10 percent to $1.273 million.
"We have been proactive in finding ways to partner with clients to put together alternative fee arrangements where we share some the downside risk," Brown says, "but we are given a reward on the upside for delivering outstanding results." He adds, "Performance-based alternative billing is a strategy that delivers value to clients, and that has paid off for us."
The 200-attorney firm also benefited from avoiding the leverage model, which fueled growth at many Am Law firms preceding the economic downturn but eventually led to waves of layoffs when demand declined. Irell has not conducted any economic-driven layoffs of associates or staff, and in January, the firm announced associate bonuses ranging from $15,000 to $70,000.
The firm's partnership declined 12.5 percent in 2009 (Irell has a single partnership tier). Among the departures in 2009 was entertainment lawyer Richard Kendall. He left last May with two other Irell partners to launch a boutique. Just last month, Paul Frimmer, head of Irell's personal planning practice group, left to join Loeb & Loeb. Brown says while there were more partner departures in 2009 than in most years, the exits were not part of any strategy and did not speak to some larger trend. As an example of the disparate reasons partners left the firm last year, Brown offers that one partner left to become a movie producer.
This report is part of The Am Law Daily's ongoing Web coverage of The Am Law 100’s 2009 financials. Results are preliminary. Final rankings and full results for The Am Law 100 will be published in The American Lawyer's May 2010 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.
The final published results of last year's Am Law 100 rankings are available here.Make a comment