February 22, 2011 1:33 PM
The Am Law 100: Debevoise Revenues Slip, Profits Climb
Posted by Nate Raymond
For the second straight year, Debevoise & Plimpton saw revenues slip in 2010, though last year's modest dip was an improvement over 2009's 12 percent drop. At the same time, Debevoise's profits per partner rebounded after a two-year slide, rising by 11 percent compared to 2009.
The New York-based firm grossed $657 million in 2010, a 1.6 percent decrease in revenues that presiding partner Martin Frederic Evans attributed to the economic downturn's lingering effects. Profits per partner, meanwhile, hit $2.06 million, a jump that Evans said reflected the firm's cost-cutting efforts.
"You got the full-year effect of the expense reductions," he says.
The firm reported having 674 lawyers last year--38 fewer than it had in 2009. The 5 percent decline was due in part to the creation of a fellowship program for incoming associates slated to start work last fall who were given the option of starting instead in 2011, Evans says.
The program was similar to initiatives launched a year earlier by other law firms grappling with their head counts in the face of the troubled economy. A Debevoise spokeswoman says that the firm, after experiencing "unprecedented acceptance rates" in summer 2009 and then for permanent positions for fall 2010, created the fellowshp to "even out arrivals" for its 2010 and 2011 classes.
Incoming associates at Debevoise had the option of working for a year at legal services organizations. The firm provided a stipend and medical benefits to the 18 law school graduates who participated. Those lawyers will begin work at the firm in fall 2011, the spokeswoman says.
Evans says that the firm also cut costs by entertaining "less lavishly" and by generally being more careful in its spending. The expense cuts helped push Debevoise's net income up by 9.5 percent to $294.7 million. Evans says that all law firms will need to take a "closer look at the expense side for a long time to come."
Evans says that he remains optimistic that--as the economy continues to improve--future increases in profits will be tied to increased revenues. And, he adds, the overall decrease in Debevoise's revenue during 2010 masks the firm's month-to-month improvements. A spokewoman said that the firm's activity levels across its eight offices increased by 20 percent from the first quarter to fourth quarter of 2010.
"If you look at the trend lines they're pretty uniformly positive," Evans says.
As far as notable work, Debevoise continued to advise AIG on deals intended to help it repay the federal government for its 2008 bailout, including advising in November on the $20.5 billion initial public offering for the company's Asian insurance unit, AIA.
Evans says that Debevoise also benefited from an increase in deal activity in the private equity sector, a traditional sweet spot of the firm. In September, partners Paul Bird and Jonathan Levitsky advised Clayton, Dubilier & Rice on its $4.2 billion purchase of a stake in Univar. Devevoise partner Matthew Kaplan, meanwhile, represented Booz Allen Hamilton, which was majority owned by firm client the Carlyle Group, on its initial public offering in November.
On the litigation front, Evans says that the firm was busy on intellectual property and arbitration matters. The firm’s litigation load was also driven by work stemming from the financial crisis, he says. Mary Jo White, a partner and the former Manhattan U.S. attorney, advised former Bank of America Corporation CEO Kenneth Lewis in the bank’s $150 million settlement with the Securities and Exchange Commission and in the New York attorney general’s suit against the bank.
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This report is part of The Am Law Daily's ongoing Web coverage of 2010 financial results of The Am Law 100/200. Results are preliminary. Final rankings and full results for The Am Law 100 will be published in The American Lawyer's May 2011 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.
Results for the 2010 fiscal year reflect a change in the survey methodology. Per-lawyer and per-partner results for 2010 are based on a full calendar year average FTE head count, while published results for previous years were, in most cases, based on an August 31 FTE head count. When possible, we have recalculated fiscal year 2009 numbers to reflect the change in head count and based percentages on those adjusted numbers.Make a comment