The Score

February 2, 2012 6:52 PM

The Am Law 100, the Early Numbers: SNR Denton Joins Comeback List as Revenue, Profits Grow

Posted by Chris Johnson

In what is fast becoming a year of turnarounds among The Am Law 100, SNR Denton's U.S. arm became the latest to announce a return to topline growth in 2011, according to The American Lawyer's reporting.

Like Mayer Brown and McDemott, Will & Emery—both of whose 2011 financial results The Am Law Daily has previously reported (here and here, respectively)—SNR Denton's U.S. arm ended two straight years of fiscal decline by collecting $474.5 million in gross revenue last year, a 4.4 percent increase over 2010.

The firm's U.S. profits per equity partner grew almost 7 percent to $880,000 after a 15 percent rise in 2010, while net income grew 6 percent to a five-year high of $123 million. SNR Denton's U.S. profit margin matched last year’s at 26 percent.

(As with DLA Piper, Baker & McKenzie and recent transatlantic-merger firms such as Hogan Lovells, SNR Denton is structured as a Swiss verein—essentially a holding structure that lets participating entities maintain their existing forms. The firm's U.K. arm will not close out its fiscal year until April 30. Full results will be published in the May issue of The American Lawyer.)

SNR Denton global CEO Elliott Portnoy says last year's improved performance was a vindication of the merger, which took effect in September 2010.

"It was a really outstanding year, notwithstanding the market turbulence and the challenges our clients have experienced," he says. "That is a direct result of the combination."

Specifically, Portnoy says, SNR Denton benefited from "tens of millions of dollars" in work referred across the verein. He points to a stream of what he refers to as "but for" matters—those that either firm would not have won but for the tie-up—including representing U.S. media company A&E Television Networks in an English trademark infringement dispute and winning a place on the panel of U.K. investment bank Barclays Capital. The firm's Doha, Dallas, and Washington, D.C., offices, meanwhile, recently combined to advise the Qatar 2022 FIFA World Cup bid committee.

"It’s work that would and could not have come to either of the legacy firms in their previous incarnations,” he says.

Peter Wolfson, who was appointed as SNR Denton's U.S. CEO in December, says the combination has also helped the firm attract new talent. Last summer, it brought in a Washington, D.C.–based three-partner corporate energy team from Baker & McKenzie, the vast majority of whose work focuses on China and Central Asia, including Kazakhstan.

"That team would never have joined the old Sonnenschein as we wouldn’t have been able to handle the work," Wolfson adds.

SNR Denton made more than 46 partner hires firmwide in 2011, according to The American Lawyer's latest Lateral Report. In addition to the former Baker partners, the new arrivals include former Freddie Mac general counsel Robert Bostrom, who joined as cohead of the firm's global financial institutions and funds group last July.

Wolfson says the U.S. arm enjoyed its greatest uptick within the IP practice, with revenue attributable to that group jumping 24 percent. Other growth areas included real estate (up almost 20 percent), public policy, which includes energy specialists (15 percent more revenue), capital markets (a 10 percent jump) and litigation (a 6 percent increase). Lawyers focusing on restructuring and traditional corporate work, including M&A, were less busy, he adds.

The firm also benefited from "significant" cost savings as a result of the combination, Portnoy says. For one thing, he notes, as a merged entity, SNR Denton has "greater buying power" to renegotiate supply and technology contracts. Wolfson admits that travel costs increased, as partners traveled throughout the network to pitch their services to clients. He insists, though, that the merger has been "cost reducing" overall.

Asked for a 2012 forecast, Portnoy refuses to discuss specifics, but says he is “cautiously optimistic” that the firm will exceed last year's performance.

"We don't do aspirational budgeting—we always try to be very realistic—but we're confident that 2012 will be a very strong year," he says. "We're not predicting a dramatic increase in overall demand for legal services, so the only way to grow is by increasing our market share and attracting new lawyers. That's what we’re aiming to do."

This report is part of The Am Law Daily's ongoing Web coverage of 2011 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 2012 issue and on The Am Law Second Hundred will be published in the June issue.

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