The Score

February 16, 2012 6:21 PM

The Am Law 100, the Early Numbers: After Two Down Years, Debevoise Sees Revenue Rise

Posted by Nate Raymond

Debevoise & Plimpton reversed a two-year trend by posting a modest 2.8 increase in gross revenue in 2011, according to The American Lawyer's reporting.

While grossing $675.5 million last year, the firm also increased its spending on such items as a technology upgrade and a new associate training program. As a result, the firm's average profits per partner were essentially flat at $2.08 million.

"I regard 2011 as a fairly solid year in a competitive market," says Michael Blair, the firm's presiding partner.

Debevoise's revenue per lawyer surged 7.2 percent to $1.05 million—a jump largely explained by a 3.9 percent drop in head count that saw the firm lose 26 lawyers.

Debevoise, whose attorney ranks also shrank last year, did not conduct layoffs in 2011, Blair says. Instead, the firm's head count fell as associates who had been looking for new jobs found them as the economy improved. The firm is comfortable with its current size and expects to essentially maintain it this year, Blair says: "Our head count right now is exactly where we want it."

Blair, who succeeded Martin Frederic Evans as presiding partner in June, says Debevoise also has no plans to open any new offices in 2012. And while some key hires did come aboard in 2011—including bankruptcy partner M. Natasha Labovitz from Kirkland & Ellis and financial institutions partner Ethan James from Davis Polk & Wardwell—Blair says he does not have plans for major lateral growth this year either.

The expense picture at Debevoise is not unlike what other firms encountered last year. A report by the Hildebrandt Institute and Citi Private Bank released Wednesday noted that while many firms slashed expenses in 2009 and 2010, "we have seen expenses creeping up again since mid-2010."

As was true of other firms, Debevoise's increased spending was partly tied to a decision to stop deferring investments in its technology, Blair says.  "What's really going on is while in theory technology gets cheaper, in reality manufacturers are coming out with more functionality, which costs more," he says.

Debevoise also announced in August that it would send 23 of its 58 incoming associates to a monthlong business program developed by a firm called Fullbridge. Starting that program came with a "material cost," Blair says. Other firms to launch similar business-training programs for incoming associates include Skadden, Arps, Slate, Meagher & Flom and Milbank, Tweed, Hadley & McCloy.

Blair says while no single matter contributed a substantial sum of the firm's revenue, Debevoise partners did keep busy in 2011. On the corporate side, the firm advised Russia's Uralkali on its $8.1 billion merger with Silvinit, and served as outside counsel to Mitsui on its $6.75 billion bridge loan to an affiliate of Corporación Nacional del Cobre de Chile.

In the firm's litigation department, partners Andrew Ceresney and Mary Jo White advised JP Morgan Chase in connection with the $25 billion mortgage settlement between five banks, the U.S. Department of Justice and state attorneys general announced last week. News Corporation's independent directors, meanwhile, retained White and her fellow Debevoise litigation partner, former U.S. attorney general Michael Mukasey, for an internal investigation prompted by the News of the World phone-hacking and bribery scandal.

Debevoise is also representing Suzuki Motor Corporation in launching an international arbitration against Volkswagen AG in November in an effort to buy back shares.

This report is part of The Am Law Daily's early coverage of 2011 financial results of The Am Law 100/200. 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. An interactive chart of the financial results reported so far is available here. The chart will updated as additional data is reported.

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