March 12, 2012 4:06 PM

The Am Law 100, the Early Numbers: Winston Hits New Heights in Revenue, Profits

Posted by Julie Triedman

Correction 3/13/12: An earlier version of this story incorrectly stated the size of the firm's municipal finance group. There are 15 public finance lawyers.

Amid a spate of lateral hires, Winston & Strawn saw its gross revenue rise slightly for the second straight year in 2011, while profits per equity partner edged up for the fourth year in a row, according to The American Lawyer's reporting. Though modest, the increases helped push Winston to its best financial performance ever.

"I'm proud of our partners," says Winston managing partner Thomas Fitzgerald. "We opened in Houston as one of the bigger nonindigenous firm in Houston, and we still managed to have increases in both gross revenue and profitability." That office—with a 16-lawyer Houston-based group from the defunct Howrey as its foundation—opened in March.

As for Winston's overall finances, the firm's gross revenue grew 5.2 percent to $754 million last year, while average profits per equity partner jumped 4 percent to $1.44 million.

The solid fiscal performance was a product of the firm's litigators and corporate lawyers keeping busy into December and early January, when work began to dry up, Fitzgerald says: "We were able to keep total hours up."

The good financial news—which was announced to partners on February 4, five days after the end of the firm's fiscal year—followed what turned out to be a robust 2011 on the lateral hiring front. All told, Winston brought in 40 partners, 19 of them from Howrey.

The firm lost laterals as well last year. According to data compiled by The American Lawyer, at least 23 partners had departed the firm as of late October. All told, Winston's equity and nonequity partnership tiers both shrank last year, by 2.2 and 1.5 percent, respectively. Fitzgerald says he does not expect to take on as many laterals this year.

In part because of the expense required to integrate lateral hires into the firm, Winston's revenue per lawyer declined 1.2 percent to $815,000 last year. "We had to start up an office, and it takes a few months to get a dollar in the door," Fitzgerald notes. But overall lawyer head count rose by nearly 7 percent, to 928 from 868, increasing leverage and contributing to overall profitability. The head count surge was due partly to the firm's decision to defer until early 2011 start dates for some members of the 2010 associates' class.

Last year's firm highlights included handling Groupon's November IPO, the year's second-largest public offering, and IP litigation chair James Hurst continuing an eight-trial winning streak by securing three courtroom wins for client Abbott Laboratories, including a March 31 jury verdict that staved off a potential multibillion antitrust class action claim. (Hurst's hot streak helped earn him recognition as an American Lawyer Litigator of the Year finalist.) Also, D.C. partner Thomas Buchanan closed out a 15-year effort on Meritor Savings v. U.S., a $276 million win for the Meritor shareholders represented by Winston.

In addition, Fitzgerald says, Winston's 15-lawyer municipal finance group "had a breakout year," advising on transactions worth almost $10 billion and handling more work—and more complicated work—in the sector than ever before despite a thin year for the municipal bond market.

Despite 2011's positive results, Fitzgerald says he has told Winston partners to expect a tougher year in 2012. Last year, for instance, Winston raised rates on average between 4 to 5 percent. This year, the firm is looking at 3–4 percent increases, which will make increased profitability more difficult. Cost-cutting is not expected to materially affect financials in 2012, Fitzgerald adds.

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 AmericanLawyer.com. 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 be updated as additional data is reported.

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