K&L Gates reveals flat financials with decreased US revenue

K&L Gates has posted its results for the 2012 financial year, exposing more information than any other US law firm in the reporting season so far as it announced stable revenue figures.

Firmwide revenue was essentially flat compared to 2011, falling from $1.062bn to $1.060bn. However, revenues by region told a more interesting story, with the firm posting positive financial results for Asia, Europe and the Middle East, but not for the Americas.

In Asia Pacific, for example, revenues grew 24.7 per cent despite headcount decreasing by 3.3 per cent across the region. Likewise, revenues in Europe and the Middle East grew by 17.2 per cent in 2012, with headcount up by an average 13.4 per cent across the region’s offices – an increase that could partly be credited to the firm’s office opening in Milan (2 February 2012).

In the Americas, however, revenues decreased by 2.5 per cent while headcount was down by an average of 7 per cent. Overall firmwide headcount dropped by 3.8 per cent.

Average profit per equity partner (PEP) across the firm rose from $890,368 to $899,960, a small improvement but still below PEP of $930,122 achieved in 2010.

“Lawyer productivity was generally consistent across practice disciplines year over year with the exception of intellectual property, where productivity increased by close to 10 per cent,” the firm said in a statement. “Demand improved in the last few months of the year, providing a positive outlook going into 2013, although worldwide economic uncertainty suggests reason for caution.”

The firm also stated that 467 of its 500 largest clients used lawyers from two or more of its offices last year, with the average number of offices working on projects involving the firm’s 20 largest clients standing at 15.3. For the firm’s 100 largest clients, which generated 34.4 per cent of 2012 revenues, the average number of offices engaged was 10.3. No client accounted for more than 5 per cent of firm revenues in 2012 or 2011.

Aside from opening in Milan last year, the firm got the green light to open an office in Seoul (15 November 2012) and joined the rush Down Under by confirming a merger with Australian firm Middletons (4 December 2012).

More recently, the firm poached Fulbright & Jaworski securities head Charles Strauss to launch a base in Houston (12 February 2013). The firm already has offices in the Texan cities of Austin, Dallas and Fort Worth.

The results came amid a detailed performance report for the year ending in December. K&L Gates revealed it had no bank debt and had invested $109,629 in office equipment, leasehold improvements and IT.