West Coast firms celebrate as PEP figures for 2005 soar
6 February 2006
The majority of firms in the US's West Coast technology heartland recorded their best overall growth last year since the days of the dotcom boom.
Profits were also up at most firms, although several required a degree of internal reorganisation to help them achieve their impressive figures.
Morrison & Foerster (MoFo) headed the charge to a higher average profit per equity partner (PEP) figure. The top-grossing Bay Area firm for 2005, with revenue up 16 per cent to $687m (£387.5m), de-equitised around 50 of its partners. The move helped MoFo's PEP rocket from what would have been around $950,000 (£535,900) to $1.5m (£850,000), representing the firm's first $1m-plus result.
In 2004, Orrick Herrington & Sutcliffe was the only Bay Area firm to top $1m (£560,000). It posted a PEP of $1.1m (£620,000). Last year its PEP continued to rise, up 9 per cent to $1.2m (£650,000). In fact, growth all round was the theme for Orrick in 2005. Lawyer numbers grew significantly, while it opened in Taipei, ramped up in Tokyo and, of course, added lawyers in London, Moscow and Hong Kong. The hires contributed to a 14 per cent growth in fee income to $554m (£312.5m).
Gibson Dunn & Crutcher continued its impressive run, posting its ninth record year in a row. The firm, which has no non-equity partners, bucked the trend among those Bay Area firms that de-equitised partners to keep PEP high. Managing partner Ken Doran attributed the healthy figures to strong performances in its antitrust, securities and environmental teams, as well as good performances in its European offices. London, in particular, was "pushing hard", he said.
Pillsbury Winthrop was another beneficiary of major revenue growth in 2005, although the firm's dramatic revenue increase came primarily via last April's merger with Shaw Pittman. The tie-up generated an additional 33 per cent increase on Pillsbury's pre-merger figure last year, taking gross fees to $574m (£323.8m). PEP suffered, though, dropping from $605,000 (£341,300) to $545,000 (£307,400) despite the new firm having 10 per cent fewer equity partners than the pre-merger Pillsbury. Revenue per lawyer also dropped slightly to $665,000 (£375,100) last year.
Wilson Sonsini Goodrich & Rosati's financial year only closed on 31 January, so precise figures were not available at the time of going to press. But sources suggest that the firm is anticipating its first revenue gain since 2001, with gross fees expected to be up by around 8 per cent to $406m (£229m).
Not all Bay Area firms had such a stellar year. Heller Ehrman's revenue was all but static at $475m (£267.1m), up from $472m (£266m) last year. The firm also shrank, dropping almost 40 lawyers on 2004 to 590.
Cooley Godward also saw a minimal increase in revenue, up just 3 per cent to $298m (£168m), while Fenwick & West's revenue rose 4 per cent to $159m (£89.7m).
|West Coast results 2004 and 2005|
|Gibson Dunn & Crutcher||746.1||420.9||693.2||391|
|Morrison & Foerster||687||387.5||593||334.5|
|Pillsbury Winthrop Shaw Pittman||574||323.8||627**||353.7|
|Orrick Herrington & Sutcliffe||554||312.5||484||273|
|Wilson Sonsini Goodrich & Rosati||406*||229||377.5||212.9|
|Thelen Reid & Priest||278||157.8||240||135.4|
|Fenwick & West||159||89.7||153||86.3|
*Estimated ** Pillsbury $432.5m (£244m) and Shaw Pittman $191.5m (£108m)