Winston grows… conservatively
31 August 2009
While most firms have resorted to cutbacks and layoffs, Winston has grasped the nettle and expanded its overseas capabilities
For A firm well-known for its cautious attitude to expansion, Winston & Strawn has made some bold moves recently.
While most firms battened down the hatches in the wake of Lehman Brothers’ collapse, Winston took an aggressive stance and saw weakness in others as an opportunity to expand internationally.
In November last year the Chicago-headquartered firm launched in Hong Kong after snaring a team from the now defunct Heller Ehrman. Days later Winston snapped up a 19-strong team of lawyers from Thelen Reid Brown Raysman & Steiner.
Not what one would expect from a firm traditionally viewed as cautious and conservative.
But managing partner Thomas Fitzgerald insists that his firm has struck the right balance between cautious growth and seizing opportunities revealed by the downturn.
“We’re always very careful,” insists Fitzgerald. “We have no debt and we manage the business cautiously. Having said that, we need to invest to be able to follow our international strategy. Our partners understand this.”
Despite its recent splurge on talent, Manhattan’s legal community maintains its view of Winston as a conservative firm.
“They consider their moves very carefully,” says legal consultant Bruce MacEwen. “I think this environment could actually be good for them. They’re a litigation shop with a lack of investment and commercial banking clients, so the firm hasn’t been so heavily exposed. They’re in good shape and able to make hires.”
Over the past financial year Winston increased revenue by 6.7 per cent, up to $744m (£459.9m) from $694 in 2007. Profit remained relatively unchanged, dipping slightly to $1.27m.
But Winston’s recent success has not come completely untainted. Earlier this month (19 August) The Lawyer reported that Addleshaw Goddard had hired arbitration partner duo Jamie Harrison and Kent Phillips to bulk up its London-based arbitration team, leaving Winston’s London office with just three partners.
“Winston says it has a strong international platform, but how can you say that when London is so small?” asks one former Winston partner. “There’s a lot of work to be done to develop the network to the level and standard they want.”
Despite doubts about the health of the firm’s London office, Fitzgerald and London head Thomas Benz are confident about Winston’s UK capabilities.
“Our emphasis is on cross-border work,” says Benz. “London’s been an important part of that and we’ve contributed to the network considerably. We’re still recruiting into London and feel confident about our practice here.”
Viewed primarily as a disputes shop, Winston is focusing on IP and arbitration to expand its network. Building up in Hong Kong, Beijing and Shanghai with a range of IP hires and building out London with arbitration lawyers has brought reasonable success for the US firm.
Winston’s litigation group contributed a total of $314m to firmwide turnover during the 2008 financial year, equating to 45 per cent of the $694m total.
But while the firm has maintained a balance of practice areas in the US, there is doubt about its expansion plans with its focus on litigation.
“It’s not an appealing prospect for corporate lawyers,” says one former Winston partner. “There isn’t enough of a focus on this practice in the US, so it doesn’t translate to its international offices.”
The image of Winston’s strong litigation practice but weak international corporate practice could be a hindrance for the US firm in the future, when markets recover.
“The idea has been to tee up litigation across the network first,” says one New York recruiter. “It’s what they’re known for. They know they need to work on corporate internationally. But it makes sense to focus on their core strength rather than buying up corporate teams for the sake of it.”
There are definitely gaps in Winston’s international capabilities. It has made significant headway in building out an international litigation team, but corporate requires some attention.
While the downturn continues, though, Winston looks to be in good shape. Sources indicate that just a single-digit revenue drop is expected for the current financial year.
There is still work to be done, but so far Winston’s international progress is good.
Winston & Strawn embarked on an aggressive hiring spree in recent years. At the beginning of 2008 the US firm made a dramatic entry into the second-largest banking centre in the US, Charlotte, with a raid on rival firm Kennedy Covington Lobdell & Hickman for six partners.
That team was bolstered by the hire of a five-lawyer team from Hunton & Williams in Charlotte.
At the other end of the year Winston added to its US offices, snaring a team of 19 lawyers from collapsed firm Thelen Reid Brown Raysman & Steiner in November.
Internationally, Asia has been a critical focus. In 2008 Heller Ehrman’s demise gifted Winston a ready-made office in Hong Kong.