Paul Hastings chases Latham’s West Coast crown
The partners at Los Angeles (LA)-headquartered Paul Hastings are celebrating after the firm’s double-digit revenue growth over the past five years saw it leapfrog local rival O’Melveny & Myers and consolidate its lead over a third LA firm, Gibson Dunn & Crutcher.
In a banner year for Paul Hastings, the firm not only posted double-digit revenue and average profit per equity partner (PEP) growth for the second year in a row, but also outpaced local leviathan Latham & Watkins on PEP growth over the past five years.
Since 2002 PEP at Paul Hastings has grown from $940,000 (£470,000) to $1.92m (£960,000), an increase of 104 per cent. The comparable rise over the same period at Latham was 99 per cent, with PEP rising from $1.14m (£570,000) to $2.27m (£1.13m) last year.
Seth Zachary, chairman at Paul Hastings, says the rankings change is significant as a validation of the firm’s strategy, which is growth based on increasing its participation in high-value deals and cases, and also because of what it said about the firm’s growth over several years.
“Because of market conditions there’s need for caution in 2008, but we think we’re in a better position at the start of a new year than ever before,” Zachary explains to The Lawyer. “We see ourselves as being extremely well positioned for a very strong 2008.”
The fastest-growing West Coast-originated firm over the five-year period was Latham, which grew its revenue by 121 per cent between 2002 and 2007. As first reported on www.thelawyer.com (12 February), Latham also enjoyed a landmark year in 2007, with total turnover breaking through the $2bn (£1bn) barrier for the first time.
The firm’s West Coast practice was a significant contributor to this, with standout deals on the West Coast including the $27.8bn (£13.9bn) acquisition of Harrah’s Entertainment by Texas Pacific and Apollo, Oracle’s $8.5bn (£4.25bn) acquisition of BEA Systems and Micro Devices’ acquisition of ATI Technologies for $5.4bn (£2.7bn).
Scott Haber, Latham San Francisco office managing partner, says the diversity of the firm’s practice was particularly evident on the West Coast, with big wins for its San Francisco litigation practice (in a securities fraud class action against advertising company Omnicom), a raft of debt and equity offerings and five offices throughout the region.
“The diversity of our practice and West Coast coverage speaks to our strategic focus globally,” says Haber.
In contrast to Latham, the big loser last year in terms of revenue was O’Melveny & Myers. It surrendered it second-place spot to Paul Hastings after posting an increase in revenue of 7.5 per cent. And while O’Melveny’s PEP remained relatively high at $1.64m (£820,000), it only grew by 0.5 per cent during 2007.
The firm’s chairman, Arthur Culvahouse, argues that his firm’s change in position is not significant.
“The bottom line is profitability and making sure our highest-performing partners are rewarded at the highest level,” Culvahouse adds. “Achieving the highest gross revenue is just not a measure we look at when comparing ourselves against our peer firms. We had a good year in revenues. We would have liked a better year, but no one is going to cry about our partners earning $1.6m [£800,000].”
Gibson Dunn remained static in fourth place among the five largest firms on the West Coast, despite posting its eleventh consecutive year of record growth in both revenue and profit.
Gibson Dunn managing partner Ken Doran says: “We’re very proud of our consistency and sustained performance over the period, which we believe is the best measure.”
Elsewhere in the region, Orrick Herrington & Sutcliffe grew revenue by 16 per cent from the previous year’s devilish $666m (£361.96m) to $772m (£386m), while California rival Wilson Sonsini Goodrich & Rosati saw its revenue grow by around 13 per cent to $531m (£265.5m)
Byrne in the USA: Previous Blogs
Close but no cigar
So it’s farewell Fidel and hello New Cuba. Or, at least, it will be when the world’s longest-serving head of state really does call it a day by checking out permanently.
Until then the world (and the world’s lawyers) can only speculate about the untold riches on offer once Cuba opens up.
First up is Greenberg Traurig chief executive, Cesar Alvarez. Greenberg has just posted a solid set of results for a year that saw the US firm continue its rapid expansion across the globe. So is Cuba next?
Cesar (was there ever a better name for a law firm boss?) told me his firm was already excited by the possibility of change, but we might all have to wait a while. “If Cuba ever opens up, we’ll certainly look to be there,” he said.
But that’s still a big if. And he should know – he was born there.
“Castro was always very rigid and resistant to any change. His brother is much more of a pragmatist, whereas Fidel is very doctrinaire. But people have been frustrated for 50 years and had plans for 50 years. I’ll wait until I see some real change. So far I haven’t seen anything.”
Posted: 22 February
Sullivan’s true Brit
Over in London, Sullivan & Cromwell‘s new local co-head Vanessa Blackmore will be delighted to learn her appointment has got the thumbs-up from the New York market.
The consensus in Sullivan’s home town is that the promotion of a Brit for the first time ever to jointly head what is now the firm’s second-largest office is a significant step.
Of course, not every US firm in London has an English law capability on board, so promoting a Brit is not an option. But in the context of the ever-developing global legal market, any international firm in the City that does boast English law expertise, but doesn’t have a UK partner in a senior position, might want to take note.
Posted: 20 February
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