Bingham results reveal impact of service centre as PEP falls

Bingham has posted a dip in average profit per equity partner (PEP) and effectively flat firm-wide revenue growth for the 2012 financial year.

Jay Zimmerman
Jay Zimmerman

The US firm’s total turnover last year grew marginally from $868.5m to $871.8m. PEP fell from $1.71m to $1.68m while average revenue per lawyer (RPL) also fell, from $1m to $969,000.

Bingham chairman Jay Zimmerman highlighted his firm’s investment in its new $22.5m shared-services centre in Lexington, Kentucky as partly to blame for the dip in PEP.

Last year Bingham made an investment of around $15m in its global services centre (GSC) in Lexington. The first wave is due to open in April with around 120 people while Bingham expects to continue hiring throughout the year. Without the $15m investment in the GSC Bingham’s PEP would have been around $1.73m.

“This year we’re likely to invest another $11m to $15m,” said Zimmerman. “The benefits will phase in after a number of years but by the time it comes fully online the savings on an annual basis should come close to the total investment we’ve made.”

Firmwide headcount at Bingham was around 900 last year, 50 of whom (including 26 partners) were in London. Bingham’s London office, which celebrates its 40thanniversary this year, outperformed the firm-wide results significantly, with total City revenue up by 11.5 per cent from $49.1m to $54.7m. Average RPL in London also fell, however, from $1.2m to $1.16m.

Zimmerman argued that the context for the drop in RPL was that 2011 had been “a very strong year” largely because of Bingham’s representation of both Anadarko and Mitsui in matters relating to the Deepwater Horizon oil spill.

“That was an aberrational amount of work,” said Zimmerman.

He added that while some of the firm’s domestic practices, notably restructuring, did less well than other areas of the practice because of the lack of matters (in this case a lack of bankruptices), that dip had been offset by the practices in London and Tokyo.

Highlight matters for Bingham in the City include financial restructuring partner Liz Osborne leading a team advising the administrators of electricals chain Comet, which filed for administration last November.

Other major matters for Bingham last year include representing the holders ofmore thanof $24bn in bonds issued by the three major Icelandic commercial banks which failed in 2008; representing the private placement noteholders on the €1.3bn financial restructuring of Quinn Group; a multi-office international team acting as lead counsel advising camera and medical-device maker Olympus on issues relating to accounting irregularities totalling $1.7bn; represented Morgan Stanley in investigations relating to Facebook’s IPO; and representing Kerr-McGee Corporation in Tronox-related bankruptcy litigation.