Bingham has posted its biggest decline in firm-wide revenue for 20 years, with total turnover for 2013 falling by 12.6 per cent from $871.8m to $762m.
As well as the $110m drop in revenue, average partner profit was also down, falling by 12.8 per cent from $1.69m to $1.47m. It is understood that numerous partners including chairman Jay Zimmerman will take a cut in partner pay as a result.
The financial performance of Bingham’s London office was significantly steadier. Last year the City office generated $52.3m, a 4 per cent fall from 2012’s record $54.7m.
The UK results suggest that the hardest hit part of Bingham’s global practice was the US, with bank regulatory work in particular thought to be under significant fee pressure.
In addition Bingham lost an untypically large number of partners last year, which will have had an impact on the top line. Among the losses was an 11-partner securities enforcement and regulatory group that joined SidleyAustin and London litigation partner Natasha Harrison, who quit to join US litigation powerhouse Boies Schiller & Flexner (7 October 2013).
Bingham’s London office head James Roome, who pointed to the decline in the debt restructuring market in Europe as the chief culprit for the drop in UK revenue, said he was “confident” that 2014 would be at least as strong financially as 2013 and denied there were any longer-lasting problems with the firm.
“I don’t think there’s an issue,” said Roome. “If you think back to 2008 and the years after that, we just cruised right through it when a lot of firms’ financials went down. I think we may have congratulated ourselves on our countercyclical brilliance.”
Roome said that during 2013 some notable pieces of litigation, including the Deepwater Horizon case and IP matters for clients such as Oracle, ended while in other cases clients “started settling and not fighting”. Roome admitted that the firm had, “also lost a bunch of partners”.
“Revenues wise that added up to quite a big hit,” he said. “We’d had much rather not have had it but I think it was just the year when some of those practices ran out of gas.”
In addition Roome said that the firm had been forced to make changes to several of its back office teams to bring them into line with new industry norms.
“Our ratios compared to peer firms were much higher in some areas,” said Roome. “We had to address that.”
Last year Bingham opened a $22.5m shared-services centre in Kentucky in a bid to address some of these issues (15 November 2012).
Roome issued a word of warning for rival firms, arguing that several of the larger firms were “still very exposed” internationally.
“Anyone with a strategy of increasing revenue or even keeping it stationary is chasing a dangerous goal,” claimed Roome. “You should be going after the most profitable work in the areas you’re strongest.”
Bingham’s European restructuring mandates in 2013 included representation of the senior lenders of Terreal Group (France), the senior noteholders of Uralita (Spain), the noteholders of Northland Resources (Sweden) and the noteholders of Invitel/Magyar Telecom (Hungary). The firm also continued its work for the creditors of all three Icelandic banks.
Bingham’s global revenue per lawyer (RPL) fell 1 per cent from $968,667 to $958,491 last year while its London RPL fell 5 per cent from $1.15m to $1.09m.