​Debevoise PEP at $2.3m as bottom line boosted by cost cutting

Debevoise & Plimpton has posted a 2 per cent rise in total revenue for the 2013 financial year, with turnover growing from $675.43m to $688.2m.

Average profit per equity partner (PEP) stood at $2.31m last year, an 11 per cent rise on the previous year’s $2.075m while net profit was $318.78m, up more than 7 per cent from $296.84m. The latter gives Debevoise a profit margin of 46 per cent.

The firm’s presiding partner Michael Blair said the firm’s efforts at managing costs over the past few years had contributed to the healthy profit margin.

“We were able to bring the revenue increase to the bottom line because of some successful expense management steps over the past few years,” said Blair.

Debevoise’s presiding partner said those steps included changes on the real estate side which had made a “significant” impact. These included office relocations in London and Paris to cheaper offices, consolidating the firm’s use of space, subletting a portion of space and giving some space back to the landlord.

Blair said there had also been headcount reductions over the past few years among administrative staff that had had an impact on the bottom line.

“We’ve been very cautious on administrative staff hiring over the past few years, gradually bringing those numbers down, and that continued in 2013,” added Blair. “There have been very modest decreases for a couple of years in total staff but that’s beginning to add up.”

Debevoise’s fee-earner numbers shrank slightly during 2013 from 614 to 595. The firm had 138.12 partners on a full-time equivalent basis (18.64 of whom were based in London) along with 456.83 associates. Debevoise did not disclose total staff numbers.

On the legal practice side Blair said the year had been characterised by continued strength in what he described as its “franchise areas” such as private equity (including private funds), transactions and regulatory matters for financial institutions, M&A and also smaller practices such as real estate.

However Blair said the single strongest performer was Debevoise’s white collar regulatory practice headed by partner and deputy presiding partner Bruce Yannett.

Blair said the firm’s investment in London, notably in its litigation group, had also made a tangible difference, particularly for institutional clients.

“We now have a deep team of senior experienced people, which is what these sort of clients really want,” said Blair.

Last year Debevoise’s growth in London was reflected in its move to larger premises at 65 Gresham Street. The firm now has more than 80 lawyers in London including 19 partners and 12 international counsel.

Last year the firm continued to invest in its litigation group, notably in London which for several years has been one of the busiest parts of the practice.

Last December Debevoise hired litigation partner Tony Dymond from Herbert Smith Freehills in London, a year after the firm took heavyweight Kevin Lloyd (5 December 2012) from its City rival (17 December 2013). Lloyd joined Debevoise’s London office in July 2013 while Dymond joined in February this year.

Other major firmwide matters included advising anchor clients American International Group on the $5.4bn sale of International Lease Finance Corporation to AerCap; Clayton Dubilier & Rice on US Foods’ $8.2bn merger with Sysco; and Norilsk Nickel on a range of matters including a $1bn Eurobond.

In 2013 Debevoise posted effectively flat revenues and average profits for the 2012 fiscal period, with total revenue virtually static at $675.43m and net profit standing at $296.84m (28 February 2013). Average PEP was also flat at $2.075m.