Kaye Scholer has posted drops in both total revenue and average profit for the 2011 financial year.
Total fee income fell by 3.4 per cent to $420m while average profit per equity partner (PEP) was also down, by 6.4 per cent to $1.4m, the US firm confirmed.
Mike Solow, Kaye Scholer’s managing partner, said fee collections had exceeded budget but investments in the firm’s back office finance and marketing functions along with lateral hires had hit the bottom line.
“We could’ve put it in partners’ pockets but didn’t,” Solow said. “We made significant investments in 2011 and we expect to make more in 2012.”
Solow said the firm was budgeting for “relatively flat” growth in 2012. He refused to break out the financial performance of Kaye Scholer’s nine-partner London office, saying the firm operated on practice area rather than office lines.
“But we’re very happy with the performance of the partners in London,” Solow added.
Kaye Scholer is not planning to open any new offices during 2012, either nationally or internationally, Solow added.
“We aim to contine focusing on our core practices and serving our clients as a US-based business with three offices in London, Frankfurt and Shanghai,” Solow said.
Kaye Scholer’s most recent new office was opened in 2010 in Palo Alto to focus on IP and life sciences.
Solow, who joined the firm as a lateral in 2001, took over as Kaye Scholer’s sole managing partner in January this year having run the firm together with New York litigator Barry Willner, the firm’s first managing partner. Previously Kaye Scholer had been led by the executive committee and chairman.
“Barry was a full-time managing partner but I plan on continuing fee-earning,” said Solow, “though at probably closer to 1,000 hours a year than 2,000.”