View an interactive chart of early law firm finance reports.
After eking out gains in revenues and profits in 2011, Schulte Roth & Zabel saw small declines in both categories last year, according to The American Lawyer's reporting. The firm's gross revenues dipped 1.9 percent, to $370.5 million, while its profits per partner fell 2.5 percent, to $2.105 million.
Schulte partner and executive committee member Alan Waldenberg downplays the significance of the financial falloff. From the firm's perspective, he says, "We had a flat year." Citing Schulte's relatively small size—351 total lawyers last year versus 371 in 2011 and equity partnership ranks that held steady at 84—Waldenberg says, "the difference between profits per partner of $2.1 million and $2.15 or $2.2 million is pretty irrelevant from our point of view . . . it's the difference between collecting a few [year-end] bills or not."
Waldenberg points to the firm's litigation and asset-based lending practices as particularly strong performers in 2012. On the litigation front, Schulte handled a series of ongoing actions for interdealer broker Tullett Prebon and represented longtime client Cerberus Capital Management LP on its October settlement of a fraudulent conveyance suit bought by creditors of Mervyn's, a retailer carved out of Target Corp. in 2004. Schulte's asset-based lending group advised Cerberus in connection with a loan made to utility trailer manufacturer Big Tex Trailer Manufacturing Inc., and Highbridge Capital Management on a loan to OTG Management.
Transactional work, Waldenberg says, was "more spotty" in 2012, with the first half and last quarter of the year quite busy and the months in between somewhat slower. Schulte represented Charming Shoppes, owner of clothing brand Lane Bryant, on its $890 million sale to Ascena in a deal announced in May. The firm also represented Prisma Capital Partners, a hedge fund money manager with $8 billion in assets under management, on its sale to KKR the following month. (Terms of that deal were not disclosed.) Schulte's corporate work for Cerberus included representing the investment firm on its sale of a $2.5 billion controlling stake in Tokyo-based Aorzora Bank, and more recently, the $3.3 billion acquisition of food retailer Supervalu by a Cerberus-led investment group.
The decline in overall head count—all of it coming in the associate ranks—helped drive a 3.9 percent increase in Schulte's revenue per lawyer, to $1.055 million. Waldenberg says lateral hiring should restore the number of associates to 2011 levels this year, but is likely to go beyond that. "Leverage is harder now," he says. "The world is changing and [clients] want more senior people and our head count has gravitated in that direction."
This report is part of The Am Law Daily's early coverage of 2012 financial results of The Am Law 100/200. See our interactive chart. Final rankings and full results for The Am Law 100 will be published in The American Lawyer's May 2013 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.
