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The Am Law 100, the Early Numbers: Stroock Sees Revenue Dip, Profits Inch Up
The Am Law Daily
Stroock & Stroock & Lavan saw its gross revenues dip slightly in 2012 to $264 million, revenue per lawyer hold flat at roughly $920,000, and profits per partner increase 1.7 percent to $1.2 million, according to reporting by The American Lawyer.
The news comes as Stroocka 287-lawyer firm known for its bankruptcy, entertainment, litigation, and real estate expertisemoved to let go of an undetermined number of secretaries in Los Angeles, Miami, and New York, even as it also prepared to open a new office next month in Washington, D.C., according to sources familiar with the matter.
Stroock, which shuttered a previous outpost in the nations capital over a decade ago, was also forced late last year to vacate its downtown Manhattan headquarters in the aftermath of Superstorm Sandy. The firm's office at 180 Maiden Lane overlooking New York Harbor was shuttered due to damage the building suffered during the flooding of New York's financial district during the storm. Stroock had renewed its lease for 225,000 square feet in the downtown office tower several years ago, according to our previous reports, and the firm, which also has space at another location in midtown Manhattan, found itself scouring the city for extra accommodations.
The Wall Street Journal reported in November that a relationship between Kirkland & Ellis restructuring partner Jonathan Henes and Stroock financial restructuring practice cochair Kristopher Hansenboth of whom frequently face off against one another in bankruptcy proceedings, with Hansen advising creditors and Henes representing debtorshelped Stroock reach a deal to sublease two floors from Kirkland at its offices in the Citigroup Center at 601 Lexington Avenue.
Stroock senior partner Leonard Boxer, chairman of the firms prominent real estate practice (Boxer is frequently touted as one of the top commercial real estate lawyers in New York), also played a key role in helping Stroock find the 60,000 square feet of new space with elevator service and phone lines down at its Maiden Lane base. (Other firms based in downtown Manhattan, such as Sullivan & Cromwell and Fried, Frank, Harris, Shriver & Jacobson, were also displaced.)
Its unclear how much Stroock paid Kirkland for the subleaseHansen, one of the firms highest-paid partners, did not respond to a request for comment and a Stroock spokesman declined to commentbut the relocation was only temporary, as the firm returned to its downtown location in mid-December, according to a report at the time by sibling publication the New York Law Journal.
December was the same month that Stroock corporate partner Todd Lenson led a team from the firm advising Parsippany, New Jerseybased PBF Energythe fifth-largest oil refiner in the countryon a $533 million initial public offering. SEC filings related to that listing show that the IPO yielded $3.5 million in legal fees and expenses. (Cahill Gordon & Reindel represented underwriters on the offering led by Citigroup, Credit Suisse, and Morgan Stanley.)
Stroocks bankruptcy group also grabbed a role on the Chapter 15 bankruptcy of Humpuss Sea Transport, a Singaporean unit of a large Indonesian shipping company, one of many large international shippers seeking a safe port of call in U.S. bankruptcy courts, as noted in an op-ed in the New York Law Journal this week by Stroock partners Andrew DeNatale and Curtis Mechling. Other potentially lucrative assignments loom on the horizon as bankrupt mortgage-lender Residential Capital won approval this week to appoint Stroock bankruptcy cochair Lewis Kruger as its new chief restructuring officer.
Stroocks litigation group in New York also helped two of the citys most prominent politicians navigate delicate situations. The New York Daily News reported in January that Assemblyman Sheldon Silver had paid $35,000 to Stroock as part of an investigation into sexual harassment allegations involving a fellow assemblyman. And Stroock senior partner Robert Abramsa former New York state attorney generalwas paid at least $128,450 for his work handling an internal campaign finance probe for city comptroller and one-time mayoral hopeful John Liu.
Nonetheless, Stroock has recently moved to trim some of its overhead. Above the Law first reported late last week news of the potential layoffs of secretaries by Stroock, whose 401(k) retirement plan did recently win accolades in a study of large firms.
Like many law firms, we continually review how to better service our attorneys and clients, a Stroock spokesman said in a statement to The Am Law Daily. In this instance, the firm is enhancing its secretarial services by adopting a team or pool-based approach, which is able to more efficiently allocate secretarial resources and make better use of technology. To help us appropriately staff this service area, as a first step we are offering a voluntary severance package to our entire secretarial staff that includes both compensation and health care benefits.
Stuart Coleman and Alan Klingler have served as comanaging partners of Stroock since 2007, having assumed leadership of the firm from well-regarded predecessor Thomas Heftler. (Heftler, who headed Stroock from 1995 to 2006, was tragically killed on a Saturday morning in June 2007 when he was struck by a drunk driver while riding his bike in Southampton, New York.)
Neither Coleman nor Klingler were available to discuss Stroocks financial performance in 2012. In recent years the firm, which is run by a six-to-eight member operating executive committee, has slipped from the back end of The Am Law 100 into the ranks of The Am Law 200, while the number of lawyers employed by Stroock has fallen to 287 from a high of 357 in 2008, according to annual attorney head count data compiled by sibling publication The National Law Journal.
Of course, many of Stroocks contemporaries have also trimmed their ranks in the aftermath of the economic downturn. The firms head count mostly remained flat between 2011 and 2012, although the number of equity partners at Stroock fell nearly 7 percent from 105 to 98 during that same time period. (Stroock has an all-equity partnership that is compensated on a modified lockstep system.)
Last year Stroocks Los Angeles office saw Scott Pearson, the former cochair of its consumer financial services litigation practice, depart for Seyfarth Shaw, while entertainment and media litigation partner Ronald Sittler left for Blank Rome. Also quietly leaving Stroock was Jeffrey Shumway, a Hollywood agent who was a high-profile hire by the firm in 2009 after he left the William Morris Agency ahead of its merger with rival Endeavor.
In New York, partner Peter Koffler left Stroock to head the real estate practice of Venable, while structured finance partners Anthony Schouten and Jeffrey Stern departed for Pillsbury Winthrop Shaw Pittman. Another Stroock partner in New York, Robert Guazzo, left the firm and now has his own solo practice.
Stroock offset some of those departures by bringing on former Jefferies & Co. investment banker Frank Merolaa gaming industry veteranas a restructuring and real estate partner in Los Angeles. Also joining Stroock in Miami was entertainment partner James Sammataro from Kasowitz, Benson, Torres & Friedman.
Sammataro joins an entertainment litigation practice group at Stroock headed by John Gatti, a high-profile hire in 2009 from Greenberg Traurig, where Gatti cochaired the firms national media and entertainment litigation group. Gatti is based in Los Angeles, where Stroocks entertainment group made all kinds of headlines in 2012.
Financial services litigation partner Julie Strickland is the Los Angeles offices resident rainmaker, and corporate entertainment Schuyler Moore is frequently named one of the top deal lawyers in Hollywood. Last year Moore advised on a deal that helped secure financing for a sequel to Sin City, according to Deadline Hollywood.
Moore was also named in suits filed against Stroock and Los Angeles firm Levene, Neale, Bender, Yoo & Brill last year by Hollywood film financiers Ronald Tutor and David Bergstein in a war over film financing. But Bergsteins effort to bludgeon Stroock and Levene Neale with a $50 million verdict he won in a separate suit against another lawyer failed last year after his case against both firms was dismissed. In February a California state court judge ordered him to pay $460,000 in legal fees for both firms, according to legal newswire Law360.
Stroock also prevailed last summer in a fight over pay with former litigation partner Michael Perlis in Los Angeles, who had sued the firm in August 2011 over retirement benefits. Perlis, now a partner at Locke Lord, saw his case against Stroock moved early last year to arbitration, where he was ordered in July to pay the $163,000 tab accrued by Stroocks lawyers from Proskauer Rose, according to our previous reports.