The Am Law 100, the Early Numbers: Shearman Starts to Deliver on Turnaround Pledge
On the heels of several rocky years, Shearman & Sterling's new senior partner, Creighton Condon, pledged in an American Lawyer cover feature published in July 2013 that the firm was determined to reverse its fortunes and catch up to its peers in profitability. The results are in for the Condon-led management team's first full year at the helm, and Shearman has indeed taken a big step toward achieving that goal.
The firm saw its gross revenue rise 9.1 percent last year, to $820.5 million, and its profits per partner jump 18.4 percent, to $1.8 million, according to The American Lawyer's reporting. Revenue per lawyer, meanwhile, climbed 13.4 percent to top the $1 million mark. On the head count front, Shearman's equity partner population ticked up by one, from 158 to 159, while its total number of lawyers dipped about 4 percent, to 809, mainly as a result of the firm's decision to trim associates in China and close two offices in Germany.
"We're very happy with the outcome," says Condon, "and we have reason for confidence that it's sustainable."
Condon said Shearman's move to reorganize into cross-disciplinary client teams had increased its billings to 22 key clients by more than 80 percent. The firm has hired 18 lateral partners over the last 14 months in the targeted areas of litigation and investigations, project finance, leveraged finance and private equity. A total of 16 partners departed over the same period, including 10 based in Germany who left the firm as a result of the office closings there.
Even as Shearman's overall revenue grew at a healthy clip last year, the share attributable to litigation engagements continued its steady two-year rise from a league-bottom 20 percent to 25 percent, Condon says.
Among the headline deals it handled in 2013 last year, Shearman represented Liberty Global Inc. in connection with its $23 billion acquisition of Virgin Media Inc., the underwriters working with Petrobras on an $11 billion debt offering program that is the largest in emerging markets history, and affiliates of Toyota Motor Corporation in a pair of financings collectively worth close to $25 billion.
Looking ahead to 2014, a full pipeline of deal work has Condon feeling optimistic. "We have aggressive internal growth targets," he says. "We're comfortable we'll be up again."
This report is part of The Am Law Daily's early coverage of 2013 financial results of The Am Law 100/200. Final rankings and full results for The Am Law 100 will be published in The American Lawyer's May 2014 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.