Despite increases in its lawyer and partner ranks, Covington & Burling reports that the firm’s gross revenue remained relatively flat in 2010.
Covington reported a 2010 gross revenue of $582.5 million, a decrease of less than 1% from the $583 million the firm reported the previous year, according to this year’s AmLaw 200, NLJ affiliate The American Lawyer’s survey of the 200 top earning law firms in the United States.
Profits per partner dropped by 3.8% to $1.16 million. That was down from $1.2 million in 2009. Covington’s revenue per lawyer was also down last year, slipping by 5.6% to $835,000.
(Following a change in methodology for the 2011 AmLaw 200, Covington’s 2009 numbers have been recalculated to reflect a full-year head count. All year-on-year percentage changes are based on those recalculated numbers.)
Timothy Hester, Covington’s chairman, said that the firm’s strategy of investing in the lateral market didn’t yield immediate increases to its bottom line. But he said the firm is better positioned for growth thanks to a number of high-profile hires.
“We made a number of lateral additions that showed our emphasis on growing and building for the long haul,” Hester said.
As examples, Hester pointed to the hires of John Dugan, a former comptroller of the currency; and Edward Yingling, the former president and chief executive officer of the American Bankers Association. Dugan and Yingling joined the firm’s Washington office in December.
The firm brought on such additional laterals as Gerard Waldron, who stepped down as staff director and chief counsel of the House Select Committee on Energy Independence and Global Warming in March; Steven Fagell, the deputy chief of staff to Assistant Attorney General Lanny Breuer, who joined in July; Peter Lichtenbaum, former vice president for regulatory compliance and international policy at BAE Systems Inc., who joined in August; James Garland, the deputy chief of staff to Attorney General Eric Holder Jr., who joined in August; and Peter Nickles, former attorney general for the District of Columbia, who joined in December. Fagell, Garland, Lichtenbaum, Nickles and Waldron all joined the Washington office.
Internationally, the firm added Timothy Stratford, the former U.S. Trade Representative for China affairs, who joined the Beijing office in February 2010; and Peter Camesasca, who joined Covington’s antitrust practice in Brussels from Howrey in March. And earlier this year, Covington brought on Robert Amaee as of counsel in its London office. Amaee had previously been with the United Kingdom’s Serious Fraud Office.
In all, the firm’s head count climbed by 5.9% to 698. The firm’s partner ranks grew from 208 in 2009 to 224 in 2010—an increase of 7.2%.
Hester said the firm approached the lateral market with the idea of bolstering practices that had been doing well. Those included antitrust, white collar defense, and patent litigation. Hester added that the firm’s insurance and life sciences practices have been going strong and that its corporate practice is starting to see signs of life after a couple of off years.
“As did many firms, we saw an impact on our corporate practice during the recession. But even with the work down a little during last year, we still had a couple of significant matters on the corporate side,” Hester said. He cited the firm’s representation of King Pharmaceuticals Inc. during its $3.6 billion acquisition by Pfizer Inc. late last year.
The firm represents the National Football League in its negotiations with the NFL Players Association in a labor dispute that centers upon the players’ share in league revenues.
Covington is working on a number of cases that appear to be headed to jury trials and is working to bring on more laterals, particularly in some of its smaller offices, which will be “brought up to scale,” Hester said. “We feel that we’re well positioned for the coming year to start reaping the rewards of our investments in 2010."