Covington & Burling posted increases in gross revenue, profits per partner and net income for fiscal year 2011, welcome news after the firm saw little or no growth in those same areas in 2010.
Gross revenue grew by 5.1 percent for the Washington-based firm, from $581.5 million in fiscal year 2010 to $611 million last year, according to our reporting. Profits per partner were up by 3.9 percent during that same period, from $1.155 million to $1.2 million, and net income grew by 6.4 percent, from $259 million to $275.5 million.
Firm chair Timothy Hester said the data reflect steady investment in headcount and international presence, even as the recession took a toll on the firm's bottom line in the past. In 2011, the firm added attorneys in its London, Beijing and other overseas offices, and just announced plans to open a Shanghai office later this year.
“We thought the right strategy for the firm was to expand our scale,” Hester said, adding, “We were prepared to hang tough.”
During Covington's 2011 fiscal year, which ended Sept. 30, the firm took on more patent litigation work, thanks to its growing California presence, Hester said. Attorneys in the San Francisco office also assisted Microsoft Corp. with its $8.5 billion purchase of Skype Global, along with other big transactional work.
The firm continued to grow its core practices as well. In the regulatory arena, the firm saw growth in its life sciences and banking practices, Hester said. On the life sciences front, notably, the firm has represented Eli Lilly & Co. in a dispute with Amylin Pharmaceuticals Inc. over a new diabetes drug, winning the denial of a preliminary injunction that would have stood in the way of Eli Lilly’s marketing efforts.
Besides patent litigation, Hester said the firm also expanded its litigation work in products liability and antitrust, and before the International Trade Commission. The firm helped represent the National Football League during last year’s player lockout, and Hester said they’ve also seen “explosive growth” in work surrounding the Foreign Corrupt Practices Act, especially in China.
“It reflects the way the global economy is going,” he said.
Total attorney headcount grew by 1.3 percent, from 698 to 707, and the number of equity partners went up by 2.7 percent, from 224 to 230. New hires in the local office include John Dugan, a former firm attorney who served as Comptroller of the Currency, and former District of Columbia Attorney General Peter Nickles, also a former firm attorney. Revenue per lawyer went up by 3.6 percent, from $835,000 to $865,000.
Looking ahead to next year, Hester, who just began his second four-year term as chair, said that in addition to preparing to open the Shanghai office, the firm soon will announce plans to open a third office in Asia.
“In the aggregate, we feel like we’re in a different place,” he said. The overseas expansion “changes the way we’re competing for new matters.”
This report is part of The National Law Journal‘s coverage of 2011 financial results for local Am Law 200 firms. Full results for The Am Law 200 will be published in the May and June print and online editions of The American Lawyer. Readers can also view an interactive chart for updated financial results as they are reported.