Covington & Burling saw another steady year of growth in 2012, posting a 6.4 percent jump in gross revenue and a 5.4 percent increase in profits per partner, according to our reporting. Firm chair Timothy Hester said that it was an especially good year for the firm's litigation, corporate and transactional, and life sciences practices.
The firm's gross revenue grew from $611 million in 2011 to $650 million last year. Net income increased by 9.4 percent and crossed the $300 million mark, growing from $275.5 million in 2011 to $301.5 million last year. Revenue per lawyer went up by 1.7 percent, from $865,000 in 2011 to $880,000 last year.
"I think it reflects the ongoing strategic plan that we've had in place for a number of years where we've been focused on solid steady growth in the firm and focused on some of the things that we believe we're doing exceptionally well in terms of practice areas," Hester said. "Our very strong patent litigation, insurance, white collar and products liability practices were all up last year."
Hester said the firm saw growth across its litigation practices, notably in antitrust, which he attributed in part to lawyers who joined the firm after Howrey dissolved in 2011. The firm scored several big wins for clients. In October, for example, the firm secured a $2.3 billion arbitration award for client Occidental Petroleum Corp., in a dispute with Ecuador. The award was believed to be the largest granted to an international corporation against a foreign country.
The firm's white-collar defense and government investigations practice was also busy, especially with Foreign Corrupt Practices Act cases and investigations. The firm represented Deere & Co., as it faced an investigation by the U.S. Securities and Exchange Commission into possible FCPA violations. The SEC notified the company in January that it would not take any enforcement actions.
Covington attorneys handled a series of high-dollar transactions, including Thomson Reuters' sale of its healthcare business for $1.2 billion, Microsoft's acquisition of $1.3 billion in patent assets – including $1.1 billion in patents from AOL – and Grupo Financiero Banorte and its affiliate Afore XXI Banorte's $1.6 billion purchase of Afore Bancomer, S.A. de C.V., which created Mexico's largest pension fund, according to the firm.
Although they didn't immediately contribute as much to the firm's bottom line, Hester pointed to the opening of new offices in Seoul and Shanghai last year as a major achievement. In Shanghai and Beijing, where the firm has had an office since 2008, Hester said they're seeing demand for work on behalf of companies going into China, including market access, life sciences transactions, and Foreign Corrupt Practices Act matters. In Seoul, he said they're working more with Korean-based companies on a broad range of matters around the world.
"We see this as an extremely important milestone for the firm, because it positions us in Asia in a very significant way for the future," Hester said.
In addition to its geographical presence, the firm's attorney headcount grew as well. The total number of lawyers went up by 4.4 percent, from 707 to 738, and the number of partners grew by 3.5 percent, from 230 to 238.
The firm brought on partners in a variety of practice areas and locations. New hires last year included Dan Bryant, the former senior vice president for global public policy at PepsiCo and a former assistant attorney general, who now oversees the firm's public policy and government affairs practice, and Michael Caballero, the former international tax counsel at the U.S. Department of the Treasury.
Looking ahead to 2013, Hester said the firm doesn't plan to open any new offices, but does plan to focus on expanding its global reach, from its new offices in Seoul and Shanghai to its work in Latin America, Africa, India, and the Middle East.
Domestically, Hester said that the firm is focusing on expanding its offices on the West Coast, in New York, as well as in Europe. In October, the firm signed a 20-year lease for a new 420,000 square-foot space in downtown Washington. "There's a lot of steady growth across the firm that we expect," he said.
This report is part of The National Law Journal‘s coverage of 2012 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 2013 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.
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