March 14, 2012 3:45 PM
The Am Law 100, the Early Numbers: At Kramer Levin, A Year of Mixed Financial Results
Posted by Julie Triedman
Kramer Levin Naftalis Frankel posted record gross revenue in 2011, but the firm’s profits per partner fell 3.5 percent, according to The American Lawyer‘s reporting.
The firm saw its gross revenue inch up 0.8 percent, from $309.5 million in 2010 to $312 million last year, while profits per partner dipped from roughly $1.7 million to about $1.64 million.
The firm’s financial performance last year was actually better than it might appear at first glance, according to Paul Pearlman, Kramer Levin’s managing partner for the past dozen years. The 2010 gross revenue figure, he notes, was inflated by a $14 million contingency fee. Still, Pearlman says, 2011 “was the best year ever in terms of revenues.”
Echoing other firm leaders, Pearlman says demand by the firm’s clienteleâ€”which includes many hedge funds, private equity firms, and other companies engaging in mid-market MA transactionsâ€”was fairly robust across practice groups in the first of 2011 before tapering off in the second half.
On the other hand, Pearlman says, the end of 2011 saw Kramer Levin’s real estate and land use practice groups rebound, as well as an uptick in both bankruptcy and litigation work. On the restructuring side, for example, the firm represents General Maritime in connection with its November Chapter 11 filing, a major hedge fund creditor in the ongoing Washington Mutual, Inc. bankruptcy, and the bank indenture trustee for bondholders holding $2 billion in debt in the AMR Chapter 11 proceeding.
On the litigation front, the firm took on a number of high-profile matters. White collar defense partner Gary Naftalis is representing Rajat Gupta, who was indicted last October on allegations that he passed internal Goldman Sachs earnings data to Raj Rajaratnam, the convicted former head of the Galleon Group hedge fund. And in May, Kramer’s Barry Berke and Paul Schoeman obtained the sole acquittal in the federal government’s tax shelter case against defunct Texas firm Jenkins Gilchrist and others. Berke and Schoeman were representing Raymond Craig Brubaker, a former broker in Deutsche Bank’s Dallas office charged with participating in the tax shelter scheme.
Profits, meanwhile, were hampered by an increase in expenses last year. For one thing, Pearlman says, an agreement dating back several years under which Kramer Levin paid no rent on a big chunk of space in its New York headquarters expired. The firm also had startup costs associated with the late September opening a new, IP-focused office in Menlo Park, California that is now home to 11 lawyers, including two partners hired away from King Spalding.
The firm’s overall head count and equity partnership ranks remained relatively flat, at 325 and 69, respectively.
This report is part of The Am Law Daily’s early coverage of 2011 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 2012 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue. An interactive chart of the financial results reported so far is available here. The chart will be updated as additional data is reported.
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