Milbank rode 2021′s wave of high demand for transactional work to its second consecutive year of double-digit growth in revenue and profits.
Revenue at the New York-based firm hit $1.36 billion, up 10% from the previous year, while profits per equity partner climbed to just over $5 million, a 12% increase.
He highlighted strong results around the globe in corporate work, including capital markets and the firm’s finance practices. On the litigation side, white-collar work began picking up in late 2021 and continues to be healthy as a result of increasing activity by regulatory agencies and the U.S. Department of Justice.
In 2020, Milbank raised both revenue and profits by approximately 16%
“To have this kind of strength over the past couple of years, everything has to be performing, and that’s the case here,” Edelman said.
The firm’s London office delivered standout results, with revenue climbing nearly 25% to $235.6 million. Edelman credited the firm’s leading capital markets and leveraged finance teams there, along with work on restructuring and litigation, noting the addition of several new corporate partners. He also highlighted a particularly strong year in Germany.
“As usual, the work came from a lot of sources,” Edelman said, noting that he was particularly pleased with an engagement in which the firm’s New York M&A team advised private equity firm Veritas, a new client, in its $17 billion sale of Athenahealth to Hellman & Friedman and Bain Capital.
The firm also represented all of the debt financing sources in connection with the $30 billion acquisition of Medline Industries, deemed by industry observers to be one of the largest leveraged buyouts since the 2008 financial crisis.
Restructuring lawyers were busy with work advising Colombian airline Avianca, one of the largest in Latin America, through the U.S. bankruptcy process. And the firm also represented European life sciences client Sartorius in its acquisition of a drug manufacturing business, the first time an acquirer obtained prior approval from the FTC under the Biden administration.
All this work put Milbank in position to implement industry-moving associate salary hikes twice in the last year, first in June 2021 and again in January 2022.
“Revenues have been strong enough that we can afford the large bonuses that were paid last year and the salary increases,” Edelman said. “The industry is healthy enough, and we’ve seen cost-of-living increases such that it made sense to increase the base salary for our lawyers by a comparatively moderate amount.”
“There’s a very healthy margin between the salaries we’re paying and last year’s total compensation that allows firms to figure out the amount of total compensation through the bonus process,” he added.
Edelman said Milbank saw expenses in other categories remain depressed in 2021 because of the continued impact of the COVID-19 pandemic, but he anticipates spending on marketing, travel and training to rise this year as long as conditions continue to normalize.
One area where the firm does not expect to realize long-term savings is real estate, however. The firm moved into a new 70,000-square-foot office in London in November after taking 250,000 square feet in New York’s Hudson Yards in 2018.
“Our growth trajectory has been and will be such that we are using the space we have,” Edelman said. “We’re believers in the benefits of physical proximity of our lawyers being important. So while we’re trying to achieve flexibility for our lawyers, we continue to believe that for training and for culture, it’s important that lawyers are in the office, and that’s going to continue to require high-quality space.”
Milbank’s head count grew modestly in 2021, rising 2.2% to 819 lawyers. The equity partner tier, home to a vast majority of the firm’s partners, was essentially flat, but the firm did have some standout laterals.
In May 2021, the firm hired two Schulte Roth & Zabel corporate partners, including former M&A and securities practice co-chairman Rick Presutti. And it made major investments in Asia, adding four Hong Kong partners in January 2022 from Linklaters and Clifford Chance with strengths in private equity and leveraged finance, and then hiring Dechert’s Asia co-managing partner, David Cho, to lead its Seoul office in January 2022.
Edelman expects the firm to pursue further growth opportunities as they arise in 2022.
“We as a firm are always opportunistic,” he said. “We’re always looking for the best of the best to add to the firm. There aren’t that many of them out there that fit our standards, but we’re always looking.”