Just days after Davis Polk & Wardwell managing partner Thomas Reid announced he was leaving the firm to serve as Comcast Corp.’s next general counsel, the firm revealed its 2018 financial results. The numbers glowed.
Gross revenue increased by 12 percent to a record-high near $1.4 billion and profits per equity partner climbed even more. Reid says he wouldn’t have left the 170-year-old Wall Street firm if it wasn’t in a position to thrive.
But if revenues at Davis Polk continue to grow in double figures over the next several years, the firm will have managed to break from a trend: All four Am Law 200 firms that have undergone a similar transition since 2012 saw top-line growth rates slow in the second and third years after the changeover. Three of those firms even saw their revenues decline by the third year.
Some opportunities may indeed follow a leader’s move to a top client, which could serve to lock in or even intensify a lucrative relationship.
“If it’s a big client with millions in fees, that’s arguably more important than the partner staying at the firm,” says Jeffrey Lowe, who leads Major, Lindsey & Africa’s law firm practice group. “I think most people would look at it as a good thing.”