The PA Law 100

2012

Top 100 Law Firms in Pennsylvania

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Firm Financials 2011 In 'Stabilizing' Year, Firms Saw PPP Level Out By Zack Needles | Of the Legal Staff I n 2010, many Pennsylvania firms saw their profits per equity partner (PPP) gains far outpace modest revenue growth in the wake of a dismal recession, but those figures appeared to even out considerably in 2011. In what one managing partner described as a "stabilizing" year, several firms saw their PPP growth lag behind their revenue growth. Others actually experienced decreases in their PPP even as their revenues rose. While many firms reported seeing glim- mers of hope in long-dormant practice areas like corporate and real estate transactional work, a number of firm heads used words like "tough" and "choppy" to describe the overall legal environment. Still, it was clear the legal market had come a long way since 2009, when the economy sank to one of its lowest points in history. K&L GATES K&L Gates had a relatively flat year when it came to gross revenue and revenue per law- yer, growing each by under 1 percent. The firm saw a 4.3 percent decrease in profits per equity partner in what Chairman Peter J. Kalis said was a year of expenses growing at a faster rate than revenue. K&L Gates' gross revenue increased 0.6 percent from $1.055 billion in 2010 to $1.061 billion in 2011. The firm's RPL grew by nearly 0.7 percent from just under $599,000 in 2010 to nearly $603,000 in 2011. PPP dropped from about $930,000 in 2010 to around $890,000 last year, according to preliminary reports from the firm. K&L Gates' headcount remained almost unchanged, decreasing by one lawyer to 1,762 in 2011. Kalis said the equity tier was "down some." "While a solid performance, it was a sober- ing reminder of the power of the market- place," Kalis said of the firm's 2011 financial results. He said the firm's transactional practices started off strong but lost some wind in their sails in the second quarter and never regained it. That falloff in the transactional space was enough to "take the oomph out of a number 100 | PaLaw 2012 of practice areas that were very hot," such as intellectual property litigation, government enforcement work and regulatory work tied to financial services. DECHERT After seeing gross revenue fall by nearly 29 percent between 2007 and 2010, Dechert has started to move in the opposite direction, growing revenue 3.5 percent in 2011. The firm grew its gross revenue from $648.5 million in 2010 to $671 million in 2011, according to numbers gathered by Legal affili- ate The American Lawyer. Dechert saw even greater growth in other key financial metrics, such as RPL, PPP and average compensation for all partners. The firm's RPL grew 4.7 percent from $860,000 in 2010 to $900,000 in 2011. Its PPP increased 5 percent from $2.01 million to $2.11 million. The average compensation for all partners increased 4.6 percent, from nearly $1.405 million to $1.47 million. Despite the increase in gross revenue, the firm's 2011 figure doesn't match the revenue figures Dechert generated in 2009, 2008 or 2007, at which point the firm brought in $713 million, $815.9 million and $836.5 million, respectively. But the dip in revenue between 2007 and 2010 also coincided with a substan- tial dip in headcount from 922 lawyers in 2007 to 756 in 2010. For 2011, the change in attorney census was minimal, with overall headcount dropping 1.2 percent to 747 lawyers. The equity partner tier dropped 3.4 percent, or by five partners, to 141 equity partners. The nonequity tier increased 1.9 percent, or by two lawyers, to 105 nonequity partners. Dechert Chief Executive Officer Daniel O'Donnell said the firm was pleased with 2011's revenue growth, which he said came from a broad-based strength across a num- ber of practice areas. Litigation, particularly in the areas of corporate investigations and international arbitration, was very busy, along with the firm's investment management, life sciences, and real estate and leveraged finance practices. MORGAN LEWIS Morgan Lewis increased its gross revenue 7 percent from $1.08 billion in 2010 to $1.16 bil- lion in 2011. The firm's RPL increased 2.3 percent from $875,000 to $895,000 in 2011. The firm's PPP grew 7.1 percent from $1.4 million to $1.5 million. Morgan Lewis' head- count increased nearly 5 percent to 1,300 lawyers, while the total number of partners increased by just a handful. The equity partner tier increased by two attorneys to 247. RPL PPP RPL PPP RPL PPP 0 0.25 0.5 $908,000 $1.96M 0.75 1 1.25 1.5 (RPL and PPP in Millions) 1.75 2 $900,000 Gross Revenue: $671M Equity Partners: 141 Total Attorneys: 747 $860,000 $2.01M $2.11M Gross Revenue: $648.5M Equity Partners: 146 Total Attorneys: 756 Gross Revenue: $713M Equity Partners: 149 Total Attorneys: 786 2.25 2.5 2009 DECHERT 2010 2011

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