The PA Law 100

2012

Top 100 Law Firms in Pennsylvania

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Managing Partners Survey Spectre of Layoffs, De-Equitizations Returns for Pennsylvania Firms By Gina Passarella | Of the Legal Staff T he improved financial outlook and predicted end to staff and lawyer lay- offs reported by managing partners across the state in 2011 look to have ended as quickly as they appeared. In our 17th annual Managing Partners Sur- vey conducted in the summer of 2012, fewer law firm leaders across the state were able to show gains in revenue and profits, and more predicted this year than last that they would be forced to either lay off attorneys or staff or de-equitize partners in the coming year. After bleak years during the recession, 2011 seemed to bring brighter days and managing partners were optimistic looking into 2012. But the economy proved difficult to tangle with for many firms that saw a slowdown in demand at the end of 2011 and into 2012. Political and economic uncertainty in markets across the globe coupled with a continuing slowness in demand growth has caused some firms to look for ways to combat the fact that revenue is increasingly elusive. Though still only a minority, more firms said this year that they would have to look to layoffs of attorneys at all levels, as well as staff layoffs and de-equitizations. And fewer firms plan to grow by more than 10 percent in the coming year. BEYOND THE BORDERS Growth in terms of headcount when com- paring the pre-recession era to 2012 has not been found in Pennsylvania. The firms toward the top of our list of the 100 largest in the state are often the same year over year, with the same usual suspects jockeying for the top three spots. What it takes to make it to the top of the list in terms of full- time attorney headcount in Pennsylvania, how- ever, has gone down in the past five years. In 2007, before the recession took hold, Pepper Hamilton was at the top of our chart with 323 full-time lawyers in Pennsylvania. In 2012, Reed Smith ranks first (the third year in a row) with 312 lawyers in Pennsylvania. The 100 largest law firms in Pennsylvania in 2007 employed 8,302 full-time attorneys in the state, while the 100 largest firms in 2012 employed 7,873, a nearly 6 percent drop. When making a similar comparison of those firms' worldwide attorney headcount in 2007 and 2012, however, firms went in the opposite direction, growing 7.9 percent. The 100 firms on our 2007 list employed 25,177 lawyers. While not an exact comparison of the same firms, the 100 largest Pennsylvania firms in 2012 employed 27,173 attorneys. Much of that growth was driven by Am Law 200 firms that grew significantly over MERGER POSSIBILITIES DID YOUR FIRM HAVE NONPARTNER- TRACK ASSOCIATES FROM JUNE 2011 TO JUNE 2012? 6.5% Actively seeking merger opportunities 58.1% Would be open to merger opportunities 35.5% Has no interest in merging 80 | PaLaw 2012 40.6% Yes 59.4% No the past five years, often through large-scale mergers. The growth was focused in markets outside of Pennsylvania, with many firms viewing their Pennsylvania offices as mature and the demand for work in the state stag- nant in most segments with the exception of perhaps the energy sector. The decline in Pennsylvania numbers would appear to indicate that firms, particu- larly those headquartered in Pennsylvania, focused their layoffs during the recession in- state. The numbers could also indicate that firms did not look to fill vacant positions in Pennsylvania, whether they were caused by layoffs or just natural attrition. GROWTH AND CUTS In 2011, 9.7 percent of survey respondents said they grew significantly (more than 10 percent) in the previous year, while only 3.1 percent said the same this year. And while no firms said in 2011 that they had shrunk by more than 10 percent in the prior year, 6.3 per- cent of this year's respondents said they had. Respondents that shrunk less than 10 per- cent totaled 16.1 percent in 2011 and 15.6 per- cent in 2012. The bulk of firms grew less than 10 percent in both years — 58 percent in 2011 and 50 percent in 2012. Between June 2012 and June 2013, 65.6 HAS YOUR FIRM DE-EQUITIZED ANY PARTNERS BETWEEN JUNE 2011 AND JUNE 2012? 26.7% Yes 73.3% No

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