Top 100 Law Firms in Pennsylvania
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Firm Financials 2011 REED SMITH Reed Smith saw its second straight year of revenue growth in 2011. Profits per equity part- ner took a dip of nearly 3 percent in a year that saw profit margins squeezed as expenses increased. The firm's gross revenue grew 3.7 percent from $958 million in 2010 to $993 million in 2011. Reed Smith saw an increase in demand in 2011, growing revenue and RPL through a larger jump in billable hours than it saw in attorney headcount. RPL grew 1.1 percent year over year, inch- ing up from $661,000 in 2010 to $668,000 in 2011. The firm's billable hours increased about 4 percent to around 2.57 million hours. Head- count grew by 2.6 percent to 1,486 lawyers worldwide. The equity partner tier dropped by three lawyers to 313 partners and the noneq- uity tier grew 4.8 percent to 392 lawyers. Reed Smith global managing partner Greg- ory B. Jordan described 2011 as "a solid year in a tough environment." He said demand is still sluggish and there is a lot of price pressure and competition. Even still, Reed Smith looked to continue investing in growth, which he said resulted in profits dipping. The firm brought on 33 lateral partners across the equity and nonequity tiers in 2011, causing PPP to slip, he said. Reed Smith's numbers show expenses increasing at about an equal rate as revenue, making growing profits while growing head- count a difficult task. The firm's PPP fell 2.9 percent from $1.05 million in 2010 to $1.02 mil- lion in 2011. Average compensation for all part- ners dropped 2.2 percent to $660,000. The firm's net income dropped 3.5 percent from $331.5 million in 2010 to $320 million in 2011, causing a dip in the firm's profit margin from about 35 percent to 32 percent. PEPPER HAMILTON After a 5.8 percent dip in 2010, Pepper Hamil- ton's gross revenue rose 3.5 percent in 2011. Between 2009 and 2010, the firm's reve- nue fell from $333 million to $313.7 million. In 2011, however, the firm's revenue jumped to $324.6 million. The firm saw its profit margin inch up from 35 percent to 37 percent and its net income grow about 9 percent, from $111 million in 2010 to $121 million in 2011. Pepper Hamilton's equity partner profits increased in 2011 by a wider margin than they RPL PPP RPL PPP RPL PPP 0 0.25 $668,000 $1.02M $661,000 $1.05M $660,000 $1M 0.5 0.75 1 Gross Revenue: $993M Equity Partners: 313 Total Attorneys: 1,486 Gross Revenue: $958M Equity Partners: 316 Total Attorneys: 1,449 Gross Revenue: $942M Equity Partners: 315 Total Attorneys: 1,427 1.25 1.5 (RPL and PPP in Millions) 1.75 2 2.25 2.5 RPL PPP RPL PPP RPL PPP 0 0.25 $692,000 $766,000 $683,000 $731,000 $691,000 $721,000 0.5 0.75 Gross Revenue: $324.6M Equity Partners: 158 Total Attorneys: 469 Gross Revenue: $313.7M Equity Partners: 152 Total Attorneys: 459 Gross Revenue: $333M Equity Partners: 142 Total Attorneys: 482 1 1.25 1.5 (RPL and PPP in Millions) had the previous year. In 2010, the firm saw its PPP rise about 1.4 percent from $721,000 in 2009 to $731,000 in 2010. In 2011, the firm's PPP climbed roughly 4.8 percent to $766,000. The firm's RPL also grew about 1.3 per- cent, from $683,000 in 2010 to $692,000 in 2011, after slipping about 1.2 percent the pre- vious year. While the firm's executive partner, Robert E. Heideck, told The Legal last year that the firm was able to increase profits in 2010 by being "very careful about our expenses and very cost-conscious during the year, " he said that the "robust nature" of several of the firm's practices was the real driving force behind profit growth in 2011. "We had some expense savings — really expense reimbursements — from matters for the prior year, but I don't think that was so sig- nificant that it moved the needle in any mate- rial way, " he said. The firm appeared to be in a hiring mode over the past year, increasing its overall head- count by roughly 2.2 percent in 2011, from 459 lawyers to 469 lawyers, after a drop of about 4.8 percent the previous year. "I think we're always looking to grow, " Heideck said. "Sometimes we're successful and sometimes it's a matter of timing. " After growing its equity partner tier by 7 percent in 2010, the firm increased its number of equity partners by about 4 percent in 2011, from 152 lawyers to 158 lawyers. Meanwhile, the firm grew its nonequity partner tier by about 9 percent in 2011, from 55 lawyers to 60 lawyers, after a steep drop of about 21.4 percent from 70 nonequity part- ners in 2009 to 55 lawyers in 2010. (continued on page 102) PaLaw 2012 | 101 1.75 2 2.25 2.5 2009 PEPPER HAMILTON 2010 2011 2009 REED SMITH 2010 2011