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Revenue Up at Jackson Lewis as Employment Firms Buck Trend
The American Lawyer
February 05, 2009
Last year was one of aggressive expansion for employment law firm Jackson Lewis. The growth spurt had been in the works for three years -- well before the global economy collapsed under the weight of bad mortgages and worthless securities.
Still, when the economy did crumble, Jackson Lewis just kept expanding -- head count grew by 20 percent in 2008, through August 31 (our cutoff date for measuring head count in this ranking); it has grown by another 12 percent since. Even better news for the firm and its 167 equity partners: gross revenue shot up 20 percent in 2008, to just over $233 million, and profits per partner crept up about 2.6 percent to $517,000, from $505,000. Revenue per lawyer was flat at $495,000.
How did Jackson Lewis do it? The same way Littler Mendelson out-distanced its Bay Area competitors this year: by focusing on a practice area (employment law) that appears to be recession-proof. As we've noted before, employment lawyers are saying they are busier than ever during this economic downturn, with Fortune 100 clients calling almost daily for advice on how to conduct layoffs without running afoul of worker notification rules and anti-discrimination requirements.
"We're doing fine," says Patrick Vaccaro, the firm's managing partner. "A lot of the business we're doing now is recession-related, but to me, that's not the kind of business that makes me happy. I'd rather have our employer clients healthy. In the long-term, that's best for us."
In addition to its hiring spree (the firm's head count has shot up from 395 in late 2007 to about 530 today, and almost all those lawyers, save about 40 associates, are nonequity partners), the firm opened eight new offices in 2008. The offices include new digs in Memphis, Tenn.; Jacksonville, Fla.; Albuquerque, N.M.; Detroit and Las Vegas -- a spot the firm had coveted for a long time, Vaccaro says.
"For a firm to be a national boutique," as Vaccaro calls it, "these are places you have to be."
The firm expects to open two or three new offices in 2009, but "not eight or nine like last year," Vaccaro says. Even though Jackson's practice is thriving, it's still watching expenses carefully and listening hard to client demands for rate freezes or alternative fee arrangements.
That kind of flexibility won Jackson a major prize in 2008: the exclusive right to do all of Pfizer's employment work through 2009, for which Pfizer pays Jackson a fixed fee each month. If Pfizer finds it hasn't given Jackson enough work to justify the monthly fee, it can ask for a chunk of the money back, Vaccaro says. Jackson does not have the same right; the firm cannot ask Pfizer to pay it more if the hours pile up beyond what the two sides expected.
Jackson beat out nine other finalists for the Pfizer contract, and Vaccaro and Kevin Lauri, the Pfizer relationship partner, say it's working out. Lauri says the two sides haven't yet discussed extending the agreement.
As for limits on how much Jackson Lewis will grow, Vaccaro says there are none. But he knows the firm has to be careful in the current climate.
"You have to be super-cautious," Vaccaro says. "We have to be extraordinarily sensitive to the rate pressures of our clients."
Click here for the final published results of last year's Am Law 100 ranking.
This report is part of The Am Law Daily's ongoing Web coverage of The Am Law 100's 2008 financials, bringing you our own reports and those from our sibling publications at Incisive Media. Results are preliminary.
Final rankings and full results for The Am Law 100 will be published in The American Lawyer's May issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.
This article first appeared on The Am Law Daily blog on AmericanLawyer.com.
