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The Am Law 100, the Early Numbers: Saul Ewing Revenue Up 7.8 Percent, PPP Up 12 PercentFollowing a 2011 fiscal year in which its revenue stayed nearly flat, Saul Ewing saw its 2012 revenue shoot up 7.8 percent despite only a modest increase in attorney head count.
2013-01-31 12:00:00 AM
Following a 2011 fiscal year in which its revenue stayed nearly flat, Saul Ewing saw its 2012 revenue shoot up 7.8 percent despite only a modest increase in headcount.
Managing partner David S. Antzis attributed this financial growth spurt to a "strategic vision" focused on improving client service and increasing market share, which enabled the firm to snag some significant work from the jaws of its larger competition.
The firm's revenue increased from $122.5 million in 2011 to $132 million in 2012.
Meanwhile, its overall headcount increased by only 3.2 percent, from 219 lawyers to 226, but its revenue per lawyer (RPL) increased by 4.5 percent, from $560,000 to $585,000.
In addition, the firm's profits per partner (PPP) went up 12 percent, from $500,000 to $560,000, while its equity partner tier decreased by only two lawyers, from 83 to 81.
Antzis said that while a lot of large firms increase their revenue each year by adding more attorneys without increasing their profitability, Saul Ewing's revenue increased in 2012 simply because its existing lawyers brought in more business.
According to Antzis, the firm was involved in several significant matters on both the litigation and transactional sides.
For example, the firm's Baltimore litigation team won a favorable ruling for the city's police and firefighter unions when a Maryland federal judge struck down the mayor's plan to overhaul the police and fire pension system.
On the transactional side, Saul Ewing attorneys in Boston represented real estate client KS Partners in its $65 million purchase of New Boston Fund Inc.'s office portfolio in Connecticut.
Antzis said the key for his firm has been recognizing that demand in the current legal market is basically flat, which means the only way to grow revenue organically is to generate more work from existing clients.
That's where client service comes in, according to Antzis, who said the firm has made a major push in recent years to conduct more client satisfaction meetings and to make real adjustments based on the feedback they received.
One request the firm has heard from a number of in-house counsel, Antzis said, is for greater cost predictability, which has led the firm to become more flexible with regard to fixed fee and alternative fee agreements.
According to Antzis, that flexibility has paid off.
When the firm was tapped to jointly represent both Exelon Corp. and Constellation Energy Group in merger approval proceedings before the Maryland Public Service Commission, both companies had reservations about the amount of legal fees that could potentially pile up during what was certain to be a long, intensive process, according to Antzis.
To allay their fears, Antzis said, Saul Ewing agreed to charge the companies only 80 percent of the total legal fees throughout the course of the proceedings, with the understanding that if the merger was approved, the companies would pay the firm a multiple of the remaining 20 percent, but if the merger was denied, the firm would write off the remaining fees.
In March, the PSC approved the merger, according to Antzis.
But getting creative with fee agreements is only one of the ways the firm has been able to increase market share, Antzis said, explaining that the firm has kept its traditional hourly rates down as well.
Antzis said the firm's annual rate hikes have remained "modest" between about 1.6 percent and 5 percent since the recession, noting that Saul Ewing has been able to maintain relatively low overhead compared to many megafirms by avoiding expenses like overseas offices and extravagant partner retreats.
Price, however, can only take a firm so far and Antzis said Saul Ewing has been able to lure business away from larger firms not just by being more affordable, but by offering the same or better quality service.
So, for instance, when Supernus Pharmaceuticals decided to make a second public offering this past year, it hired Saul Ewing, despite having previously used 977-lawyer Boston firm Ropes & Gray for its initial public offering, according to Antzis.
"That was a big win for us," Antzis said.
Of course, the fact that Saul Ewing has been focused on bringing in more work from its existing clients has not precluded the firm from continuing to grow as well.
In May, the firm opened an office in Pittsburgh, bringing on four business attorneys from the Pittsburgh office of Schnader Harrison Segal & Lewis with an eye toward getting involved in the Marcellus and Utica natural gas shale plays.
While Antzis admitted that growth in that market was difficult initially, largely because the firm had until recently been renting temporary office space, the firm kicked off 2013 by hiring John P. Englert, an energy and environmental attorney, who joined as a partner from K&L Gates' Pittsburgh office.
Antzis said the firm will look to continue to grow in Western Pennsylvania, as well as in Boston, where the firm opened an office in 2011 with the acquisition of nearly all of Boston-based real estate boutique Dionne & Gass.
In terms of continued geographic expansion, Antzis said the firm is currently keeping an eye out for opportunities to open new locations in Ohio, Manhattan and Northern Virginia.
Antzis said he feels the firm is now strong enough to support significant growth in headcount as well, noting that the firm is currently looking for opportunities to acquire smaller shops.
Antzis said he believes Saul Ewing could expand to 350 or 400 lawyers without needing to make significant infrastructure upgrades.
While the post-recession challenges law firms continue to face are no secret, Antzis said the successful year his firm had in 2012 has given him a brighter outlook on 2013 than many of his firm leader colleagues may have.
According to Antzis, the firm was awarded some business in 2012 that is likely to keep many of its attorneys busy for the foreseeable future.
Last year, Penn State University hired Saul Ewing to defend it in civil litigation stemming from the Jerry Sandusky sex-abuse scandal.
In addition, Antzis said, RioCan, the largest real estate investment trust in Canada, recently bought out its U.S. joint venture partner and has hired Saul Ewing to represent it in all U.S. acquisitions and operations.