In looking ahead to 2013, Hoffman said the firm spent a lot of time last year reorganizing its staffing models and integrating its 2011 expansion efforts. Now the focus is revenue growth, Hoffman said.
"We've maintained our expenses at a pretty level clip," Hoffman said. "That's led to [the fact that] growth in revenue becomes growth in profitability."
Keeping Expenses in Line
Blank Rome has placed a keen eye on expense management over the past few years. While the firm actually carried some accounts payable over from 2011 into 2012, it was able to prepay $2 million worth of 2013's expenses out of 2012 profits, Hoffman said.
Between 2010 and 2011, Blank Rome's net income fell 12.1 percent. But between 2011 and 2012, that figure rose 16 percent from $90.5 million to $105 million. The firm's profit margin rose from 29 percent in 2011 to 32 percent in 2012.
Regardless of where the firm's revenue has been over the past few years, Blank Rome's expenses have hovered between $186 million and $188 million since 2007. For 2013, the firm is budgeting for a second straight year of $188 million in expenses, meaning it isn't expecting expenses to rise year over year.
In an effort to manage expenses, Blank Rome has shifted its staffing models, most recently by offering its entire secretary pool voluntary separation packages in an effort to decrease the firm's secretary-to-lawyer ratio to 1-to-4. Sources had said the firm was looking to eliminate about 30 secretarial positions, though Blank Rome would not confirm that number. The time period for accepting the buyouts recently passed and Hoffman said enough people took the buyout that the firm was not forced to do any layoffs to meet its staffing goals.
Hoffman also confirmed that in 2012 the firm outsourced its document services or word processing department to Wheeling, W.Va.-based Williams Lea. One source said the number of Blank Rome staff affected by that move was approximately 20 people. Hoffman said he didn't think it was quite that many. He said he thought some of the firm's staff was hired by Williams Lea.
Hoffman said there were a couple of "initial bumps" when the firm made the transition, but he said the arrangement is working fine as far as he is aware. He said the cost savings of such a move aren't necessarily realized in the first year, but will more likely be seen in two or three years.
Williams Lea also does billing collections work and Hoffman said the firm is looking at that option among others.
"Anything where you can continue to deliver the services where staffing functions and other support services that the law firm needs [are done] on a less expensive basis that ultimately saves your clients money is what we're looking to accomplish," Hoffman said.
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