Philadelphia-based Drinker Biddle & Reath grew its revenue by about 1.7 percent and its profits per equity partner (PPP) by about 0.7 percent in 2012 in what executive partner Andrew C. Kassner called a "solid year" for the firm.
The firm’s revenue rose from $385.5 million in 2011 to $392 million in 2012.
According to Kassner, Drinker Biddle has been able to maintain revenue growth in recent years in part because of its commitment to maintaining a 50-50 split between business and litigation practices.
"We don’t put all of our resources in one place," Kassner said.
Kassner said the firm’s pharmaceutical mass torts, commercial litigation, labor and employment, insurance and health care practices were all busy in 2012.
In addition, Kassner said the firm was active on the corporate transactional side as well.
For example, in one of the largest deals the firm worked on last year, a Drinker Biddle team led by Philadelphia-based partner Doug Raymond represented Charming Shoppes Inc. in its $890 million sale to Ascena Retail Group Inc.
The firm grew its equity partner tier by about 1.1 percent, from 186 partners in 2011 to 188 partners in 2012, and its net income by about 1.5 percent, from $132 million in 2011 to $134 million in 2012.
The combination of these increases led to a rise of about 0.7 percent in the firm’s PPP, from $710,000 in 2011 to $715,000 in 2012.
Meanwhile, what Drinker Biddle refers to as its "limited-equity" partnership tier dropped by about 23.7 percent, from 76 lawyers in 2011 to 58 lawyers in 2012, causing the firm’s limited-equity compensation to decrease by about 14.3 percent, from $28 million in 2011 to $24 million in 2012.
The firm’s average compensation for all partners went up by about 5.7 percent, from $610,000 in 2011 to $645,000 in 2012.
Kassner said that, over the past four years, the firm has been making a concerted effort to reduce the percentage of its partnership that falls into the limited-equity category.
According to Kassner, the limited-equity partnership tier ballooned when Drinker Biddle merged with Chicago-based Gardner Carton & Douglas in 2006.
Kassner estimated that 45 to 50 percent of Gardner Carton’s total partnership had been made up of limited-equity partners.
Kassner said Drinker Biddle has been converting limited-equity partners to full-equity partners at a rate of about eight or nine per year over the past four years.
In 2012, Kassner said, the firm converted nine limited-equity partners to full-equity partners.
While the firm does not intend to do away with the limited-equity tier altogether, Kassner explained, the goal is for most of the partners who start out in that tier to eventually graduate to the full-equity partner tier.
According to Kassner, having a tier of permanent limited-equity partners clashes with Drinker Biddle’s philosophy that valuable attorneys should be stakeholders in the firm.
The firm’s total headcount dipped by 1.2 percent, from 579 attorneys in 2011 to 572 attorneys in 2012, which Kassner attributed largely to retirements.
Its revenue per lawyer (RPL), meanwhile, rose by about 3 percent, from $665,000 in 2011 to $685,000 in 2012.
Kassner said Drinker Biddle made a number of sizable investments last year.
One of the firm’s largest undertakings of 2012, according to Kassner, was the launch of Drinker Discovery Solutions, a Chicago-based subsidiary of the law firm that was formed with an eye toward offering less expensive e-discovery management to the law firm’s clients as well as to serve non-law firm clients.
The firm also invested significant capital in infrastructure improvements, including reducing its existing Philadelphia office space by about 25 percent — from 10 floors to seven-and-a-half — in an effort to improve space efficiency, Kassner said.
But, despite these expenses, Kassner said the firm still ended the year with virtually no debt, which has become increasingly important in an era when more and more laterals are asking to look at firms’ balance sheets.
Kassner said Drinker Biddle now finds itself well-positioned to take advantage of a potential economic upswing.
And while Kassner admitted that, looking forward, the economy’s trajectory remains uncertain due to volatile factors like the sequester, the fiscal cliff and the European market, he said the firm is optimistic about 2013.
Kassner said one of the firm’s goals for the coming year is to grow its Los Angeles presence.
Drinker Biddle added 11 attorneys from 16-lawyer Reish & Reicher in Los Angeles in March 2011.
The firm currently has a total of 28 lawyers in Los Angeles.
Kassner said the firm’s Los Angeles attorneys had a strong year in 2012, noting that partners George T. Caplan and Sheldon Eisenberg were busy with their commercial litigation practices, as was partner C. Frederick Reish with his employee benefits practice.
Kassner said Drinker Biddle will also look to grow its Mid-Atlantic footprint, particularly in New York.
The firm began 2012 by adding former Dewey & LeBoeuf partners Thomas M. Dawson, John P. Mulhern and H. Michael Byrne, along with three associates, to its insurance regulatory practice in New York.
Kassner said Drinker Biddle is becoming a "destination" for insurance work, as well as for Employee Retirement Income Security Act litigation, a practice that is based in the firm’s Chicago office.
Kassner said the firm is also making a push to grow its white-collar criminal defense and corporate investigations practice.
In February, Drinker Biddle brought aboard former Assistant U.S. Attorney Daniel J. Collins as a partner in its Chicago office. In March, the firm hired partner Mary P. Hansen, former assistant director of the U.S. Securities and Exchange Commission’s Division of Enforcement, to its Philadelphia office.