Fisher & Phillips managing Partner, Roger Quillen.
Fisher & Phillips managing Partner, Roger Quillen. (John Disney/Staff)

Despite what managing partner Roger Quillen described as continuing downward pressure on billing rates, Fisher & Phillips saw its revenue climb by 4.5 percent in 2013, to $139.5 million—not as hefty as its 9 percent jump reported in 2012, but still a mark of steady growth for the labor and employment boutique.

Net income also was up 4.5 percent, to $58.5 million. Profits per equity partner jumped 3.1 percent, to $500,000. Notably, said Quillen, compensation to all partners including nonequity partners, was not far behind, at $449,000.

Lawyer productivity remained strong, Quillen said, but average hourly rates only increased by slightly more than 1 percent, a “big challenge” that has continued since 2008 with only 1 percent or 2 percent gains each year.

“I see no end to that in sight,” he said.

Fisher & Phillips also continued to expand its footprint, opening three new offices—in Columbus, Ohio, Gulfport, Miss., and San Antonio—and reporting a net gain of 11 lawyers, bringing its attorney head count to 267 firmwide. Equity partners numbered 117 last year, up one from the year before, while nonequity partners dropped from 33 to 31.

Nine new partners, including four equity partners, were hired in 2013, Quillen said. Among them: four who came aboard when Denver’s Stettner Miller closed. Two new partners were hired from Jackson Lewis in Philadelphia, and the Columbus, Gulfport and Boston offices each added one new partner.

Quillen said the reason the actual number of all partners dropped from 149 to 148 last year was because of decisions by several partners to retire or take senior counsel status. No partners were hired away from the firm in 2013, he said.

“We did promote some partners, too,” he said.

The firm reported $57.3 million in profits for 2013, up from $54.6 million in 2012, which Quillen attributed to “outstanding expense control.”

While revenue was up by $6.1 million more than a year ago, he said, expenses only grew by $3.4 million—less than 5 percent—despite opening the new offices and hiring several new lawyers.

“If you could turn back the clock to 1943, when Fisher & Phillips was founded, you’d see that we’ve always had a culture of expense control,” Quillen said. “We have very little overhead, and we’ve clamped down on staff support for our lawyers. For example, we only have six IT people for a firm with 267 lawyers.”

Quillen said that—given the slowly recovering economy and thousands of new lawyers entering an already crowded market every year helping to keep rates down—Fisher & Phillips will continue to embrace alternative billing arrangements, such as flat-fee or phased billing.

Quillen said the firm also is about to embark on a sophisticated, firmwide project management program similar to the Six Sigma-style initiative launched a few years ago by Seyfarth Shaw under the moniker Seyfarth Lean.

“They report a big difference in their ability to deliver quality legal services,” said Quillen, whose offices are in the same building as Seyfarth’s.

“Project management is top-down program management of time and efficiency,” Quillen explained, that aims to provide the “right amount of partner input, associate input, paralegal input. There’s no wasted motion; the plan is to achieve the same excellent results with fewer resources invested.”

Fisher & Phillips will continue to grow, said Quillen, who has his eye on three cities he would like to expand into this year.

“We’re looking at regional capital cities. We want offices in all the major centers around the country.”

Quillen said he plans to acquire free-standing practice groups in the target cities with an eye toward merging them into Fisher & Phillips, as was the case when the firm absorbed the 19-lawyer Millisor & Nobil in Cleveland three years ago.

Quillen said that unlike some other firms that once solely were devoted to labor and employment law but have since diversified into other practice areas, such as Seyfarth and Morgan Lewis, Fisher & Phillips will “continue to stick to our knitting as one of the premier firms choosing to limit our practice to representing the interests of management in issues arising on the workplace.”

He predicted another busy year for management-side labor lawyers, citing an “activist regulatory regime” in Washington and in some state capitals. Specific concerns, he said, include a renewed interest by the National Labor Relations Board in speeding up union elections, greater interest by the Occupational Safety and Health Administration in investigating workplace safety issues, more aggressive pursuit of affirmative action programs in the workplace by the Office of Federal Contract Compliance, and renewed interest by the Wage and Hour Division in white-collar exemptions from overtime pay, “in response to White House marching orders.”

But there are challenges from Washington to labor law firms as well as to their clients, he said. Particularly worrisome is a proposal from the Department of Labor to initiate a “persuader rule,” which would require companies and their law firms to report instances, receipts and expenditures related to any union-organizing issues.

The American Bar Association has asked the DOL to reconsider the rule, and on March 19, some 14 state attorneys generals sent a letter to Labor Secretary Thomas Perez expressing concerns that the move could “undermine long-standing protections of confidential attorney-client communications.”

The rule, “if implemented, would destructively impact firms like ours by driving a wedge between us and our clients,” Quillen said. It was set to go into effect this month, but has been postponed indefinitely.

Quillen said another potential threat looms in Congress, where lawmakers are considering mandating that law firms convert from cash-basis accounting to an accrual-based model, which would essentially count account receivables as actual revenue.

Such a measure would be an accounting nightmare for law firms and partners, Quillen said, and could force some firms out of business.