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Washington—2004 was a tough year for Swidler Berlin. The Washington-based firm’s head count shrank significantly. It tried and failed to merge with both Orrick, Herrington & Sutcliffe and another Washington firm, Dickstein Shapiro Morin & Oshinsky. Key rainmakers in its antitrust and white-collar defense practices and in its D.C. lobbying subsidiary jumped ship. And on New Year’s Eve, virtually all of the lawyers in Swidler’s New York office bolted to Dechert. So how on earth did a firm with that many problems manage to score one of its best financial years ever in 2004, with profits per equity partner climbing above $1 million? In part, by capitalizing on its failures, sources with knowledge of the firm’s finances say. The firm bailed out of its top-of-the-market lease in New York’s Chrysler Building. It also booked a multimillion-dollar check from Dechert as part of the deal that sent 57 New York attorneys and eight Washington lawyers to that firm. And as Swidler shrank, so did its equity partnership. The number of partners fell from 60 to 55-allowing the firm to divide profits among a smaller group. A strong financial year And by other, more standard, measures, Swidler had a strong financial year. The law firm grossed $22.2 million through lobbying, according to data compiled by Influence, a sister publication of The National Law Journal. That figure was driven in large part by work from a business coalition called the Asbestos Study Group. And former partners report that business at Swidler, which has a well-regarded telecommunications practice, was strong in a number of different practice areas. The firm, which recently released its 2004 financial data as part of an annual survey conducted by NLJ sister publications Legal Times and The American Lawyer, reported profits per partner of $1.07 million—a 14% increase from 2003. The firm’s gross revenue fell by 2% to $154.6 million. Swidler managing partner Barry Direnfeld did not respond to repeated phone messages for this article. But in January, soon after the departure of the New York attorneys, Direnfeld touted the firm’s financial strengths in an interview with Legal Times. “We’re doing great,” Direnfeld said at the time. “We’re market leaders in a number of practice areas. We’re very profitable.” Yet interviews with sources familiar with Swidler reveal that the firm’s profitability was also helped by money realized from the New York partner exodus and the way the firm dealt with its pricey Midtown Manhattan real estate.

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