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Merger talks between Wolf Block Schorr & Solis-Cohen and Cozen O’Connor were said to be on hold while Wolf Block closed out its fiscal year that ended Jan. 31. Those numbers are now calculated, and, according to data supplied to The Legal, Wolf Block saw its gross revenue and profits per equity partner increase by 8 percent. The firm’s gross revenue grew from $145 million in 2005 to $157 million in 2006. The profits per equity partner (PPP) increased from $448,000 in 2005 to $485,000 in 2006. Wolf Block’s revenue per lawyer (RPL) saw about a 5 percent increase for the second straight year, moving from $514,000 in 2005 to $541,000 in 2006. Wolf Block Chairman Mark L. Alderman said the firm was busy across the board but had a particularly strong year in real estate and litigation and saw all of its offices contributing to the growth in its financial performance. Between 2004 and 2005, Wolf Block’s gross revenue grew by 11.5 percent and its PPP grew by about 15 percent. The firm also saw a nearly 17 percent decrease in the number of equity partners from 100 in 2004 to 82.7 in 2005, and a 67.5 percent increase in non-equity partners from 43 in 2004 to 72 in 2005. Alderman said the biggest discrepancy between 2005 and 2006 increases was in the firm’s PPP. He said the firm restructured, “to a modest degree,” its partnership last year. The growth in PPP for 2005 was due to that restructuring and an increase in business. “This year it’s all business,” he said, which is why the PPP did not increase at as high a rate. For 2006, the firm had a total of 305 attorneys, 84 of whom were equity partners. There was a 5 percent decrease in non-equity partners, from 72 in 2005 to 68 for 2006. “This year was done the old-fashioned way,” Alderman said of the PPP and RPL increases. Without knowing Cozen O’Connor’s financial performance for 2006, it looks like some of Wolf Block’s numbers are getting closer to those of what Cozen O’Connor reported for 2005. Cozen O’Connor’s PPP in 2005 was $470,000 and its RPL was $460,000. Bob Nourian of Coleman Nourian said that if Wolf Block’s 2006 numbers would make a difference in the merger talks, they had probably already been discussed. Alderman said he had no idea what Cozen O’Connor’s numbers were for 2006, but he might find out this week. “It is certainly helpful for firms to be similar in terms of revenue per lawyer and profits per equity partner,” Nourian said, particularly when it comes to deciding who will be given equity status in the combined firm. Nourian said it is safe to assume that Cozen O’Connor will have increases in its key financial indicators because that looks to be the trend among most law firms this year. The gap between the two firms’ PPP and RPL may close, however, because Cozen O’Connor hasn’t been traditionally strong in the practice areas that are “booming,” such as corporate and transactions, mergers and acquisitions and private equity work, Nourian said. That may make it easier, he said, for the firms to combine partner tiers. Alderman said it is “very hard” to combine two large firms and “you can’t even think about doing it if the numbers aren’t in reach.” There are still “a thousand challenges” other than financials to a potential merger, he added. When asked whether the firm’s financial performance would make it a more attractive merger candidate, Alderman said it is always good to have your numbers increase. As they go up, he said, there are greater opportunities for potential combinations. That won’t, however, have a dramatic impact on the firm’s strategy, he said Wolf Block “called a time-out” on merger discussions while it was closing out its year, Alderman said, and he anticipates those talks to resume this week. While the firm saw a few attorneys leave in 2006, it has gained some in the last few months. Alderman said he doesn’t think the merger discussions are far enough along to have an effect on attorneys wanting to leave or join the firm. “The merger talks have been of more interest to the legal community than to our attorneys,” he said. Last year, Alderman had pointed to a strong performance by the firm’s New Jersey offices in 2005, with plans on continued growth for 2006. David S. Garber of Princeton Legal Search Group said the firm tried to make a big splash in 2003 through its merger with 53-attorney Brach Eichler Rosenberg Silver Bernstein Hammer & Gladstone in Roseland, N.J. That gave Wolf Block a strong health care practice, which they are still solidly known for within the Garden State, Garber said. He said he doesn’t know that Wolf Block has made a name beyond that practice area in New Jersey. Alderman said the firm had strong performances from all of its practice areas out of New Jersey, particularly in the real estate and litigation groups as well as the health care group. Along with the conclusion of its fiscal year, Wolf Block is still finalizing both bonuses and salary determinations, Alderman said. Last year, the firm increased its first-year associate pay to $125,000, and he said the firm was meeting last Friday to discuss whether to institute another increase. Last year, Alderman said, the bonus structure ranged from zero to $25,000.

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