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Technology-related clients were thriving. The IPO market was booming. Transactional lawyers were flooded with work. Bankruptcy lawyers were not. Firm managers gave generous, across-the-board raises to their associates. It might seem like ages ago, but it was only last year. And if you’re longing for those days, open the pages of this month’s edition of The American Lawyer, which relives the last stage of the pre-economic-downturn era in its full glory. In the latest installment of the magazine’s Am Law 100, an annual study of the nation’s 100 most profitable firms, there are two new members from Philadelphia — Blank Rome Comisky & McCauley and Duane, Morris & Heckscher, which are joined by mainstays Morgan, Lewis & Bockius, Dechert and Pepper Hamilton. Two Pittsburgh firms with large Philadelphia offices, Buchanan Ingersoll and Reed Smith, were also repeat members of the list. The rankings are based on gross revenue. Six other Philadelphia firms — Ballard Spahr Andrews & Ingersoll, Cozen & O’Connor, Drinker Biddle & Reath, Fox Rothschild O’Brien & Frankel, Saul Ewing and Wolf Block Schorr & Solis-Cohen — will be included in the Am Law 200, a list of the firms ranked 101 to 200 in gross revenue. That information is published in August. The magazine says that the Am Law 100 firms saw their gross revenue rise by an average of 19.5 percent and profits per partner by an average of 10.2 percent. The Philadelphia firms were, for the most part, ahead of the curve on both counts this year. Buoyed by its January 2000 merger with 80-attorney Tenzer Greenblat of New York, Blank Rome increased its gross revenues in 2000 to $164 million, a 56 percent rise that was good enough to move the firm from 121st to 89th. Blank Rome also saw its profits per partner (a statistic that includes only equity partners) increase to $420,000, a 12 percent jump, placing the firm 77th on the list. Firm co-chairman David Girard-diCarlo said the firm has increased billable hours steadily over the past four years and had an extremely busy year business-wise, which more than made up for merger-related expenses. Like Blank Rome, Dechert’s gross revenue also soared largely because of a merger, this one with 140-attorney Titmuss Sainer of London. Dechert’s numbers increased by almost 45 percent, compared to 15 percent the previous year and roughly 7 percent during fiscal year 1998. The increase was good enough to bump Dechert from 60th to 48th. Dechert’s profits-per-partner increase of 11 percent barely exceeded the national average and was well below the previous year’s 19.5 percent jump. The firm was ranked 58th in that category. Bart Winokur, Dechert’s chairman, estimated that about $45 million of the gross revenue increase could be attributed to the merger, while chalking up the rest to a strong year for many of the firm’s practice areas. He added that profits per partner might have been a bit higher if the firm had not entered into the merger, even though the firm believes the London addition will pay in the long run in that category. Duane Morris, which has been opening new offices and adding lawyers in the past two years as if it were going out of style — the firm has doubled in size over the past three years — saw the benefits of that in its gross revenue. In last year’s survey, the firm shot up the charts by a whopping 41 percent. This year, the firm had an almost as impressive 34 percent raise. Looking at a three-year scan, the firm has risen from 147th to 110th to 92nd, while almost doubling its gross revenue from $82.5 million to $156.5 million. As for profits per partner, Duane Morris increased by 13 percent to $390,000, which was good enough for 81st on the list. While the magazine chalks up Duane Morris’s recent surge to the $25 million in contingency fees through its representation of the state of Pennsylvania in the tobacco litigation, chairman Sheldon Bonovitz said the firm embarked on its strategy well before it received that money. But he did acknowledge that the tobacco litigation money gave the firm a cushion of capital. He said the firm was $3 million above its projected billing numbers during 2000. The contingency fees added $16 million on top of that to the pot. For a firm that already had more than 900 full-time equivalent lawyers at the beginning of last year, Morgan Lewis had a dramatic increase in both gross revenue and profits per partner. But the firm’s chairman, Fran Milone, disagrees with American Lawyer’s assessment of how they got there. Morgan Lewis saw its gross revenue increase by about 20 percent, which doubles the jumps the firm had in each of the previous two years. The firm’s $514.4 million number vaulted it four spots up the list and back into the top 10. Now ranked ninth, the firm rebounded after dropping to 13th from 11th the previous year. But the real big gain for the firm was in profits per partner, which rose by 39.6 percent, after two straight years of 7.9 percent increases. The firm’s $705,000 placed it 47th on the list. The increase is the second largest in the nation, behind only New York’s Kelley Drye & Warren (46.2 percent). An article in the magazine says the firm increased its partner profits by trimming the ranks of equity partners by 60 (290 to 230). In what the magazine calls a “blood-letting,” it says that number amounts to 20.7 percent of the firm’s equity partners were “kicked out or moved downstairs” while the firm’s total revenues increase by 20 percent. Milone, who was interviewed and quoted by the magazine, said The American Lawyer‘s interpretation of the facts “couldn’t be any more wrong.” He said only 24 partners were actually moved out of equity partnership, which the firm calls points partnership. “To suggest that we achieved what we did by entering fixed compensation agreements with several partners who are happy with the arrangement is just wrong,” Milone said. “It was done to make sure that the compensation system was fair, and we were paying our people for the nature of the work that they do.” He said the firm’s rise in the rankings can also be attributed to an upswing in business, disciplined business decisions, billing rate increases and longer hours worked by the firm’s lawyers. Milone said the rest of the decline in equity partnership came from retirements, attrition, which includes migrations to dot-coms, other firms and one partner who passed away. The firm also introduced its two-tier partnership track last year, promoting 38 non-partners to partner, with the majority assuming a non-equity status (which Morgan Lewis calls income or fixed compensation partners). He also pointed to the firm’s compensation for all partners, which rose by 27 percent and is not necessarily affected by the drop in equity partners. Pepper Hamilton once again clung to a spot on the list, finishing 98th after a two-year stay in the 99th spot. The firm had a 15.5 percent increase in gross revenue, which was listed at $145 million. Profits per partner increased by almost 16 percent to $365,000, good for 96th on the list. Jim Murray, the firm’s executive partner, said the firm was extremely busy on the transactional side last year and reaped the benefits of its lateral hire acquisitions from the previous year. While the economic downturn is the subject of the business pages in every newspaper, the managing partners interviewed did not think it would affect the bottom lines of their respective firms for 2001.

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