With modest increases in its financial metrics in 2017, Duane Morris pulled through with a record year for revenue, profits per partner and revenue per lawyer.
The firm grew revenue 2.6 percent in 2017, reaching $466 million. Revenue per lawyer was up 1.1 percent, to $706,000.
The firm grew profitability at a similar pace. Profits per equity partner increased by 2.7 percent, to $964,000 and net income was up 2.7 percent, to $117.1 million.
The firm saw total lawyer head count increase by 1.4 percent, to 660 lawyers, while the size of the equity partnership was unchanged at 122 partners.
“We were very happy with 2017,” said Matthew Taylor, who took over as Duane Morris’ chairman officially at the start of 2018. “A lot of the gross revenue [gains] you see from firms this year were with head count … we did it with some very good activity on the billable side, and in a year when we probably had one of our lowest amounts on contingency fee.”
Taylor said Duane Morris met and exceeded its budget for 2017 and prepaid expenses for 2018. While some contingency fees came in later than expected, he said, those fees have already had an impact on 2018, and will likely create a boost in this year’s revenue.
The first quarter of 2017 was “sluggish” across the firm, Taylor said, but activity picked up in the late second quarter through fourth quarter on both the transactional and litigation fronts. Intellectual property in particular was “incredibly busy,” he said.
The firm was able to implement “modest” rate increases, Taylor said. But it has also been responsive to client requests for additional flexibility.
“We continue to maintain a very nimble approach on rates to meet our clients’ needs, because clients are asking us to be creative on fees, or alternative fees, or approaches on billing that help them and their budgets,” he said.
That also shows through in the firm’s realization rate, Taylor said, which was “well over 90 percent.” Practice group heads have been placing an increased emphasis on working efficiently on matters, he said.
“What we have really preached and our lawyers are doing a much better job of is being project managers on their files, whether it’s transactional or in litigation,” Taylor said.
While Duane Morris saw little change in its overall head count average in 2017, the firm made some notable additions later in the year, adding an office in Austin, Texas, as well as some lawyers in San Francisco late in the year from now-shuttered Sedgwick.
Taylor noted that the firm made a number of lateral hires early this year, including another partner duo from Sedgwick, three lawyers from insurance litigation boutique Vocke Law Group and white-collar litigator Christopher Casey from Hogan Lovells.
“We’ve had a real growth spurt,” Taylor said, adding the growth will likely continue, especially in the transactional practices. He said the firm is bullish about adding lawyers in New York, Texas, California and even Philadelphia, which, Taylor said, has the potential to become a center for the technology industry.
The firm will also look to continue expanding its presence in Asia, but “we’re going to be very, very careful,” Taylor said. Most recently, the firm opened an office in Taiwan in 2016.
Taylor said he’s not opposed to mergers as Duane Morris grows, but he would evaluate them case by case.
“We know how difficult they are to do for lots of reasons, mostly conflicts,” he said of the potential to combine with another firm. “I wouldn’t rule out any size big or small. Obviously the bigger the size, the level of difficulty gets higher.”