Florida firm Shutts & Bowen saw both its gross revenue and its profits per equity partner grow nearly 11 percent in 2018 amid the addition of 42 attorneys to its ranks.
While revenue per lawyer grew only 5.1 percent—from $606,000 per lawyer to $637,000—profits per equity partner jumped 10.5 percent, from $790,000 to $873,000. And gross revenue increased 10.6 percent, from $156 million to $172 million.
Bowman Brown, chairman of the firm’s executive committee, attributes the accelerated profit growth to low marginal costs and star hires such as IP attorney Steven Greenberg.
“[Greenberg] has overseen 5,000 patent applications,” said Brown. “One thing we do well is control costs,” adding that the firm did not have an increase in marginal costs for its new hires, as the firm already had the space and infrastructure needed for the dozens of new attorneys.
Overall, 2018 was a strong year for law firms. Law firm survey data collected by Wells Fargo reported average revenue growth of 5.9 percent and average net income growth of 7.6 percent—the best year since the Great Recession.
Shutts & Bowen has climbed up the AmLaw200 ladder for five consecutive years, from No. 174 in 2014 to No. 162 in 2018.
In 2013, the firm had 230 attorneys, according to ALM’s Legal Compass. Today, the total head count stands at 270. Total revenue has also followed a similar growth pattern: from $128 million per year in 2014 to $172 million in 2018.
Over that same period, the firm added three more offices in Sarasota, Jacksonville and Tallahassee. Brown pointed to Tallahassee as a particular bright spot, as the office picked up former deputy general counsel to Gov. Rick Scott, Benjamin Gibson, and senior deputy solicitor general to Pam Bondi, Rachel Nordby.
Brown expects the firm to hire at a similar clip in 2019, though he “doesn’t have a numerical target.” The firm is targeting laterals in specialty practices including IP, financial services and high-end commercial real estate.
With the threat of a recession looming, Shutts’ policy of paying down all its outstanding end-of-year debt has put it in a good position, Brown said. While the firm raised billing rates around 3 percent, Shutts’ rates are still low compared its peers, he said, giving it a competitive advantage and keeping its realization rate higher.
“We bill less but collect more,” he said.