Haynes and Boone burst through significant financial barriers in 2018 as the firm’s gross revenue bested the $400 million mark, profits per equity partner (PEP) topped $1 million, and revenue per lawyer (RPL) shot past the no-longer-elusive $750,000 level.
Timothy Powers, the Dallas-based firm’s managing partner, said the record year reflects an effort across the firm of “just staying very disciplined in what we are doing.”
Gross revenue was $408.2 million in 2018, up 2.7 percent compared with $397.5 million in 2017. Net income was $131.5 million, a 3.3 percent improvement from $127.2 million the year before.
PEP came in at $1,002,000, up 4.7 percent from $957,000 the year before. And RPL was $760,000, a 4.1 percent increase from $730,000 in 2017. Powers said the firm had been working for the last three years toward passing the $750,000 RPL mark.
“It was a great year from our perspective. We thought we had a lot of great accomplishments. Productivity and demand did increase across the board,” Powers said.
He pointed to a number of strong practices in 2018 including corporate, M&A, energy, capital funds, finance and real estate. Litigation and appeals picked up in Texas, and lawyers in London had some great arbitration and litigation outcomes, Powers said.
The firm shrunk slightly in 2018, with 537 lawyers on a full-time equivalent basis, down 1.5 percent from 545 in 2017. It had 131 equity partners, down 1.5 percent, or two partners. But the firm had 106 nonequity partners, up 4.9 percent, or five lawyers, from the prior year.
Powers said Haynes and Boone in 2018 focused its lateral hiring on existing strengths in energy, financial services—which also includes real estate and restructuring—technology and private equity, and targeted markets in Houston, London and New York.
The firm is also opportunistically looking at growth in the health care and life sciences industry, and has been successful in hiring lateral partners with that focus in Texas, New York and California, he said. Geographically, he said, the firm remains focused on its home base in Dallas, while also growing on the East Coast and the West Coast to solidify its recognition as a national firm.
“We’ve done all of that while still increasing all of our revenue numbers, and even as a smaller firm, made significant investments in technology this year—and more coming,” he said.
Also on the expense side, Powers said the associate salary increase that took effect midyear cost the firm about $4 million. He said associates want fulfilling work and a great work environment, but “you have to provide the money to remain competitive.”
Haynes and Boone has 16 offices, but Powers said the firm will soon announce the opening of an office in Charlotte, North Carolina, to serve two of the firm’s top 10 clients—Bank of America and Wells Fargo. That location has been on the firm’s radar screen for several years, he said.
Powers said 2019 hasn’t started as strongly as the firm would like on the demand side, but collections did very well in January, as revenue the firm had expected to receive in 2018 came in after Jan. 1. He said demand may have slipped in early 2019 because of the impact of the federal government shutdown and trade wars.
But Powers is positive about what’s ahead.
“Everybody is still talking about a strong second half of the year,” he said. “It’s a little bit of a wait-and-see, but people are still very upbeat.”
He said the firm’s practice balance is intentionally about 70 percent business and 30 percent litigation and controversy work.
“That’s been great while the business cycle is up. We are looking at our litigation and restructuring practices picking up,” he said.