Revenue at Chicago-based Am Law 100 firm Jenner & Block slipped in 2018 for the third straight year, but the firm’s decreasing head count helped bolster financial metrics including revenue per lawyer and profits per equity partner.
Jenner’s revenue last year of $441.3 million was down 1.7 percent from the year prior, according to preliminary data from ALM. The firm also saw its head count drop 8.1 percent last year to 467 lawyers. That dynamic helped revenue per lawyer rise 6.9 percent to $945,000.
The firm increased its profits per equity partner by 6.3 percent to $1.5 million. That rise was helped by a significant drop in the firm’s number of nonequity partners and the total amount of compensation they received in 2018.
The firm’s nonequity partner count fell by 17 lawyers to 100 partners, a nearly 15 percent decline. The firm’s equity partner ranks shrank by 1.8 percent, or 2 partners, to 109 lawyers. Nonequity partners in 2018 were paid, as a group, about $16.6 million less than in 2017. Meanwhile, the firm’s equity partners increased their profit pool by about $8.2 million from the prior year.
The head count declines were a reversal from recent years at Jenner, known for its litigation chops. Jenner’s roster of lawyers had grown by more than a quarter from 2014 to 2017. But that head count growth had not been accompanied with corresponding revenue increases.
Terrence Truax, the firm’s managing partner, said the head count declines last year were not the result of a focused pruning of any particular practice groups. Still, he said the firm’s results in 2018 reflected “very strong internal management that we have exercised.”
“We have worked very diligently to manage our firm in order to make sure we have the right scale and the right lineup to deliver this very high-end set of services that we want to be delivering to our clients,” Truax said in an interview. “That’s what we’ve done, and we’re continuing to engage in that.”
Truax said the firm had maintained its long-term commitment to pro bono work over the past year, with 100 percent of the firm’s lawyers spending 20 hours or more on free legal representation. The firm has topped The American Lawyer’s pro bono rankings nine times, including last year.
Jenner this year named Craig Martin as the firm’s new chairman. That role had been left vacant when Anton “Tony” Valukas stepped down in April 2017. Martin had already served as the head of the firm’s litigation practice, which accounts for roughly two-thirds of Jenner’s lawyers.
Jenner’s financial fortunes have taken a number of turns over the past five years.
Following a weak 2013 that saw revenue fall nearly 8 percent, the firm saw back-to-back years of 14 percent revenue growth in 2014 and 2015. In 2015 in particular, the firm’s top-line figure reached a record high of $465 million and PEP soared to $1.72 million. Those years’ financials were buoyed by big-ticket investigations including those over ignition failures at General Motor Corp. and independent monitor assignments for Citigroup Inc. and Credit Suisse AG.
Since that 2015 high, Jenner’s revenue has dipped 5 percent and its PEP has fallen 14 percent. But in a longer time period, since the 2013 low, the firm’s revenue and PEP are both up nearly 25 percent. Truax said he was pleased with the firm’s longer-term financial growth, but said the firm aspired to do better more recently.
“Our goal is to deliver this high-end product to our client base, and we think we are doing that and think we can continue to do better at it, frankly,” Truax said.