Schiff Hardin’s revenue fell for the third straight year in 2018, but firm managing partner Marci Eisenstein said she was pleased with a boost last year in profits per equity partner and has “optimism” about the firm’s direction.
The Chicago-based firm brought in just shy of $193 million in revenue last year, down 3.5 percent, according to preliminary ALM data. Profits per equity partner (PEP) crept above the $1 million, surging 13 percent from the prior year, and revenue per lawyer rose nearly 2 percent to $801,000.
The firm’s head count fell 5 percent to 241 lawyers, and its 60-member equity partnership in 2018 was 8 percent smaller from the year prior.
The firm’s PEP was buoyed by a slight increase in its profit margin, a reduction in the firm’s equity partner ranks and a decline in the expense the firm pays as compensation to nonequity partners. The firm elected four equity partners and 10 nonequity partners last year, Eisenstein said.
“We are very happy with the performance,” Eisenstein said in an interview at the firm’s Willis Tower headquarters in Chicago. “We are carrying forward on our strategy, which is investing in our strong practices and making them a priority.”
Eisenstein said those practices included areas that larger firms have started to shy away from, such as trusts and estates. Other practices that she said the firm was focused on included middle market transactions, energy, environmental work, construction project planning, intellectual property, litigation and internal investigations.
On the investigations front, the firm last year added Maggie Hickey, the former Illinois Executive Inspector General. Hickey has won a number of high-profile representations in Illinois, including as independent monitor of the Chicago Police Department related to a consent decree it entered into in 2019.
Hickey was also appointed by Chicago’s Board of Education to lead an independent review of the school district’s policies following Chicago Tribune reports of CPS employees sexually abusing students. Hickey also was picked in 2018 to investigate sexual harassment allegations within the office of Illinois House Speaker Michael Madigan.
Eisenstein said Schiff Hardin wanted to find more talented lawyers like Hickey who are attracted to what she called the firm’s “growingly unique” 240-plus lawyer platform. Partners who might fit that bill, she said, are often at larger firms that are no longer emphasizing a particular practice group.
The firm’s trusts and estates group, for example, has hired former partners from Winston & Strawn and Sidley Austin over the past two years.
“We’ve brought over partners from competitors like Winston and Sidley who are not as interested in those practices,” Eisenstein said. “For us, they’re marquee practices.”
The firm’s revenue declines last year were more moderate than they have been in recent years.
In 2017, revenue fell nearly 10 percent in a year that saw the firm shutter its Dallas, Texas, office. The bulk of those lawyers decamped for Dorsey & Whitney. In 2016, more than 20 partners left Schiff Hardin, including its former managing partner, to form a breakaway firm in Chicago: Riley Safer Holmes & Cancila. That year, revenue fell about 9 percent, factoring out a roughly $32 million contingency fee Schiff Hardin had won in 2015. Keeping that windfall out of the analysis, the firm’s revenue has now fallen roughly 21 percent since 2015.
Asked about her goals for 2019, Eisenstein said, “We are not as focused on revenue. We are focused on profitability, and we are focusing on our strengths and building them further. I think we are very well-poised for growth and we are looking at bringing in more laterals.”