Gross revenue and profits both declined at Drinker Biddle & Reath in 2018, as the firm weathered the departures of two significant groups. But chairman Andrew Kassner still called it a “solid” year.
The firm saw gross revenue decline by 2.6 percent, to $449.7 million, while revenue per lawyer (RPL) still grew, as the firm saw head count decrease. RPL reached $848,000, marking an increase of 3.2 percent from 2017.
The firm’s net income declined 8 percent, to $166.4 million, and profits per equity partner (PEP) were down 1.1 percent as a result, to $916,000.
Kassner said Drinker Biddle had three straight record-breaking years leading up to 2018 and held onto much of those gains. Despite the PEP dip, he said, share value for partner compensation was up in 2018.
The firm’s total head count declined by 5.7 percent to 530 lawyers. Equity partner head count was down 6.7 percent to 182 partners.
Factoring into those numbers were two group defections. A commercial litigation team, including lawyers with a focus on life insurance and annuities, jumped to Cozen O’Connor in April of last year. And Akin Gump Strauss Hauer & Feld took five class action partners with a national practice.
“To some extent, it’s a little bit of the nature of the world now,” Kassner said. He said the firm’s remaining litigation matters “haven’t missed a beat” following the departures. And, he noted, Drinker Biddle has also made 36 lateral hires from January 2018 to this month.
That included a large group of lawyers from Carlton Fields’ Washington, D.C., and Hartford, Connecticut, offices who joined Drinker Biddle in early March, led by insurance and financial institutions litigator James Jorden.
The firm’s nonequity partner tier grew by four lawyers in 2018, to a total of 66. Drinker Biddle promoted nine new partners at the beginning of fiscal 2019, and Kassner noted that the group includes five women and an African American man.
“This was a big year for diversity” at Drinker Biddle, Kassner said. He also noted that longtime diversity and inclusion committee head Maria Lewis was promoted to chief diversity officer in November. The firm also made some changes to its top leadership committees, which resulted in an even split between men and women on those committees.
“I think the metrics are beginning to show that [diversity has] become part of the culture,” Kassner said.
Kassner said it was a “solid” year for Drinker Biddle’s corporate, health care, real estate, Employee Retirement Income Security Act, government and regulatory practices. It was a very busy year for customs and trade lawyers at the firm too, he said.
The restructuring practice also had an uptick after a long period of decreased restructuring activity industrywide, Kassner said. Asked about what that may indicate about the greater economy, Kassner said the firm will continue to invest in areas that are more resistant to economic cycles.
That doesn’t just mean growing counter-cyclical practices. Kassner said Drinker Biddle will continue to invest in the health care practice—which recently brought in an executive director to lead it—and make sure the real estate practice is diversified.
As for geographic expansion, Kassner said Drinker Biddle is “positioned well if a new domestic market presented itself to us this year.” He said the firm is still interested in the Nashville market, in particular.