After riding high while the economy tanked, Jackson Lewis may be in for a period of slower growth as the nation’s financial recovery begins to gain steam.
The labor and employment specialty firm saw its gross revenue increase at least 10 percent a year from 2008 through 2011 following the onset of the economic crisis, as waves of layoffs and other cutbacks by employers fueled a rise in employment law litigation. Since that run started, Jackson Lewis has opened 20 new offices and increased its overall head count nearly 75 percent, from 395 lawyers in 2007 to 690 today.
But with the U.S. economy improving steadily last year, the firm’s soaring arc has begun to trail off just a bit.
Jackson Lewis’s gross revenues increased by 7.8 percent in 2012 to $352 million, according to The American Lawyer‘s reporting. That’s on the heels of a 10.5 percent gain in 2011 and a 15 percent jump in 2010, when the firm’s financial performance catapulted it into The Am Law 100 for the first time. (Jackson Lewis saw its greatest year-to-year improvement in 2008, when its gross revenues climbed 20 percent.)
The firm’s revenue per lawyer essentially held steady last year, increasing by 1 percent to $510,000. Profits per partner also rose slightly, inching up 1.7 percent to reach $605,000. The firm’s overall head count, meanwhile, rose 7.1 percent after increasing 4.9 percent in 2011.
Vincent Cino, who succeeded Patrick Vaccaro as the firm’s chair last year, says multiple factors helped slow Jackson Lewis’s growth in 2012. "One is, I think the economy is improving, so there might not be the same level of employment litigation that we saw in the prior years," he says.
Cino also points to Hurricane Sandy, which caused a great deal of destruction along the Northeast coast last fall, as having an impact on the firm’s financial performance. According to Cino, several Jackson Lewis offices were forced to close temporarily due to the havoc wreaked by the storm: "I know our New York City office, our Morristown [New Jersey] office, the White Plains office, [and] Long Island all were out for a long period of time—some up to two weeks where we were basically out of our offices."
Sandy and its aftermath made it hard to communicate with clients, some of whom were also hit hard, and delayed collections, says Cino. He also believes it’s possible that less lawsuits were filed in areas affected by the storm, which meant less work for the firm.
Then-chairman Vaccaro told The Am Law Daily last year that Jackson Lewis was "certainly not slowing down" as the economy improved. He suggested that an increase in labor union activity sparked by the improving economy would likely mean more work representing employers. Cino agrees with his predecessor and adds that Congress has also expanded employee rights in recent years, opening the door for more claims to be filed against employers. Still, Cino says he would be happy to see Jackson Lewis’s gross revenue hold steady at roughly 7.8 percent in the coming years, though he acknowledges that could be hard to achieve consistently because of what he says is "a much keener competitive environment than say 10, 20 years ago." In short, he says, "I’d love the [10 or 11] percent that we had in the past, but 7 percent would be great."
While Jackson Lewis did not open any new offices last year, the firm has already launched three new locations since the new year began: one in Grand Rapids, Michigan; another in San Juan, Puerto Rico; and a third in Tampa that the firm announced earlier this week. Cino says the firm chose Tampa to be the site of its 52nd, and newest, office because it was eager to add a team of former Ogletree, Deakins, Nash, Smoak & Stewart attorneys led by Barnett Brooks, who will serve as that office’s managing partner.
Cino predicts that Jackson Lewis will open "two or three" additional offices in 2013, but he is not yet sure where. "Our growth is a function of the people that we’re looking at, as opposed to a specific city," he says.
Regardless of which markets the firm decides to enter, Cino sees 2013 shaping up as a good year. "The first six weeks of 2013 have started out very strong, and I’m hopeful that it will continue," he says. "You never know, but it’s a good sign so far."
This report is part of The Am Law Daily‘s early coverage of 2012 financial results of The Am Law 100/200. Click here to see an interactive chart comparing this firm’s 2012 finances to other Am Law 100 and Second Hundred firms whose finances The Am Law Daily and its sibling publications have reported on to date. Final rankings and full results for The Am Law 100 will be published in The American Lawyer’s May 2013 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.