(Photo: Fish & Richardson)
A significant increase in contingency fee income helped Fish & Richardson continue its growth in 2016, with the firm posting solid gains in both revenue and profit.
The Boston-based firm didn’t quite hit the heights of 2015, when a huge IP litigation caseload saw it achieve double-digit growth across all metrics. But Fish CEO Peter Devlin told The American Lawyer that it was still a “really strong year across the board,” with contingency fees leaping from $11.8 million to $31.4 million.
Fish’s gross revenue increased 3.2 percent in the last fiscal year, to $407.5 million, while the 350-lawyer firm maintained its record revenue per lawyer of $1.17 million, which remained flat in 2016. The firm’s profit margin was also unchanged, at 40 percent.
A slight reduction in equity partner numbers meant that a 2.8 percent increase in net income, to $163 million, was compounded on a per partner basis, with profit per equity partner rising 6.7 percent, to $1.59 million, the second-highest PPP in the firm’s 138-year history and 25 percent above its budget forecast, according to Devlin. (Fish achieved its highest-ever PPP in 2010, at $1.6 million.)
Devlin said that 2016 was another standout year for Fish’s giant IP litigation practice, which accounts for approximately two-thirds of the firm’s total revenue. The 200-lawyer department completed 11 patent trials in federal district courts, argued 13 appeals and appeared more than 150 times before the U.S. Patent Trial and Appeal Board, which Devlin says was more than any other law firm. Fish also filed about 5,800 patent applications in 2016, Devlin said, a 10 percent increase over the previous year.
The firm’s trademark practice was also busy. Fish filed 550 U.S. trademark applications in 2016, about the same number as in 2015. And Devlin said the firm’s International Trade Commission team was involved in about 20 percent of all cases at the ITC last year.
Devlin said that the firm’s costs were reduced by “roughly $3 million” in 2016 thanks to its new business support center in Minneapolis, which launched in 2015. The investment costs associated with the administrative hub were “substantially lower than we had planned,” Devlin added, and the firm expects that the initiative will now deliver annual cost savings of $3 million per year.
The results mark the second consecutive year of revenue growth for Fish, although its total revenue still lags almost $10 million behind its 2009 peak of $417 million. The firm’s revenue has in recent years proved somewhat erratic, in fact, falling in 2010 and 2011, recovering strongly in 2012, declining in 2013 and 2014, before rebounding once again in 2015 and 2016. Devlin said that this is a consequence of the unpredictable nature of litigation and the firm’s relatively sizable contingency business, which contributes up to 10 percent of firmwide revenue.
Devlin is “very confident” that Fish will continue to grow in 2017, however. The firm has once again budgeted “conservatively,” but is “off to a very strong start” in the first two months of the year, with a number of IP trials already completed and more ongoing, Devlin said.