Steptoe & Johnson offices in Washington, D.C. June 12, 2015. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL.
Steptoe & Johnson offices in Washington, D.C. June 12, 2015. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL. (Diego M. Radzinschi)

A string of headline-grabbing cases didn’t have much impact on Steptoe & Johnson’s bottom line in 2016. Although the Washington, D.C.-based firm handled high-profile matters including Volkswagen’s criminal case and a President Donald Trump deposition, its gross revenue was basically flat, at $356 million in 2016.

Neither revenue per lawyer nor profits per partner budged from the year before. RPL was about $955,000 and PPP was about $940,000 last year. Net income, representing profits distributed to equity partners, fell by $8 million, to $109,500, a 7 percent difference from the prior year.

In comparison, the firm posted slight gains in both revenue per lawyer and profits per partner in 2015.


“We had steady performance, but we would have been up significantly if we had better discipline,” firm chairman Philip West said of the 2016 results.

He attributed some of the revenue stagnation to a failure of the firm to collect 2016 bills before the new year. He said collections in the first week of January this year would have boosted last year’s profit pool by 5 percent. “It is very unusual that would happen,” he said.

The firm last year began providing incentives to improve collections, including monthly bonuses for secretaries whose partners meet billing goals. Generally, the firm employs one secretary for every four or five lawyers.

Partners may have new incentives too. West said the firm will implement changes to the draw system, so if partners bill and collect more quickly each month, “it can increase their draws.” Draws at Steptoe are made twice a month. In previous years, they were paid out as a pre-set percentage of partners’ budgeted income, which increased throughout the year. In the future, partners’ draws will be determined as a percentage of firm collections for the month.


West also said major, ongoing renovations in Steptoe’s Washington home office had been a distraction for attorneys. Near the end of 2016, the Dupont Circle lobby was in the process of being gutted and the elevator bay was a construction zone.

Renovations began more than a year ago and affected lawyers floor by floor. Some lawyers moved their offices during the renovation to temporary space in Akin Gump Strauss Hauer & Feld’s building across the street.

“It is a very disruptive process to work through a renovation in place,” West said, noting the noise and other distractions. ”We’re delighted in the way this renovation is turning out, but one downside of it is the potential impact on our results.”


The firm lost the equivalent of two full-time lawyers during the year, for a total head count of 372. The equity partnership decreased by nine partners to 116. That’s because the firm cut ties with some partners, West said. Steptoe closed its Century City office, displacing six partners, and had some equity partners take senior status — which partners generally take at age 65. The firm reported that it brought in six partner-level lateral hires and promoted four to partner in 2016.

“We are very focused on our partners’ success. Sometimes the partner can be more successful elsewhere,” West said. “A big objective of mine is to change the mindset from, ‘A departure from Steptoe is a failure’ to ‘A departure from Steptoe is not necessarily a failure.’”

The Century City office opened in 2006 as a second Steptoe office in Los Angeles, with partners moving from the now-defunct Alschuler Grossman Stein & Kahan. Some of those partners had left Steptoe before last year. Another office in downtown Los Angeles, with about 17 lawyers, still exists.

West said Steptoe’s attorney productivity was slightly up last year, with lawyers each billing on average 1,513 hours a year.

“We’re a little leaner and the fact that we’re a little leaner means we’re working a little harder per lawyer,” West said. “When head count, productivity, and rates work together, the stew that results is a flat gross revenue.”

The firm raised its billing rates by less than 3 percent last year. It also increased both salaries and bonuses paid to its 140 associates, who now start at $180,000 a year.


The firm has had several high-profile matters that drove business in 2016. Most recently, partner Brigida Benitez deposed Trump in a suit between the now-president and Jose Andres, the restaurateur. Steptoe defends Andres.

Partners Reid Weingarten and Jason Weinstein were counsel to Volkswagen last year in the criminal investigation of its vehicle emissions reporting. Volkswagen will pay $2.8 billion in a guilty plea deal with the U.S. Department of Justice. Weingarten and partner Mike Miller in New York are also representing Fethullah Gulen, the Turkish national now living in Pennsylvania who has fought Turkey President Recep Tayyip Erdogan’s attempts to extradite him over claims that he incited a coup.

Partner Robert Rizzi also has an active practice vetting taxes of political appointees in the Trump administration, though the firm declined to disclose his clients’ names.


Steptoe is still thinking through its strategy for the coming years, a time when D.C.-centric firms could be in flux because of the administration’s approach to regulation and because of tougher economics for firms.

“You can come to one of two conclusions, it’s a flat market and we’re flat, and we’re holding our own. Or do we want to be faster swimmers? We’re asking those questions now,” West said. The firm has a group of partners who are discussing how better to address client needs, he added.

Steptoe laid low during a recent flurry of merger explorations between D.C. firms and firms in New York.

“We wish them well with their forays into New York,” West said. “We have considered opportunities, and when and if an opportunity that attracts us arises, we’ll consider it further.”

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