Jenner & Block’s Washington, D.C. offices. (Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL)
Jenner & Block’s financial performance leveled off in 2016 as gross revenue dipped and head count spiked following two years of strong financial growth.
Gross revenue fell 1.6 percent from a year ago, to $457.5 million. With a nearly 12 percent increase in head count, revenue per lawyer fell 11.7 percent, to $940,000. Managing partner Terrence Truax said much of the head count growth was attributable to a decision to hire nonpartner track lawyers who handle discovery and other litigation work that some firms outsource.
That growth didn’t much affect profits per partner, which rose 1.5 percent, to $1.745 million, partly due to a 4 percent reduction in its equity partner ranks. Jenner & Block also saw a dramatic uptick last year in its nonequity partner ranks, which rose 27.4 percent from a year ago, to 102 lawyers. The firm, well-known for its commitment to pro bono work, has 109 equity partners.
The financial figures come on the heels of one of the strongest periods of growth in the Am Law 100. After seeing profits plunge in 2013, Jenner & Block bounced back the following year, with 2015 proving to be equally successful, as the firm saw gross revenue rise 14 percent. During that timeframe, Jenner & Block’s gross revenue increased 30 percent, revenue per lawyer by 29 percent and partner profits by 39 percent. In 2016, the firm was named to The American Lawyer’s A-List.
“We view 2016 as having been a very solid financial year for us,” said Truax, who took the firm’s leadership reins in May 2014. “We’re frankly pleased with the results.”
Commenting on the drop in revenue per lawyer, Truax said the decision to hire what he called a “SWAT team” of lawyers to handle discovery work at a lower cost was a tradeoff the firm was willing to make.
“The driver was not so much economic as it was about quality,” said Truax, who bikes to work even in the harsh Chicago winter. “We felt that for a firm of our stature, it was imperative that we have what I would call a SWAT team that is Jenner-trained, Jenner-stamped [and] Jenner & Block quality.”
The growth in nonequity partners came mostly from the firm promoting 18 associates to income partner. Truax said the number of nonequity partners was “large,” but that “within our system, we’re easily able to manage that.”
Jenner & Block also had a busy year of lateral hiring, bringing in 16 partners, while nine departed. The lateral hires included a number of former general counsels of longtime clients, such as partner George Pain, who joined the firm in January from Olin Corp.
Other partners at Jenner & Block with general counsel or chief legal officer experience include Rebekah Goodheart, a former legal chief at the U.S. Federal Communications Commission who joined the firm last year; Robert Osborne, who spent more than three years heading the legal department at client General Motors Co., and Richard Ziegler, a former general counsel at 3M Corp. (Ziegler stepped down a year ago as managing partner of the firm’s New York office.)
Jenner & Block is also expanding in London, its first international office that opened in 2015, hiring last month a former White & Case management committee member in litigator Jason Yardley. The firm’s London office now has 14 lawyers, including six partners, and is already profitable, Truax said.
Earlier this year, longtime Jenner & Block appellate litigation partner Paul Smith left the firm and Big Law to teach at the Georgetown University Law Center and advocate for voting rights. That came after Donald Verrilli Jr., a former Jenner & Block partner and outgoing U.S. solicitor general, chose to start an office in Washington, D.C., for Munger, Tolles & Olson rather than return to the firm. Last month three partners—Michael Brody, Matthew Hellman and Jessica Ring Amunson—were elevated at Jenner & Block to lead the firm’s appellate practice.
While Truax said the firm was disappointed to not have Verrilli return and it will miss Smith, a “beloved partner,” he is excited about the crop of young talent in Jenner & Block’s Supreme Court practice that will now have a chance to shine at the coveted podium before the justices. Those lawyers will have a busy year ahead of them, with partner Adam Unikowsky having three arguments on the docket for March and April. Amunson and Hellman also have arguments scheduled for the fall, Truax said.
“I’m a big believer that we have talent. We have spent decades recruiting talent. Recruit the best has been our motto,” Truax said. “And Paul Smith was part of that effort. Don Verrilli was part of that effort. And that talent that is now generationally coming into their own has the ability to deliver.”
Truax added that the evidence is already showing up on dockets.
“Stay tuned,” he said. “Write a story two years from now, and you’ll be very impressed.”