From left, Mark Silow and Mark Morris, Fox Rothschild (Handout Photo)
Revenue jumped 14 percent at Fox Rothschild in 2016, more than matching head count growth as the firm beefed up its lawyer ranks.
The firm, which ended its fiscal year March 31, increased gross revenue to $416.3 million. Profits per equity partner were relatively flat at $664,000, showing an increase of 0.8 percent from 2015.
“In the context of the market, it was a very successful year,” chairman Mark Silow said.
(The firm’s final financial results don’t necessarily match estimates reported in the May issue of Legal affiliate The American Lawyer, which collects its data before Fox Rothschild’s year-end.)
Fox Rothschild increased its total head count from 615 in 2015 to 697 in 2016, growing by 13 percent.
That included the integration of lawyers from Minneapolis-based Oppenheimer Wolff & Donnelly, who joined as a result of Fox Rothschild’s largest-ever merger. The deal was announced in December 2015, but firm leaders said it continued to have an effect on the 2016 numbers. The firm also added a group of six entertainment lawyers from Minneapolis-based Lommen Abdo in January.
Other hires included a three-lawyer IP group from Kenyon & Kenyon, a six-lawyer team from Dentons in New York and two longtime partners from Blank Rome, who added to Fox Rothschild’s white-collar and tax controversy practices.
Silow said integrating the Oppenheimer lawyers has gone “exceedingly well.” It was a good year across practice areas, he said, with especially strong performance in the corporate and real estate practices.
The bankruptcy practice was less successful, he acknowledged, in line with industrywide trends. Intellectual property “held its own,” but Silow noted that the practice has continued to move away from patent prosecution work.
The firm came within a tenth of a percent of its budget, Silow said. And thanks to the head count growth, the firm experienced “economies of scale,” leading to decreases in expenses per lawyer, firmwide managing partner Mark Morris said.
However, the firm saw a “meaningful impact” on costs from increasing associate salaries to a high of $160,000 for first-years in certain markets, $150,000 in Philadelphia and $125,000 in Pittsburgh. The firm did not immediately hop on the associate-raise bandwagon over the summer, but eventually raised its scale, which previously had first-year associates at $110,000 to $145,000.
“We looked at where our competitors were,” Silow said. “We also were considerate of what our clients could bear.”
Adapting to Change
If 2016 was a year of integrating new lawyers, 2017 will be a year of adjusting to new leadership at Fox Rothschild. Morris took the role of firmwide managing partner April 1, as Silow transitions into chairmanship. Longtime co-chairs Abraham Reich and Phillip Griffin are now chairmen emeritus. The firm also named six new office managing partners, effective April 1.
In the coming year, Morris said, the firm is “well positioned” with “significant fee producers” across the country. He said he hopes demand for services will improve after large-firm leaders throughout Pennsylvania noticed a softness in demand in 2016. Morris and Silow said they noticed the dip especially in the last two to three months of the year.
So far in 2017, Morris said requests for proposals are flowing, and the firm can offer an even greater breadth of expertise than it could previously.
“Every couple of years there seems to be a real income spurt. … The revenue goes more to the bottom line when you’re not opening new offices” and otherwise expanding, Silow said. “I think we’re due for one of those income spurts.”
As for growth in 2017, Morris said the firm will continue to be opportunistic, but is more focused on building its brand in locations where it recently expanded, including Chicago, Denver, Minneapolis and Miami.
“We’re an attractive place for productive partners from national and international firms who have middle-market practices,” Silow said. “We’re very comfortable in our own skin with who we are.”
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