The 2017 financial results for Bilzin Sumberg Baena Price & Axelrod were down on many measures as the single-office midsize law firm came off a robust year with notable class action and antitrust earnings.
Revenue was off 3.9 percent to $77.7 million while revenue per lawyer dropped 12 percent to $842,435 year over year.
“I don’t want to give an impression that the prior year is an anomaly and we’re done,” said managing partner-elect Albert Dotson Jr. “We expect next year to be similar to prior years in which we’ve received recoveries from antitrust and class actions.”
Even with the revenue fluctuations, Dotson said the 92-attorney Miami firm generally outperforms the market on two primary benchmarks—revenue per lawyer and profit per partner.
Lined up with seven other Florida law firms that have reported their 2017 results, Bilzin Sumberg led on RPL at $842,000 and placed second behind Greenberg Traurig on PPP at $1.46 million.
Bilzin Sumberg’s total profit was down 14.7 percent to $32.1 million, and its profit margin shrunk 11.2 percent to 41.4 percent.
The distribution of profits in a down year favored nonequity partners. Total compensation to equity partners declined 14.7 percent to $32.1 million, in a year with a gain of one equity partner. In contrast, compensation to nonequity partners jumped 17.9 percent to $9.7 million for an average of about $435,000.
Average compensation for all partners fell 9.8 percent to $943,773, dipping below the $1 million mark and the 2016 figure of $1.05 million.
“We have been focused on maintaining the talent that we have developed through our summer associate program,” Dotson said. “Associates have become nonequity partners and we feel very good about our ability to retain them, and we have responded to market conditions to retain them.”
The firm added eight lawyers, for a total of 92 full-time equivalents in 2017, including the additions of one equity and one nonequity partner.
Leverage, which measures the ratio between nonequity lawyers and equity partners, jumped 18 percent to 3.2.
Some practice areas have done well. Litigation for antitrust and class actions has grown, as has the firm’s practices in international tax, private wealth, and public-private partnerships with the addition of a financing capability in a practice area founded by Dotson.
Dotson noted that 35 percent of the firm’s work has some international component, and he expects growth to continue in the same areas.
“To the extent that you’ve seen any softening in traditional bankruptcy work, we’ve seen an active restructuring and corporate finance increase,” Dotson said.
On the cost side, “we do manage our costs effectively,” he said. Bilzin Sumberg is “investing heavily in technology” and cyberthreat security. In the past two years, he said the firm rolled out a new network core and legal project management tools.
“We took some time ago a conservative approach with respect to access to sites and technology that might be fraught with threats to our system,” he said. “I want to be careful about disclosing what we’re doing because that’s the last thing you want to do.”
Dotson was elected late last year to take over in 2019 as the firm’s managing partner from John Sumberg, who is stepping down after 20 years.
Bilzin Sumberg falls below the Am Law 200 scale, which ranks law firms by revenue. The cutoff for the this year’s list is about $15 million above Bilzin’s dollar figure.