While the pace of the nation’s economic growth remains in the low single digits as the country slowly recovers from the Great Recession, Alston & Bird in the past two years has boosted its revenue and net income by nearly 20 percent.
In 2012, Alston’s revenue rose, although the law firm’s rate of revenue growth was not as robust as in 2011. The firm reported revenue of $686 million in 2012—up a healthy 6.4 percent from 2011—and a net income of $245.5 million, up 7 percent.
In 2011, by comparison, revenue rose 12.9 percent—double 2012′s growth rate—while net income rose 11.1 percent.
"We’re pleased" with the 2012 numbers, said Alston managing partner Richard Hays, particularly when "we keep reading that demand [for legal services] is fairly flat."
"It was a good year," he said. "We’re told [our numbers are] materially ahead of our peer competitors."
Revenue per lawyer rose in 2012 from $800,000 to $850,000—a 6.3 percent increase. Profit per partner increased 14.3 percent, from $1.5 million to $1.715 million, breaking the $1 million mark for the third year in a row. Average compensation for equity and non-equity partners combined jumped 7.9 percent, from $890,000 to $960,000.
Still, the growth rate in compensation was not as robust as in 2011, when profit per partner increased a whopping 24 percent.
Hays explained that Alston’s strategy has spurred growth despite an economy that is recovering in fits and starts.
"If you look at it, the demand over the last four or five years is flat," he said. "Rate increases drive revenue up a little, 3 to 4 percent. But in a flat market with no increasing demand … you have to say, ‘OK, where are there going to be new areas?’ How can we position ourselves in a way that is realistic?"
The firm, he said, has continued to develop and expand practices "where we see the greatest client need and client demand. So far, we’ve done a pretty good job of anticipating that demand."
By funneling teams of attorneys into practice areas where the firm has seen a spike in demand, Alston has capitalized on the increased need for attorneys in the financial sector following the collapse of the housing market.
"In 2012, we did see a little bit of a spike in finance and banking," Hays said.
Alston litigators have signed on to defend a host of former bank executives and board members whose banks collapsed and who have been sued for damages by the Federal Deposit Insurance Corp. They include officers of the former First National Bank of Georgia, Synovus Financial Corp., Florida Community Bank, Omni National Bank, R-G Premier Bank in Puerto Rico, Freedom Bank of Georgia, and Community Bank & Trust in Gainesville.
Alston lawyers also have represented JPMorgan Chase in litigation stemming from its credit card debt collection efforts. Alston also represented SunTrust in New York multi-bank litigation associated with fees paid by merchants when customers used Visa and Mastercard credit cards that resulted in a $7.25 billion class action settlement last November. In another national banking case, Alston represented international consulting firm Navigant during the independent review associated with foreclosure ‘robo-signing’. Navigant had audited several of the banks that were under review.
The firm also has moved into the growing international electronic payments market, which rests on the expanding use of credit and debit cards in lieu of checks or cash. "We are pretty bullish about that," Hays said. "I think we will look back and tell our kids one day, ‘We used to have this thing called cash.’"
Alston also is beefing up its intellectual property practice by expanding into the data privacy arena, he said, including prevention and response to data breaches. "We have seen that as an area where there is more demand."
The firm’s litigation practice also remains strong, Hays said. In 2012, the firm represented Dell Computers in antitrust claims across the country against manufacturers of liquid crystal display screens who were prosecuted by the U.S. Justice Department in a global price-fixing scheme, he said. Alston also is assisting Dell as the computer firm goes private, he said.
In 2012, Alston continued its defense of Toyota in dozens of suits stemming from allegations that Toyota accelerators were malfunctioning. In December, Toyota agreed to pay $1.3 billion to settle dozens of product liability suits. But a number of personal injury suits associated with the allegations remain in play.
Fewer than half the firm’s total number of attorneys remain in Atlanta, Alston’s birthplace, although Hays said Atlanta still maintains the largest contingent of the firm’s attorneys.
Alston’s total number of attorneys remained virtually unchanged, dropping from 806 in 2011 to 805 in 2012. So did the firm’s total number of partners, which rose slightly from 352 to 356.
But the total number of equity partners dropped 6.5 percent from 153 in 2011 to 143 in 2012 while the number of non-equity partners increased 7 percent, from 199 to 213.
‘We’ve had a little churn," Hays acknowledged.
Hays said that the firm has continued to expand its footprint in California, Texas, Washington and New York. "That broader reach," he said, "has driven a good bit of our growth over the last several years."
This report is part of the Daily Report’s early coverage of the 2012 financial results of local firms as part of the Am Law 100 and Second Hundred reports. Financial rankings of local firms will be published on April 1. Full results for the Am Law 100 will be published in The American Lawyer and online in May. The Am Law Second Hundred will be published in June.