As the bar for inclusion in the Am Law 100 rises ever higher, holding steady in the rankings can take some persistence. And for firms whose revenue places them near the bottom of the rankings, failure to keep pace can mean slipping off the list altogether.
Take Steptoe & Johnson LLP, which ranked 96th for the second year in a row in the 2019 Am Law 100 rankings released this week. The firm held its position after dropping 21 places in the rankings over the last decade.
Steptoe’s revenue grew 3.7 percent to $382.4 million last year, but its net income dipped 0.9 percent to $112.7 million. The firm’s declining head count—total lawyers dropped a net 4.8 percent and the partnership contracted 5 percent—boosted revenue per lawyer and partner profits, however. Revenue per lawyer rose nearly 9 percent to $1.061 million, and profits per equity partner ticked up 5 percent to $1.025 million.
“We have sort of made a conscious decision to focus on core competencies, to focus on where we’re strong, and you’ve noted our head count numbers have declined, and we’re good with that,” said Phil West, Steptoe’s chair.
“We’re not pursuing growth for growth’s sake; we’re pursuing strength,” West continued. “And we think what our clients want from us is not the greatest number of lawyers but the strongest lawyers, and that’s what we’re presenting to them, and that’s being returned to us in our results, so we’re pleased about that.”
West identified Steptoe’s five core competencies as litigation, IP litigation, criminal defense and civil and criminal investigations, international regulatory and compliance, and the firm’s suite of government-facing regulatory practices.
Among notable matters driving revenue growth last year, he cited the firm’s work as special tax counsel to Disney and the Disney-Fox transaction, IP litigation and white-collar work for Huawei, lobbying and congressional hearing preparation for Facebook’s Mark Zuckerberg, and a win before the International Trade Commission on behalf of a coalition of customers of PET resin, a major commercial plastic.
While Steptoe’s partnership lost a net eight partners, West said the firm welcomed 33 new partners last year through lateral hires and promotions. Among the new hires are a seven-lawyer commercial litigation group in Chicago and San Francisco, led by Stephanie Sheridan, now managing partner of Steptoe’s San Francisco office; Darlene Alt, partner in Chicago; and Anthony Anscombe, partner in both Chicago and San Francisco.
In D.C., Steptoe added George Callas, previously senior tax counsel to former U.S. House Speaker Paul Ryan, R-Wisconsin, and Gary Goldsholle, former deputy director and senior adviser of the U.S. Securities and Exchange Commission.
“If you’re looking for the highest profit per partner firm, you might look at some other firms. But, if you’re looking to see where the highest quality in our core competencies is with a culture of the sort that we maintain, I always say Steptoe is the best of all worlds,” West said. “It’s almost endemic in the profession that there’s a degree of dissatisfaction, and I like to say we have less of that.”
As evident from a recent visit to Steptoe’s D.C. offices, the firm also prizes its artwork collection. The work comes from five continents and includes pieces from well-known artists such as Martha Boto and Andy Warhol. One entrance to Steptoe’s building also has two multistory vertical walls of grass growing horizontally. Its purpose, the firm said, is artistic.
Steptoe moved into its D.C. office in 1984 and reopened it last year following major renovations. Located in the DuPont Circle neighborhood in D.C., Steptoe has not opted to follow in the footsteps of its counterparts moving to Pennsylvania Avenue or to The Wharf, a multibillion-dollar development along D.C.’s southwest Potomac River waterfront.
West said staying put was an “easy decision” for a combination of business, logistical and quality-of-life perspectives. The building made sense from an economic perspective, it offered the firm a relatively attractive commute, and West said he loved being in the downtown D.C. neighborhood with its vibrant pedestrian street life.
Steptoe’s approach, location and artwork differentiate it from its Washington competitors—and from the other Steptoe & Johnson PLLC in West Virginia. West said Steptoe is used to small irritations caused by mixups between the firm and its Appalachian counterpart.
“We don’t have marketing and brand confusion issues so much as we have little annoyances, like sometimes our bill will get paid to the other firm by a client that uses both firms, or we’ll get mentioned in the press as Steptoe and Johnson based in West Virginia,” West said.
West said he is much more focused on his direct competitors and on keeping in step with the market.
“I think you’ve got to strike a balance between chasing every fad and being complacent, so you have to have your eye on where the market’s going—but you can’t give people whiplash by changing all the time,” West said of the firm’s future plans. “We’ve identified our core competencies. We think those are great horses to ride, and I’d like to just see us build on those strengths.”