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Crowell & Moring partners enjoyed an uncommonly good year in 2016. “They hated it,” chairwoman Angela Styles joked about partners’ responses to the firm’s big gains in both revenue and profits.

The firm posted a 20 percent boost in revenue for 2016, and profits per equity partner (PPP) jumped 40 percent.

Gross revenue landed at $434.3 million last year, an increase of more than $71 million from the year before. And PPP reached $1.448 million, which was $412,000 more per partner than the firm reported the previous year.

Revenue per lawyer increased by $164,000, to $987,000 last year.

Major shifts in gross revenue at large firms often signal a big payday or a big change in head count: More lawyers mean more billing, and contingency work can bring a sudden windfall.

But Crowell & Moring said it found several ways to squeeze more money out of the same-sized pool of attorneys, and Styles declined to disclose any major contingency case payouts last year.

Total attorney head count shrunk by one, to 440 lawyers. The equity partnership, at 97 partners, remained about even with 2015, as did the nonequity partnership.

“There’s no flash in the pan per se for us. Some years are better for us,” Styles said. “Even in a year where we’re doing well, I’m focused like a laser on our expenses and our space, and making sure we’re really running a tight ship here. Both base and contingency business were better.”

Styles wouldn’t say what percentage of 2016 revenue came from contingency work versus billable-hour billing.

It’s likely that some contingency-related earnings came from the firm’s legal work for SUFI, a phone provider in a decade-long battle with the U.S. Air Force over an alleged breach of contract. Years ago, Crowell said work it did for SUFI was on a contingency basis; the firm wouldn’t discuss billing arrangements with any client this year. The SUFI litigation ended last year with a $180 million award for the client, including interest.

Other contingency work, primarily in antitrust, comes out of California, particularly related to partner Daniel Sasse’s recovery practice in Irvine, California.

CUTTING COSTS

The firm found some business efficiencies, too, in management decisions related to billing standards, real estate and accounting practices.

Styles said the firm billed more per attorney in 2016 than in previous years. Several less-productive attorneys left in 2016, and they closed two sole-partner outposts, in Wyoming and Egypt.

“This wasn’t where this law firm was headed strategically,” Styles said of the offices.

The firm also found savings in real estate in more expensive markets. Real estate expenses are often the largest for firms besides payroll, and any significant savings can boost a firm’s bottom line.

In Washington, Crowell & Moring subleased its 14th floor, moving the attorneys located there to other floors. In New York, Greenspoon Marder signed a sublease for 25,000 square feet of Crowell’s space on Madison Avenue in January. That space was likely valued around $150 per square foot, according to New York real estate publications.

The firm also raised its billing rate more than 3 percent. That went hand-in-hand with the addition of a chief operating officer, Jim Dixon, previously of Wilmer Cutler Pickering Hale and Dorr. In previous years, the firm billed out fewer than a quarter of its bills by the 15th of each month. By summer last year, about three-quarters of the bills were sent in that window, the firm said. That means that at year’s end, when a glut of payments came in, the firm collected revenue from the same year’s work. In past years those payments may not have come in until the following year.

“It’s hard if you’ve been going a long time without focusing on the basics. And with our new COO, we just really turned around the basics,” Styles said.

The firm tried a nuanced approach to another expense: The promise to increase associate salaries in 2016. Crowell was among the firms that matched Cravath, Swaine & Moore’s associate pay scale starting at $180,000. Crowell’s profitability, even this year, doesn’t veer near Cravath’s $3.6 million PPP level.

But not all associates will get the $180,000 amount. Crowell raised the number of hours it requires associates to bill in a year from 1900 to 2000, according to two lawyers formerly associated with the firm. If an associate doesn’t make the number or can’t raise the hours he or she bills, that lawyer takes a pay cut.

“There are a whole lot of alternatives — we have a lot of people not on track for partner that are compensated on different scales,” Styles said. She wouldn’t disclose the percent of the firm’s 152 associates who will meet the $180,000 pay scale requirements.

The firm also increased the bonus amounts it pays to associates, which are now $15,000 for first years and $100,000 for seventh years. An associate is only eligible for the bonus if he or she bills more than 2,000 hours in a year.

WHAT’S AHEAD

Regarding key practice areas, the firm is focused on its East Coast presence and certain areas of regulatory law, like government contracts, antitrust, aviation, health care and white-collar investigations, Styles said.

“We certainly are very focused on strategic growth and critical mass,” Styles said, deflecting questions about a possible merger. The firms is reportedly in talks with the New York boutique Herrick Feinstein, which has strong art law and real estate groups. Earlier in 2016, Crowell & Moring briefly considered a merger with Satterlee Stephens, another midsized New York-centric firm.

Even with that kind of bump in growth, Crowell’s results may be hard to replicate in subsequent years, according to former lawyers with the firm and others who are familiar with its business model.

Styles admitted as much. “We may have some ups and downs as we always have,” she said regarding the future. “If it comes down a little bit, nobody in the marketplace should be shocked.”

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