L to R- Parker Ibrahim & Berg’s, James P. Berg, Sanjay P. Ibrahim, Scott W. Parker (Carmen Natale)
In the aftermath of the last decade’s recession, while firms were retrenching, three in-house counsel from JPMorgan Chase started their own shop in New Jersey and went rapidly into expansion mode.
Since its founding in 2011 as a mortgage litigation boutique, Parker Ibrahim & Berg has grown from three name partners to 31 lawyers and has opened two out-of-state offices—drawing attorneys from major New York firms in the process.
Building to specifications as existing firms struggled to right-size in response to dwindling demand for legal services, Parker Ibrahim grew rapidly in an unforgiving environment, said managing partner Sanjay Ibrahim in an interview.
“Our thought process all along was, everything has to be scalable,” he said. “It gave us a distinct advantage. A lot of law firms faced challenges they never had to face in their history.”
Most recently, the firm lured Scott Rose—formerly a partner at Willkie Farr & Gallagher, where he spent the first 17 years of his legal career—to chair its Complex Commercial and Securities Litigation practice group.
Parker Ibrahim also can boast laterals from Greenberg Traurig; Cravath, Swaine & Moore; Weil, Gotshal & Manges; Patton Boggs; Lowenstein Sandler; Riker Danzig Scherer Hyland & Perretti; and Duane Morris.
Aside from “superior perks”—lawyers and staffers get free meals and gym memberships—Ibrahim said competitive compensation has attracted talent.
Compensation for all partners (CAP), both equity and nonequity, averaged $346,000 last year, Ibrahim said.
Paying nonequity partners and associates well has meant a smaller draw for the founding partners. “Some of us have decided to take a little less for the betterment of the firm,” Ibrahim said.
In fiscal year 2013, the name partners each drew a one-third share of the $1.22 million in profit ($405,000 profit per partner), according to his numbers.
With $10.3 million in gross revenue and an attorney head count at 28 that year, revenue per lawyer was $515,000—comparable to Riker Danzig ($534,000), West Orange’s Wolff & Samson ($510,000) and Woodbridge’s Wilentz, Goldman & Spitzer ($497,000), according to the Law Journal’s April 29 survey of top-grossing N.J. firms.
Average hourly billing rates range from the high $300s to the mid-$400s.
Ibrahim projects fiscal 2014 gross at $14 million or more, though that figure doesn’t account for planned hires.
It’s a remarkable growth rate for a firm that just celebrated its third birthday. Parker Ibrahim opened in February 2011 with Ibrahim, Scott Parker and James Berg—colleagues in JPMorgan Chase’s mortgage division, and BigLaw lawyers before that.
With an abundance of mortgage litigation work, the time was right to split off. The timing also was good for personal reasons: the lawyers, then in their mid- to late 30s and raising young children, would have time to recover if the venture didn’t pan out, Ibrahim said.
The partners recognized a need for legal counsel among middle-market lenders but immediately got work from JPMorgan Chase and eventually took on other big banks as clients, including the Royal Bank of Scotland, Green Tree and Bank of America.
Parker Ibrahim started in a 200-square-foot office in Bridgewater with no staff. Within months, it leased an additional 3,000 square feet, hired staff and began filling out its lawyer ranks.
In December 2011, the firm moved to a 30,000-square-foot floor at 270 Davidson Ave. in Somerset. Called “The Tower,” it’s Somerset County’s tallest building.
Last December, the firm leased a 15,000-square-foot space at 7 Penn Center in Philadelphia staffed with four commercial litigation lawyers, and also has an outpost at 5 Penn Plaza in New York, though without any full-time lawyers.
More recently, the firm entered a lease to occupy two additional floors in Somerset, bringing that main office’s total space to 90,000 square feet.
The firm is negotiating a lease on a new office in Chicago, to handle financial services litigation, and is planning to open an office in Boston for corporate transactional work. Those branches are to be staffed by lateral hires not yet finalized, Ibrahim said.
The firm has paid cash for its expansions and avoided long-term borrowing, though it has lines of credit to bankroll normal business expenses, Ibrahim said.
It’s the rapid hiring rate that has Parker Ibrahim steadily outgrowing its space. The firm hasn’t used recruiters but offers incentives for employee referrals and has ties to big firms from the JPMorgan Chase days. “That has been a very, very powerful tool in getting the people we want,” Ibrahim said.
Those additions have come from a variety of disciplines: complex commercial litigation, securities litigation and regulatory, accounting irregularities, internal investigations, and employment litigation and counseling. There’s also a transactional practice that is taking some time to piece together, Ibrahim said.
In February, Parker Ibrahim hired Molly Sheehan—who previously was general counsel of JPMorgan Chase’s mortgage division and to whom the name partners once reported. Partner Richard Kielbania of the firm’s reinsurance/insurance group, formerly of counsel at Riker Danzig, joined recently.
In 2013, the firm brought on 12 new and lateral associates—tied for third-most among all New Jersey firms and branches, according to a Law Journal survey.
Parker Ibrahim has some pending job offers and continues to advertise positions, Ibrahim said.
There’s been upward mobility for the newcomers. John Falzone, a mortgage banking attorney, left Latham & Watkins in New York to join Parker Ibrahim as an associate and since has made partner, while Anthony Vaughn Jr., also a mortgage banking attorney, got the same promotion after coming over as an associate from Gogick, Byrne & O’Neill in New York.
Ibrahim said the firm’s hourly rates and flexible billing structure—which gives attorneys some degree of autonomy in setting their rates, subject to executive committee approval—benefit the lawyers, not just the clients.
He echoed a common selling point used by New Jersey lawyers: “It’s the same brain, half the price.”
For new hire Rose, the move to Parker Ibrahim really has meant billing at half the hourly rate he was charging at Willkie Farr—and, as a result, a cut in his take-home pay, he said in an interview.
“The dollars and cents have to make sense” for the move to be worth it, though the possibility of never getting back to the Willkie Farr level of compensation is “a risk that I take,” Rose said.
But the lower rates make business origination much easier, he said.
“The real driver was the idea of getting in at…basically the ground floor of a place that was both young and dynamic,” said Rose, 42, a New Jersey resident who, like the name partners, has a young family.
“Part of the strategic move…was to really help build out the practice” and “being able to build and sustain my own book of business, which is difficult to do at a big firm, especially as a young litigation partner,” he added.
Despite all the successes since 2011, Ibrahim agreed that leaving a successful corporate job to hang up a shingle comes with risks.
“I always say rational, sober people don’t do what we do,” Ibrahim said.
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