Pittsburgh-based Buchanan Ingersoll & Rooney’s gross revenue stayed almost flat last year, but Chief Executive Officer John A. “Jack” Barbour called 2010 a “spectacular” year for the firm.
The firm’s revenue creeped up just 0.2 percent from $249.4 million in 2009 to $250 million in 2010, but profits spiked.
Last year, the firm reported its 2009 gross revenue as $264.9 million, but this year restated that figure as $15.5 million less.
According to Barbour, a “clerical error” had led to the inclusion of reimbursed expenses such as filing fees in the U.S. Patent and Trademark Office in last year’s gross revenue figure.
Barbour said those reimbursements amounted to “dollar in, dollar out” transactions and should not have been included as part of the firm’s gross revenue.
But while, based on the adjusted 2009 figure, Buchanan Ingersoll’s gross revenue saw only a slight increase in 2010, Barbour said the firm “far exceeded expectations” in his first full year at the helm since taking over as CEO in July 2009.
Part of the reason for his enthusiasm is that profits per equity partner (PPP) rose 12 percent, from $590,000 in 2009 to $661,000 in 2010.
Barbour said the firm was able to achieve this in part by managing its expenses well and making cuts where they needed to be made, focusing on retaining only “what was essential to our clients.”
The firm spent the year constantly re-evaluating itself, he said.
Some of those cuts included support staff and rent, Barbour said, but the majority of them were related to things like library and vendor costs, photocopying expenses and seminar fees.
The firm’s overall headcount did dip 3.6 percent in 2010, dropping from 421 to 406.
The firm restated its 2009 headcount to exclude 24 government relations nonlawyers. This change was also reflected by the restated 2009 revenue per lawyer (RPL).
Meanwhile, the number of equity partners rose 1 percent, from 101 to 102, and the non-equity partner tier shrank by 8.4 percent, from 95 to 87.
Along with PPP, RPL in 2010 rose 5.5 percent from $584,000 to $616,000 and average compensation for all partners in 2010 jumped 18.5 percent from $437,000 to $518,000.
Barbour said the firm increased these numbers by making sure its lawyers were “as fully engaged as they could be.”
“If a practice wasn’t profitable, we’d ask, ‘Could we change it?’” he said. “If not, we’d ask, ‘Are these people right for us?’”
Among the firm’s busiest practices last year were litigation, bankruptcy, labor and employment, intellectual property and government relations, according to Barbour.
Barbour told The Legal in 2009 that the firm’s energy practice was “poised for growth” in 2010.
Indeed, that practice saw “double-digit hires” in all of the firm’s offices, and particularly Harrisburg and Lancaster, in 2010, Barbour said.
“We think we’ve become the go-to firm for Marcellus Shale and other energy work,” he said, adding that the firm is focused on furthering its expertise in natural gas, coal, solar and wind power.
Barbour’s 2009 prediction that the firm’s lending practice would grow in 2010 also came true.
“It grew very significantly,” he said. “We are at or close to [being among] the top 10 firms in the country for loan documentation.”
Barbour said the group’s success could be attributed, in part, to banks’ continued syndicated loan activity throughout 2010.
According to Barbour, the firm’s real estate practice was also busy last year, though it mostly focused on matters such as loan workouts since new, out-of-ground construction remained virtually nonexistent.
By the end of the year, the firm’s attorneys had “substantially” exceeded its billable hour budget, Barbour said.
The firm did raise rates in 2010 based on the heightened experience levels of some of its lawyers, but the increases were “certainly not of the size they were” before the recession, he said.
Barbour said the firm does occasionally do alternative fee arrangements, but always tries to achieve a “win-win situation where we come out at or close to our regular hourly rates and there are savings for our clients.”
And while partners saw bigger paychecks in 2010, the firm’s associates also benefited from a busy year.
One of Barbour’s first orders of business after taking over from longtime CEO Thomas L. VanKirk in July 2009 had been to cut associate salaries by between 5 percent and 10 percent.
But Barbour said the firm raised those salaries back up by an equal margin in 2010.
“I had committed to our associates that, if we had a good year, we would share more of the profits and we had a good year,” he said, adding that the firm also handed out “significant” bonuses last year.
According to Barbour, Buchanan Ingersoll is interested in growing its ranks through both associate and lateral partner hires.
Barbour said the firm, which deferred its 2009 first-year associate class until 2010, did have a small summer program last year but is primarily interested in growing its associate ranks laterally.
“We’re busy enough that we find ourselves in constant need of associates,” he said. “But I don’t think we’re ever going back to the days of bringing on a large class from law school.”
Barbour said he’s interested in growing the firm’s Philadelphia, New York and Washington, D.C., offices and is “looking aggressively” for new hires to its three Florida offices in Aventura, Miami and Tampa, the latter of which saw the defection of nine health care attorneys to Carlton Fields last November.
Barbour said the firm also remains focused on expanding its energy practices in Pittsburgh and Harrisburg.
According to Barbour, the Marcellus Shale play has a projected lifespan of about 40 years and, because natural gas prices are currently depressed, the real boom may still be yet to come.
“Whatever base we have by then will again expand exponentially,” he said.
Barbour is equally optimistic in his short-term vision for Buchanan Ingersoll, saying he does not foresee any across-the-board cuts in the coming year, though the firm will continue to be vigilant about unnecessary expenses.
“We had a spectacular year last year and we’re poised to have an even better year in 2011,” he said. •