At the close of a fiscal year that saw the firm open two new offices through lateral acquisitions, Fox Rothschild experienced gains in its revenue and partner profits.
The firm, whose fiscal year ends March 31, saw its revenue rise from about $239.5 million in 2010 to about $257 million in 2011, a 7.3 percent increase.
Fox Rothschild’s firmwide managing partner, Mark L. Silow, attributed the firm’s revenue growth in 2011 to a combination of “growth in headcount and organic growth.”
“We had some practice areas that were very strong — principally bankruptcy and litigation — and then we had a real resurgence in corporate work,” Silow said, pointing to the firm’s role as lead counsel in the sale of Harleysville Mutual Insurance Co. to Nationwide Mutual Insurance Co. as an example of one of the largest transactions it was involved in over the past year.
Silow said the firm also began to see a resurgence in its real estate practice for the first time in several years.
Bankruptcy was also hot for the firm in 2011, with the firm serving as Delaware counsel for Major League Baseball in the Los Angeles Dodgers bankruptcy proceedings as well as handling a number of “very large” bankruptcies for casino properties and real estate developers in Las Vegas, according to Silow.
Meanwhile, practices like intellectual property and labor and employment remained steady, he said.
The firm did raise its rates in 2011 “by a little bit less than 5 percent” for partners and “a little bit less than 6 percent” for associates, according to Silow.
In addition to the bump in revenue, the firm also saw its profits per equity partner (PPP) rise 3.5 percent, from $565,000 in 2010 to $585,000 in 2011, and its profit margin grow by 2 percentage points, from 32 in 2010 to 34 in 2011.
Silow said the firm was able to increase its profitability while still focusing on growing its top line.
“We were mindful of the expense line but we really haven’t altered the way we do business,” he said.
Silow noted that the firm was able to fully absorb the cost of opening new offices in both Washington, D.C., and downtown Los Angeles this past year without incurring any debt.
In September, the firm picked up eight construction and government contracting attorneys from construction law boutique Smith Currie & Hancock and relocated its Washington location to Smith Currie’s office space.
August saw the firm acquire Los Angeles-based IP and business law firm Chan Law Group, including name partner Thomas T. Chan. The move gave Fox Rothschild, which already had an office in Century City, an additional location in downtown Los Angeles.
Silow said both acquisitions were “relatively easy integration projects” for the firm.
Since Fox Rothschild acquired the Chan Law Group in its entirety, Silow said, it was able to become productive almost immediately after joining, as was the Smith Currie group in Washington.
“Both groups were easy because they were cohesive,” he said. “The clients all came in bulk and support staff came over.”
The new additions also helped bulk up the firm’s headcount by 4.7 percent, from 450 attorneys in 2010 to 471 attorneys in 2011.
The firm’s equity partner tier swelled by 14.5 percent, from 131 partners in 2010 to 150 in 2011.
Meanwhile, the firm’s nonequity partner tier saw a steep 21.3 percent drop, from 75 in 2010 to 59 in 2011.
The firm’s total number of partners increased by only 1.5 percent, from 206 lawyers in 2010 to 209 lawyers in 2011. Its average compensation for all partners rose 4.3 percent, from $470,000 in 2010 to $490,000 in 2011.
“We had a number of partners who moved from income partner to equity partner, plus some lateral hires,” Silow said.
The firm’s revenue per lawyer rose 2.8 percent, from $530,000 in 2010 to $545,000 in 2011.
Fox Rothschild’s first-year compensation in Philadelphia remained at $125,000, Silow said.
Looking ahead, Silow said the firm expects to see the continued upward trajectory of its transactional practices.
“Corporate’s close to regaining its pre-recession form and real estate is again headed in the right direction,” he said.
In addition, Silow said he expects to see strong productivity from the recently expanded IP litigation practice, employment litigation practice and entertainment law practice.
Silow said the firm’s diversity in terms of both geography and practice areas served it well last year and he anticipates the same will be true for the coming year.
And while the firm is focused on growing its existing presence in the markets where it already has offices, Silow did not rule out the possibility of entering new markets.
“Our philosophy is we would like all of our offices to be full-service offices and to grow as large as the markets in which they operate can tolerate, so we still have a number of offices that are still on their way to those goals,” he said, but added, “Looking at other markets, we would like to be in one of the major cities in Texas and we’re interested in Chicago, Seattle and Boston.”
Silow said the firm is also interested in opening “at least one other office in a major city in Florida,” where it already has a West Palm Beach location.
This report is part of The Legal Intelligencer’s coverage of the 2011 financial results of local firms as part of the Am Law 100 and Second Hundred reports. Full results for The Am Law 100 were published in The American Lawyer and online in May. The Am Law Second Hundred will be published in June. View our interactive chart, which will be updated as additional law firm financial data is reported.