Pepper Hamilton’s revenue grew by 9.2 percent in 2012 on the strength of what its chief executive officer said was increased demand across nearly all of the firm’s practice groups.
The firm saw its revenue increase from about $324.5 million in 2011 to about $354.5 million in 2012.
Pepper Hamilton CEO Scott Green said client demand was "broad based" last year, even in those practices that had experienced slow periods in recent years.
The firm’s corporate practice, for example, was very busy, with deal activity rising, particularly toward the end of the year, Green said.
While much of that last-quarter surge was tax-driven, Green said, corporate work has remained strong through the beginning of 2013 and the firm is optimistic about the remainder of the year.
"My view is there’s still a lot of money on the sidelines," Green said, explaining that increased economic stability could free up a significant amount of investment dollars.
The firm said corporate work accounted for about 30 percent of its total revenue in 2012, second only to litigation, which accounted for about 59 percent.
Green said he does believe the economy is on the mend, albeit slowly, and that investors are gaining confidence for the first time since the recession.
"We just have to cross our fingers and hope the government doesn’t do anything to disrupt it," Green said.
According to Green, the firm was involved in some high-profile deals in 2012, including representing retailer Five Below Inc. in its initial public offering this past summer.
Green also pointed to the firm’s representation of Innovation Ventures LLC, maker of the 5-Hour Energy soft drink, in its $450 million 144-A bond issuance last year.
Along with revenue, Pepper Hamilton’s profits per partner (PPP) also saw a significant increase in 2012, growing by about 10.5 percent from the previous year.
The firm’s 2012 PPP was about $845,000, up from about $765,000 in 2011. Its equity partner tier remained essentially flat, decreasing by just one partner, from 158 in 2011 to 157 in 2012.
Its nonequity partner tier increased by only two attorneys, from 60 to 62.
"We weren’t playing with the numbers there like law firms do," Green said, explaining that, as with revenue, the PPP increase "really comes down to demand."
"The growth was really client-based," Green said.
Green said more and more clients are beginning to view Pepper Hamilton as offering better value than other firms. According to Green, the firm did raise its hourly rates in 2012, but the increase was "very modest."
Green also said the firm has been doing a fair amount of alternative fee work.
While its equity partner tier remained static, Green said the firm did increase headcount to meet client demand.
The firm’s overall number of lawyers grew by 5.1 percent, from 469 attorneys in 2011 to 493 in 2012. Its revenue per lawyer (RPL) increased by 4.3 percent, from about $690,000 in 2011 to about $720,000 in 2012.
Among the most widely publicized of those new hires was Pepper Hamilton’s acquisition of former FBI Director Louis Freeh’s 11-attorney law firm, Freeh Sporkin & Sullivan, and his consulting firm, Freeh Group International Solutions LLC, in August.
The combination, which became effective September 1, broadened Pepper Hamilton’s corporate investigations, white-collar defense and enforcement practice in New York and Washington, D.C., the firm said at the time.
Freeh was involved in both of what Green said were two of the most significant white-collar matters Pepper Hamilton worked on in 2012.
When Freeh Sporkin was hired by Penn State University to conduct an internal investigation into the school’s handling of the sex-abuse scandal surrounding former assistant football coach Jerry Sandusky, it brought on a team of several Pepper Hamilton lawyers to assist in the investigation.
Freeh’s report was issued last July, just weeks after Sandusky was convicted of 45 of 48 counts related to sexual abuse of children.
Freeh’s firm and Pepper Hamilton also worked together to consult for MF Global Holdings Ltd. in its bankruptcy last year.
Earlier this month, Pepper Hamilton announced that Freeh would be taking over as chairman of the firm for Nina M. Gussack, who served as chairwoman of the firm’s executive committee for the past six years.
Green told The Legal on Tuesday that Freeh was elected by the firm’s executive committee and that the choice reinforced the firm’s ongoing strategic plan, particularly with regard to its increasing investment in its white-collar litigation and investigations practice.
Green said he believes the need for white-collar work is growing as governments around the world are becoming more vigilant with regard to corporate operations.
"There’s more of a demand for those investigative services," Green said.
Domestically, Green said, the demand for white-collar work is being driven by forces from both the private and government sectors.
While corporate boards are becoming more proactive about conducting investigations when concerns arise, Green said the Obama administration is also creating more work for white-collar attorneys, through increased regulatory activity, changing tax structures and new legislation such as the Affordable Care Act.
In terms of geographic expansion, Green said the firm plans to continue focusing on growing in Washington, D.C., and New York, as well as in California.
In May of last year, the firm opened a Los Angeles office with the addition of Gary Apfel, former co-chairman of Dewey & LeBoeuf’s consumer financial services group.