March 18, 2011 5:28 PM
The Am Law 100: Jackson Lewis's Revenue, Profits Rise
Posted by Tom Huddleston Jr.
Labor and employment practices have been among the few areas to not only weather the economic storm but thrive in it over the past few years, as struggling companies faced more and more employment law issues resulting from layoffs and cutbacks. In 2010, despite a slowly recovering U.S. economy, labor and employment specialist Jackson Lewis managed to continue its upward trend of recent years, according to financials reported by the firm.
Gross revenue increased by just over 15 percent last year, to about $295.6 million, after gains of 10 percent in 2009 and 20 percent in 2008. In each of the previous two years the firm stepped up expansion with hiring sprees and office openings. As a result, the major gains in overall revenue were not reflected in revenue per lawyer (RPL) and profits per partner (PPP). That trend held true last year as well, with only moderate gains in both areas: RPL ticked upward by 2.87 percent, from $467,908 to $481,357; PPP increased by only 1.8 percent, from $528,526 to $538,293. (Editor's note: Following a change in our methodology for the 2011 Am Law 200, Jackson Lewis's 2009 numbers have been recalculated to reflect a full-year head count. All year-over-year percentage changes are based on those recalculated numbers.)
In 2008, revenue per lawyer flatlined and PPP trudged upward by 2 percent before rising around 3 percent, in 2009. That year, though, RPL fell off by almost 5 percent, from $491,658 in 2008 to $467,908 in 2009.
Patrick Vaccaro, Jackson Lewis managing partner, says 2010 was a banner year for the firm, marked by expansion--the firm added new offices in Baltimore and Milwaukee (for a total of 46), while head count increased by 12 percent, to 614 total lawyers--and record income. "I think it was a remarkable year, actually, considering everything, because we had a terrific expansion in 2010," he says, adding that the firm also had a lot of necessary expenses last year. ("You have to spend money to grow," he says.)
Including the spending required to bring in new hires and to open multiple locations, the firm also pumped money into firmwide software and technology improvements that had previously been put off due to the recession. With that spending in mind, he says, the average revenues are encouraging.
"Considering the significant outtake of expenses over , I think the 3 percent average distributable income was quite a good number for us," he says, adding that he believes such numbers as total income per partner outpace "most of our boutique competitors."
He's right, at least, in the case of The Am Law 200's other labor and employment giant, Littler Mendelson, to which Jackson Lewis is often compared. While Littler--like many other labor firms--has also experienced growth over the past few years, its gross revenue has climbed at a slower rate: 5 percent in 2009 and 3 percent in 2010, to $381.5 million. And, while the boost in average profits per equity partner for that firm last year (12 percent) did dwarf Jackson Lewis's, Vaccaro's estimation that his firm is outpacing others with similar focus holds true in this comparison. Littler saw PPP of $480,000, trailing Jackson Lewis by more than $50,000.
In past interviews with The Am Law Daily, Vaccaro has maintained that the firm's success is not necessarily tied to the struggling economy, and that expansion would continue. While there is more litigation related to layoffs and disputes in a bad economy, he says, a good economy normally results in increased union activity that requires employers to seek labor law advice. Labor and employment is a "very, very hot [practice area] right now, which I don't think is going to ever subside unless the plaintiffs bar goes away, and I don't see that happening anytime soon."
As The Am Law Daily has reported recently, class actions were on the rise in 2010 and experts predict more of the same in the coming year, with potential landmark cases in the offing. "What we're seeing is a lot more bet-the-ranch type cases--a lot of huge class actions that have tremendous implications for the employer," Vaccaro says, pointing specifically to class actions involving wage hour, ARISA, and systemic discrimination matters.
He expects such issues to keep the firm busy even with an improving economy. Vaccaro adds that Jackson Lewis also is moving more toward assuring fee certainty, including flat fees and capped fees, to clients whose legal departments are still facing a crunch. That steady stream of work and keeping loyal clients happy is why he predicts improved PPP in the coming year. He says the firm "should do five or six percent in distributable income in ."
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This report is part of The Am Law Daily's ongoing Web coverage of 2010 financial results of The Am Law 100/200. Results are preliminary. Final rankings and full results for The Am Law 100 will be published in The American Lawyer's May 2011 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.
Results for the 2010 fiscal year reflect a change in the survey methodology. Per-lawyer and per-partner results for 2010 are based on a full calendar year average FTE head count, while published results for previous years were, in most cases, based on an August 31 FTE head count. When possible, we have recalculated fiscal year 2009 numbers to reflect the change in head count and based percentages on those adjusted numbers.Make a comment