2014’s Deals Boosted Firm Profits: Business of LawEllen Rosen
As many who work in the legal industry predicted, 2014 was a good year. Law firms, eager to share their good results, have been announcing their earnings since the beginning of the month, around the same time they report them to American Lawyer, the trade publication, for its annual rundown.
Now, Citi Private Bank Law Firm Group has released its own findings for the year, compiled from reports from the biggest law firms, along with smaller, regional firms. In all, data from 179 firms were evaluated.
The result: Net income rose 6 percent over 2013 and profit per equity partner climbed close to 6 percent as well.
“It was a very good year,” Citi’s John Wilmouth said in a phone interview Thursday. “Net income and profits per partner were up the most since 2010.”
Most firms improved, whether the very largest or more regional firms, but as in 2013, “the largest and most global firms performed the best,” according to the report.
Unlike 2013, “the difference in performance last year between global firms and the rest of the industry” wasn’t as significant as in 2013, Citi reported.
Revenue gains outpaced expense growth in 2014 compared with 2013. Profit margins grew, and while there was a “modest” increase in the number of equity partners, there was a strong increase in profits per equity partner, Citi said. The demand for work also rose and the bank found “positive momentum for 2015.”
The growth in revenue demand stemmed from improved demand for legal services coupled with an increase in billing rates. While expense growth was higher than in 2013, that increase resulted from compensation rather than other operating expenses.
The bank found that while rates climbed “moderately,” accrual realization -- in other words, what was actually collected -- declined slightly.
The total number of hours “increased at a faster pace than attorney headcount,” Citi found. As a result, lawyers became more productive, which somewhat eased the excess capacity remaining in the industry.
Wilmouth said the “performance gap” between the biggest firms and the others surveyed narrowed from previous years.
Still, “what we can tell from the numbers and talking to our clients is that those firms that were heavily into litigation didn’t do as well on average as those who do more transactional work,” he said.
News Corp. Promotes From Within for New General Counsel
News Corp. said David Pitofsky has been named general counsel and chief compliance officer. He succeeds Gerson Zweifach, who remains Group General Counsel and Chief Compliance Officer of 21st Century Fox.
Zweifach was retained as the News Corp. general counsel on a transitional basis following the separation of the two companies in June 2013, the company said in a statement.
Pitofsky has been deputy general counsel and deputy chief compliance officer of News Corp. since 2013. As general counsel, Pitofsky will oversee global legal operations for the media giant, including litigation, M&A, ethics and corporate governance matters.
As chief compliance officer, he will lead the compliance steering committee.
He will head a legal team that includes deputy general counsels Michael Bunder, Eugenie Gavenchak, Mark Jackson and James Marcovitz. Bunder also serves as News Corp.’s corporate secretary, while Jackson is also general counsel of the company’s Dow Jones unit.
Pitofsky joined News Corp. from Goodwin Procter LLP, where he was a partner. From 1996 to 2005, he was an assistant U.S. attorney in the Eastern District of New York.
Bass Berry Hires Two Partners for Its Washington Office
Bass, Berry & Sims PLC has started an international trade practice group to be led by Thad McBride, who joins from Sheppard Mullin Richter & Hampton LLP.
The firm also hired Richard W. Arnholt away from Crowell & Moring LLP as a member in its government contracts practice group. Both men are based in Washington.
Dickinson Wright Opens Office in Lexington, Kentucky
Dickinson Wright PLLC has opened an office in Lexington, Kentucky, with eight attorneys.
Joining are members Kimberly Bryant, Jeffrey Gehring, Brian Johnson, David Owen, Henry Richmond and Matthew A. Stinnett, all previously partners at Bingham Greenebaum Doll LLP. Also joining are of counsel Emily M. Dorisio and associate Tara N. Halbert.
Bryant focuses on mergers and acquisitions; Gehring practices in estate and wealth-transfer planning. Johnson, Owen and Stinnett are litigators. Richmond’s practice consists primarily of advising clients on trust and estate matters, gift and estate tax planning and closely held business matters.