After a year of steady revenue in 2020, Saul Ewing Arnstein & Lehr turned over a quarter of a billion in revenue into a 14.8% increase in profit per financial partner (PEP), which exceeded 800,000 $ for the first time in the company’s history. .
Managing Partner Jason St. John, who took over from Barry Levin earlier this year, attributed the company’s performance to a strong year in key practice areas, combined with cost savings in the age of the pandemic that continued from 2020.
“It was a tough year to budget for,” St. John said in an interview. “We are proud of the success we have had. We believe this reflects the continued growth of our staff and customers.
The company achieved 6.9% more revenue in 2021 than in 2020, reaching $257.3 million, a strong performance compared to the previous year’s revenue growth of less than 1%, according to data reported by the company.
Net income in 2021 rose nearly 15% to the highest total ever for Saul Ewing of $92 million. That gave a PEP of $809,000 when split across an equity partnership that held steady at 114 attorneys.
The total number of lawyers at the firm fell 3.5% from 366 to 353, despite adding 54 lawyers to the firm during the year, according to St. John.
“At the start of 2021, we knew we would have planned retirements and transitions,” he said. “We anticipated people leaving our ranks as percentage partners. It is exactly what we expected. »
St. John said total compensation for the non-equity tier fell 7.2% to $25.6 million because the company moved more people into its stockholder ranks — or stockholder ranks. “percentage” partners, as the company’s executives call it – than ever before. Meanwhile, the number of non-participating partners decreased by four lawyers in 2021.
But compensation at the associate level was significant enough to push the company’s average compensation for all associates (APC) up 11.4% to $578,000. St. John said he’s proud that a number of fixed-income partners started developing practices last year, taking advantage of Saul Ewing’s “entrepreneurial platform.”
Company executives said hourly billable rates rose 4% in 2021, although “strong customer demand” was driving the company’s financial performance. A company spokesperson said executives expect rate increases in 2022 to be about the same as in 2021.
Like many businesses, Saul Ewing’s financial performance has been boosted by lucrative years in corporate mergers and acquisitions, securities, real estate and special purpose acquisition practices, St. John said. . He highlighted the company’s role as legal counsel to Supernus Pharmaceuticals in the acquisition of Adamas Pharmaceuticals for $450 million.
“No group has had a down year,” he said, noting that bankruptcy was a down area for law firms in 2021, but not for Saul Ewing. “[Bankruptcy] has been very strong for our law firm. Our bankruptcy practitioners have worked on quite large bankruptcy cases and thus maintained their productivity. »
The firm has gone to great lengths to portray itself as a thought leader in emerging practice areas. St. John pointed to Saul Ewing’s sports and entertainment practice, which he said the company launched in earnest in 2021 after “falling into” it in 2020. As a result, that practice group nabbed NASCAR and the NFL’s Miami Dolphins as clients, among other sports entities.
Along with members of the firm’s video games and esports practice, the firm has launched a YouTube series called “Lawyers With Game”, in which lawyers discuss major topics in sports and games with clients and leaders. Of the industry.
St. John predicted that with pent-up demand for trials across the country, litigation, which accounts for about half of the firm’s practice, will have a solid year. As for the remaining 50% of the firm’s attorneys who work on transactions, St. John said if the first quarter of 2022 was any indication, demand for corporate and real estate labor will continue on an upward trajectory.
The real estate practice recently closed a $250 million deal for the redevelopment of the Philadelphia Naval Shipyard. In SPAC practice, Saul Ewing previously represented Signal Hill Acquisition Corp. in the initial public offering of 10 million units at a price of $10 per unit, and Genesis Unicorn Capital Corp. in the $75 million initial public offering of $7.5 million at a price of $10 per unit.
Business executives are budgeting for revenue and expense increases in 2022 as professionals resume travel for client engagements and compensation costs rise to pay partners, attorneys and new hires.
The company has already made new hires as part of efforts to revamp the company’s professional development offerings, continuing an effort from last summer that included the recruitment of Robins Kaplan’s Chandra Kilgriff as director of talents.
More recently, corporate executives recruited a diversity, equity and inclusion manager with the addition of Julia James. The company also created the position of director of coaching and wellness, appointing the company’s director of career development and inclusion, Sheri M. Zachary, to the position earlier this year.
“We knew that as part of our plan to put our people first, in addition to adding a director of talent, we also wanted to hire a director of diversity, equity and inclusion to work with firm management and minority lawyers and women to deliver programs to help retain and support our minority lawyers and women,” St. John said.
The firm is also rolling out a hybrid work schedule for attorneys and staff. Dubbed by St. John as a “Four Plus Four” plan, he said he encourages employees to come into the office on four Wednesdays of each month, plus four other days in the month of their choosing.
St. John said the plan was created contrary to what corporate executives have observed about peer companies: those that mandated two or three days a week in the office would struggle to enforce those requirements.
“People are frustrated,” he said. “We wanted to avoid that.”
The goal of the suggested schedule under “Four Plus Four” is to take advantage of the benefits of working from home, while maintaining a reliable critical mass of staff on Wednesdays. Company executives aim to launch the plan on May 3.
“We reflected on the last two years and asked ourselves what are the things that we don’t want to lose and that we have learned during the pandemic? said Saint-Jean. “We have obtained valuable advantages in which we can be more efficient and use technology in a more transversal and inclusive way. We wanted to make sure we protected that.