Blank Rome offices in Washington, D.C. on July 25, 2018. Photo: Diego M. Radzinschi/ALM
Amid transitions in leadership, Blank Rome saw modest gains in revenue and profitability for the second year in a row in 2018.
The firm increased gross revenue by 2.7 percent over 2017, reaching $443 million, as revenue per lawyer (RPL) increased by 3.5 percent, reaching $804,000, up from $777,000 the year before.
Profits per equity partner, at $931,000 in 2018, were up 1.6 percent from a year earlier, as the equity partnership grew slightly. Net income, meanwhile, increased by 3.9 percent, from $132.9 million in 2017 to $138.1 million in 2018.
"We view that as a solid year," said managing partner Grant Palmer, who officially took on that title Jan. 1. "We billed more hours with less lawyers, and so we view it as a very strong year."
Palmer said Blank Rome brought in $16.5 million more from regular hours billed and $5 million less in contingency fee revenue in 2018, compared with 2017.
The firm's total head count decreased by four, or less than 1 percent, to 551 in 2018. The total partnership stayed steady in number, at 306. But the equity partner tier, at 148 partners, grew by three lawyers, while the nonequity tier shrank by three, to 157 lawyers.
Palmer also noted that Blank Rome prepaid "significant" 2019 expenses, totaling $4.6 million, which had an effect on its bottom line for 2018.
An effective rate increase of about 2.5 percent played into the 2018 numbers, Palmer said, and expenses barely grew. The firm did not raise associate pay in 2018, but it had plans to do so in 2019—to a starting salary of $180,000 in New York, Washington, D.C., and California, and $165,000 in Philadelphia and several other markets.
Palmer said both trial and corporate practices were strong in 2018, and said financial services, real estate and commercial litigation performed especially well. The firm closed over 100 deals in 2018, he said, with a total value of more than $6 billion.
One of those deals was a merger between Blank Rome client Paddy Power Betfair and FanDuel, which closed in July.
On the litigation side, Blank Rome represented Chiquita Brands International in a high-profile case that settled last February, and continued to represent Johnson & Johnson in talc litigation. Washington partner Deborah Greenspan was also appointed as special master in the Flint, Michigan, water contamination case.
"Our firm is continuing to grow into our platform and continuing to cross-sell across our offices and across our practice groups in more significant ways than we ever have in the past," Palmer said. "We’re tracking this very closely and we view that as the reason for having a larger firm with greater capabilities and a bigger platform."
Blank Rome announced a year ago that Palmer was chosen to serve as managing partner, and that Alan Hoffman would continue as chairman of the firm. Hoffman filled both roles from 2011 to 2018.
That's not the only change in leadership the firm experienced last year. In September, it debuted a new pricing and innovation role within its C-suite, bringing on Linda Novosel from Steptoe & Johnson LLP to fill it.
"The goal is to give clients clear expectations with regard to new matters ... and price things in a way that's win-win," Palmer said. As her title suggests, Novosel is also focused on broader innovation efforts, such as a new client communications portal the firm recently developed, Palmer said.
As the firm works on project management, realization rates have improved as well, Palmer said. "We have been aiming to increase revenue without constant rate increases," he said.
Blank Rome completed a strategic plan in 2018, which it plans to implement this year, Palmer said. He has been outspoken about the firm's aspirations to continue growing in highly competitive legal markets, like New York, Los Angeles and Washington, D.C., and to open an office in Chicago. In New York, it is already relocating to a larger space to accommodate that growth.
The firm brought on 11 lateral hires in 2018, and has already added 11 lateral partners this year, for a total of 25 lateral hires. As Blank Rome continues to expand, Palmer said he's open to merger talks, but is unlikely to consider a combination of equals.
Also in 2019, Blank Rome has doubled its forces in one C-suite role—chief diversity and inclusion officer. Partner Sophia Lee has taken on that title, sharing it with partner Christopher Lewis, who has been Blank Rome’s chief diversity and inclusion officer since 2011.
"Having two people leading our diversity efforts I think is important," Palmer said. "We do want to be a leader in this area."
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