John J. Hern, Jr. of Clark Hill. John J. Hern, Jr. of Clark Hill. (Courtesy photo)

Even with strong demand across many practices, Clark Hill posted flat revenue for 2019, which leadership attributed to continuing integration of a major merger in 2018 with Texas firm Strasburger & Price.

John Hern Jr., chief executive officer of the Detroit-based firm, said Clark Hill continued to invest in integration efforts throughout 2019, including technology upgrades and some lateral hiring. The added technology expenses totaled about $2 million in 2019.

"A lot of that integration activity bled into 2019 and we continued to make investments to solidify the combination, both in California and Texas," he said.

Clark Hill posted revenue of $298.2 million in 2019, up 0.8% when compared with $295.9 million in 2018. The firm's total head count changed little, but revenue per lawyer hit $515,000 in 2019, up 1.8% from the year before.

Profits per equity partner came in at $519,000 for 2019, up only 0.2%. That very slight improvement came despite an increase of equity partners to 134 on a full-time equivalent basis in 2019, compared with 127 in 2018.

Net income was $69.5 million in 2019, 5.6% more than $65.8 million the prior year.

The flat financials in 2019 contrast with strong metrics in 2018, when revenue improved by 52.8% and net income jumped 71.8%, compared with the prior year. But the firm grew head count by 45% in 2018 by adding the Strasburger lawyers.

Hern said the 25-office firm did well across the board in 2019.

"Our corporate M&A practice was off-the-charts busy, our real estate practice was really busy, our litigation practice was humming last year, [and] our government and regulatory affairs group grew and was very, very busy," Hern said.

He said bankruptcy got stronger as the year progressed, and the labor and employment group stayed busy all year. Additionally, the trade practice group was exceptionally active dealing with trade issues.

Some firms in Texas with M&A practices were impacted by the downturn in the oil and gas sector, but Hern said Clark Hill's M&A group does work in a number of industries, helping to insulate it from that trend. "We were able to move work from other geographic areas into Texas," he said.

Major work included earning an exclusion from tariffs recently enacted on imports from China for a client, and a summary judgment for client UMB Bank in a matter that could have cost the bank $17 million or more. Also, a team in Dublin obtained a large personal liability judgment in a fraudulent trading proceeding against a former company director.

That Dublin office, which opened in 2017, grew considerably in 2019 thanks to a merger with Irish firm O'Gradys Solicitors. The office is strategic in the post-Brexit era, because Ireland remains in the European Union.

On a full-time equivalent basis, the firm had 579 lawyers in 2019, five fewer than the year before. But Hern also noted some significant lateral hires during the year, including the acquisition of six-lawyer litigation boutique Gentile Cristalli Miller Armeni Savarese, which doubled the size of the Las Vegas office.

Other laterals include a four-lawyer team of labor and employment lawyers in California, two public finance lawyers in Pennsylvania and a former U.S. congressman in Houston.

He said the firm launched an integrated cyber and defense security practice in 2019 and added lawyers in government regulatory affairs, litigation, corporate and real estate.

Hern, CEO since 2002, will step down at the end of 2020 and become one of two co-chairs of the firm. John Hensien, currently co-chair of the automotive and manufacturing practice, will succeed him as CEO.

Hern said 2020 had a very good start and he was confident that investments the firm made in 2019 in hiring were going to pay off. But, he said, the firm's "thoughtful plan" for the year "just went out the window" because of the coronavirus pandemic. Still, he said, the firm has a need for lawyers in cybersecurity, bankruptcy and labor and employment.

"Our focus has changed from what it was at the outset of the year to an effort to work through the implications of this pandemic not only for our firm and our people, but our clients as well, " he said.

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