Revenue Improves for Most Firms, Some Markedly, in NJ
It's been a long time since law firms could take yearly revenue gains for granted, and 2016 appears to have been no different, though most saw year-over-year increases, including some impressive ones.
September 25, 2017 at 04:00 PM
4 minute read
It's been a long time since law firms could take yearly revenue gains for granted, and 2016 appears to have been no different, though most saw year-over-year increases, including some impressive ones.
According to data gathered for the Law Journal's annual Top 40 survey, 27 of 40 firms and branches operating in the state saw at least incremental increases in their New Jersey revenue.
(A note on methodology: The Law Journal in recent years has ranked firms by the revenue they generate from their New Jersey offices only, in order to allow for more apt comparisons between firms based in and out of the state. The same methodology was used for this survey.)
There appear to be some market norms within New Jersey. For example, exactly half of the 40 firms have revenue per lawyer (RPL) from $500,000 to $700,000.
But variance abounds. A little more than half of the firms listed have a profit per equity partner (PPP) figure significantly greater than their RPL figure, typically indicating a higher-leverage business model in which equity partners are few and nonequity attorneys of various ranks are numerous. About one-third have PPP figures that are lower than or roughly the same as their RPL figures, typically indicating the opposite—that a higher proportion of lawyers have an equity stake in the firm. And as the proportion of nonequity to equity partners has increased gradually over the years in New Jersey, it's not always obvious who is getting a cut of firm profits and who is strictly salaried.
RPL runs the gamut, too, with some firms approaching or cresting over the $1 million-mark.
Big revenue jumps are reputedly hard to come by in the legal market—even by acquisition, as firms in the market for laterals are all after the lawyers with books of business. Nevertheless, some firms and branches in New Jersey did have a substantial jump.
• Haddonfield-based Archer & Greiner, for example, saw a 7.6 percent rise in New Jersey gross revenue, to $78 million. Firmwide gross increased, too, by 4.6 percent, to $91 million.
• Drinker Biddle & Reath—based in Philadelphia but with substantial offices in Florham Park and Princeton—posted a 12.4 percent increase in gross revenue, to $72.3 million.
• Morristown-based Riker Danzig Scherer Hyland & Perretti had a New Jersey gross revenue increase of 5.3 percent, to $68.1 million.
• Greenbaum, Rowe, Smith & Davis of Iselin climbed 4.9 percent in New Jersey gross, to $47 million.
• Bressler, Amery & Ross, based in Florham Park, continued on its upward trend after cracking the top 20 last year. The firm grew its New Jersey gross by 15.2 percent, to $43.2 million. And its firmwide gross climbed 8.1 percent, to $86.5 million.
• Brach Eichler of Roseland increased 7.5 percent, to $35.8 million.
• Mandelbaum Salsburg of Roseland jumped 16.4 percent, to $27 million.
• Philadelphia-based Duane Morris, with offices in Cherry Hill and Newark, had a 6.8 percent increase in its New Jersey revenue, to $25 million.
As for placement on the list, there were a few significant risers: Drinker Biddle, which climbed to No. 8 from No. 11 last year; Brach Eichler, to No. 24 from No. 27; and Mandelbaum Salsburg, to No. 31 from No. 35.
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