Sills Cummis Revenue Up 2.6 Percent, PPP Steady in Fiscal 2018
The midmarket law firm has not broken into the Am Law 200 in recent years, but that could change if it continues its steady growth.
February 12, 2019 at 10:00 AM
4 minute read
The original version of this story was published on New York Law Journal
Riding the wave of a strong economy, Sills Cummis & Gross of Newark has reported gross revenue of $90.2 million for the 2018 fiscal year, up from $87.9 million the prior year—a 2.6 percent gain.
The firm also reported revenue per lawyer of $663,000 for fiscal year 2018 compared with $656,000 a year earlier.
Its profits per equity partner came to $885,000, up from $879,000 the previous year. The firm's head count grew slightly to 136 lawyers firmwide, including 63 partners, compared with 134 lawyers and 61 partners in fiscal 2017.
“It was a very successful year. I wish I could take all the credit, but the general state of the economy, the quality of our lawyers, and luck were all factors,” said R. Max Crane, the firm's managing partner.
Much of the firm's growth rests on its core practice areas of litigation, general corporate transactional work, real estate, and bankruptcy and restructuring, Crane said. Those practices and the bankruptcy practice, in particular, were in strong demand throughout the year.
The firm has income rather than equity partners and eschews lockstep compensation for its partners in favor of a highly entrepreneurial system that incentivizes the originators of business, Crane noted.
One step that Crane says undoubtedly helped grow business over the past year was the luring of James Tyrrell, a commercial litigator with a focus on toxic torts whose extensive resume includes practicing law at Latham & Watkins, Squire Patton Boggs, and Locke Lord. Highlights of Tyrrell's legal career include acting as lead counsel for New York City in the protracted litigation over the World Trade Center catastrophe and advising SEACOR in the aftermath of the Deepwater Horizon disaster.
Indeed, the law firm's growth rests heavily on the luring of highly sought-after legal professionals such as Tyrrell rather than a sudden and massive expansion through tie-ups with competitors. Even as one midsize law firm after another gets swept up in the merger wave, Crane said Sills Cummis hasn't been in merger talks recently.
“We have tried to grow incrementally and organically by bringing in lawyers by the ones and twos and in small groups, rather than looking for a 'home run' which might put our profitability at risk and our internal culture at risk. We do like to grow, but we're not looking for one swing of the bat to change our dynamic,” Crane said.
Asked whether merger talks might be a possibility in the future if the right offer came along, Crane replied, “I never say never.”
In an age of unremitting pressure on rates, Sills Cummis has been open to alternative fee arrangements for some of its clients.
“We're really guided by the client. You have to be. If a client wants an alternative rate, we will take a look at it,” Crane said.
Crane considers the lawyers' fees at his firm to be good value for many clients given the alternative. If the clients went to one of the marquee names in the legal world, they could easily pay $1,200 an hour for a partner's services and $700 an hour for the help of a second-, third-, or fourth-year associate. At Sills Cummis, the latter rate can get clients the attention of a talented partner, Crane said.
Crane added that he expects the firm's deliberate, measured growth to continue through 2019 and beyond.
“We believe that life's a marathon, not a sprint. Slow and steady wins the race,” he said.
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