Gibbons of Newark saw degrees of growth in its revenue metrics in fiscal 2018, while profits per equity partner shrank amid a growing number of shares.

The firm last year made good on plans to promote some lawyers to the equity partner tier, which grew to 38 from 32, an increase of 18.8%.

PPP as a result decreased, even as the firm's profit margin improved. The decrease in PEP to $695,000 from $790,000 the prior year represents a 12% change.

Gibbons Fiscal Year Performance

“We have really good, solid young partners who are coming along,” managing partner Patrick Dunican Jr. said, noting practice area expertise and seven-figure books of business as among the group's assets. The new class of equity partners also includes three women, he noted.

Patrick Dunican Jr.

“It was a big class,” but “it's very hard to become an equity partner at Gibbons,” Dunican added. “You have to have sustained business performance.”

He added, of the younger generation of lawyers, “there's no doubt that culturally … they do want a seat at the table. They do want to be recognized for their efforts.”

Gross revenue at the firm increased 1%, to $100.4 million from $99.4 million, while revenue per lawyer rebounded after a dip in fiscal 2017. The $590,000 RPL figure is a 3.7% climb from the prior year's $569,000.

Dunican attributed the revenue improvement in part to more work: Billable hours spiked 4.5 percent in 2018, he said, pointing up environmental litigation and products liability defense for particularly strong performance in 2018.

As for the improvement in the firm's profit margin— by one percentage point, to 26%—Dunican said, “a one-point increase, that's seven figures. That's real money.” He attributed that improvement in part to a 1.2% decrease in operating expenses. “That's just minding the store,” he said, noting that savings from a 2017 lease negotiation hit the books in 2018.

Dunican noted that the firm plans to open an office in the Red Bank area in 2019. That's “to make it easier to some of our Monmouth and Ocean County lawyers,” he said. Remote work is more commonplace now, but “we're never going to dispense with the coming-to-the-office requirement,” he added.

Among Gibbons' other financial metrics:

• With the increase in equity partner count came a decrease in nonequity partner count—to 65 from 74, a 12.2% change.

• Average compensation for all partners, both equity and nonequity, increased 3.4%, to $458,000 from $443,000.

• There was a net decrease of three total partners, to 103 from 106, a 2.8% change.

• The firm's total attorney head count decreased 2.8%, to 170 from 175. “We're a little skinnier in terms of numbers,” Dunican said, “but a lot stronger.”

On the last point, the firm's RPL has increased over the years, though the firm has gotten smaller in terms of gross revenue and total attorney head count. Five years ago, in fiscal 2013, for example, the firm had 201 total lawyers and firmwide gross revenue of $114.5 million, according to historical Law Journal data.

“Every firm can tell the market how great they think they are,” Dunican said. “What Gibbons actually has is household-name lawyers in many different practices.”

Two of those were unfortunately lost in 2018, Dunican noted: John Gibbons Jr., former chief judge of the U.S. Court of Appeals for the Third Circuit—whose name is on the firm—died last December, while commercial litigation partner Michael Quinn, who spent his career at Gibbons, died last September.

“One of the things they represented was extraordinary legal talent,” Dunican said.