David Taylor

Net income declined 6.2 percent at Locke Lord in 2017 and gross revenue slipped by 9.8 percent in a year when the Dallas-based firm also lost more than one in 10 of its lawyers.

However, the firm's revenue per lawyer improved by 1.6 percent for the year, coming in at $759,000 compared with $747,000 in 2016.

David Taylor, a partner in Houston who is the firm's new chairman, said the financial results showed the firm is healthy. “Our head count was down more percentage-wise than our revenue, which means the people here … are busier than before,” he said.

For 2017, gross revenue was more than $504 million, down from almost $559 million in 2016, and the firm posted net income of less than $164 million for the year compared with more than $174 million the prior year.

Profits per partner were $936,000, down a slight 1.7 percent from $952,000 the year before.

“We are happy with our performance in '17. We think it was pretty strong,” Taylor said.

Locke Lord had 664 lawyers in 2017, down 11.4 percent from the 749 it had in 2016. Taylor said the firm lost lawyers through normal attrition, retirements, and “practice management.” He said he would not attribute departures in 2017 to a lingering reaction to Locke Lord's January 2015 merger with Edwards Wildman Palmer.

The firm did lose a number of partners early in 2017 to Winston & Strawn, which opened an office in Dallas with 21 lateral partners from eight firms. Those partners included seven from Locke Lord in Dallas, and also two others who joined Winston & Strawn's Houston office.

Taylor noted that the firm did not collect as much as it expected in December, which affected the 2017 net income.

The 2017 decline in revenue follows a 6.4 percent decline in revenue in 2016, according to last year's firm finance reporting. In contrast, the 2017 decline in net income follows an 11.1 percent increase in net income in 2016.

Taylor said the firm's energy group and its private equity team were very busy throughout the year, and the firm worked on a number of very large capital financings and transactions. Other busy areas include intellectual property, insurance, health care, pharmaceuticals and lobbying, he said.

Privacy and cybersecurity was a growing area in 2017 “as many of our clients continue to face those issues with respect to the information and data they have,” he said.

“We are trying to do the blocking and tackling as we have always done, provide good service to our clients, and cross-sell,” he said.

In November, the firm was hit with a record $656,018 fine from the Solicitors Disciplinary Tribunal (SDT) in the U.K. after admitting it failed to prevent a former London partner from using a client account for “dubious” financial arrangements.

Taylor said 2018 has started off very well, and lawyers have been busy working on deals, not just in the energy and private equity space, that might have closed in 2017, but were pushed off into 2018 because of the federal tax law.