C. Wade Cooper, managing partner of Texas firm Jackson Walker. (Courtesy photo)

Revenue grew by 10.3% at Texas firm Jackson Walker in 2019, largely thanks to some significant real estate and finance transactions, in a departure from previous years when big litigation matters drove revenue growth.

Managing partner Wade Cooper said the shift was due in part to the firm's lateral hiring in real estate and finance, as well as some very active clients. Although he added that litigation continued as one of the firm's strongest practices in 2019. And in an effort to add a market-leading practice, the firm is also growing its wealth planning practice and building a roster of wealthy business-owner clients, he said.

Cooper said a number of financial factors also contributed to the firm's increased revenue in 2019, including a "standard" rate increase, 6% head count growth and improved realization.

Gross revenue at Jackson Walker hit $289.9 million in 2019, up from $262.9 million in 2018. Revenue per lawyer improved by 4.1% to $780,000, up from $749,000 in 2018, even as the firm grew by 6%, reaching 372 lawyers on a full-time equivalent basis.

Profits per equity partner came in at $1.12 million, up 1.8% from $1.1 million the year before, and the firm had 109 equity partners—10 more than it had in 2018. Net income was $122.1 million, up 12.3% from $108.7 million the prior year.

Cooper said finance was the busiest area of the firm in 2019, followed by real estate and litigation. But the wealth practice has grown in recent years, and the firm now has one of the largest practices in Texas representing wealthy families and entrepreneurs. In one major matter, Jackson Walker represented Whataburger, the iconic burger chain based in San Antonio, when it sold a majority interest to BDT Capital Partners of Chicago last year.

"That's a sweet spot for us," Cooper said of the practice area.

In the wealth planning area, the firm hired partner Kal Grant, who was a managing director at Tolleson Wealth Management, in 2019. Other lateral hires included former Houston appeals court justice Jennifer Caughey; Dallas ERISA partner Greta Cowart from Winstead; condemnation partners Joe Regan and Adam Plumbley from K&L Gates in Fort Worth; Houston employment partner Scott Fiddler who had his own firm; Dallas environmental partner Jon Bull from Foley Gardere; Austin-based energy and regulatory partner Kirk Rasmussen from Enoch Kever; Houston energy partner Kirk Tucker from Mayer Brown; and former in-house lawyer Lindsey Berwick in San Antonio.

Cooper said real estate deals kept many lawyers busy in 2019. That work included representing KDC Real Estate Development and Investment in the sale of the Pioneer Natural Resources headquarters in Irving. The firm also represented American Airlines in the development and construction of its new world headquarters at DFW International Airport and in the sale of a former headquarters building.

Jackson Walker is the largest Texas-only firm, and Cooper said that's an advantage, pointing to referrals and local counsel work that comes in from national firms. For instance, he said Kirkland & Ellis has brought in Jackson Walker's bankruptcy group when it encounters conflicts on Texas matters, he said.

"As a Texas-only firm, we are not a threat to a lot of people. … Part of our success is our ability to develop relationships with national firms," he said.

Other areas in that model include Texas regulatory work, he said. "We know a lot about the local politics, the local regulatory [and] tax environment. We do real estate projects with other capital markets firms around the country," he said.

Jackson Walker has offices in Dallas, Houston, Austin, San Antonio, Fort Worth, San Angelo and Texarkana. It is not currently considering opening any new locations, Cooper said.

Despite last year's lateral hiring, Cooper said last year's growth in the equity partner tier was partly due to a longer term succession strategy to add "NexGens" to the equity partnership.

This year, he said, the firm is addressing diversity in management. Currently, on the management committee, three of eight members are women and one is diverse, and on the compensation committee, seven of 16 members are women and two are diverse.

For the first two months of 2020, revenue was ahead of 2019′s pace, Cooper said, because the firm had grown and demand was high. But in recent weeks, the outlook has changed.

"Now, we are in a whole different ballgame," he said, referring to the effect of the stay-home orders instituted in an attempt too slow the spread of the coronavirus, and the economic effects of the virus hitting the U.S.

He said it's too early to make any decisions about what steps the firm might take if the uncertainly continues for a long period. "We have to be patient and let this play out a little bit," he said.

But, Cooper noted, during the 2008 recession, Jackson Walker did not implement any reduction-in-force, unlike many other Am Law 200 firms. "We made the decision to keep our whole team together and we did. Culturally, that's important to us," he said.

He said the firm is well-positioned because of its low overhead, lack of significant debt and a "lean and mean" staff.

Despite the economic uncertainty, Cooper said some practices are currently "super busy" including labor and employment, health care—the firm has a niche practice in telemedicine—finance and real estate. Litigators are busy, even as they encounter rescheduled hearings and trial dates, he said, and wealth planning and bankruptcy are seeing continued strong demand.

Having joined the firm in 1981, Cooper said he's worked through other downturns. "We will get to the other side of it," he said.

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