Saul Ewing Arnstein & Lehr, which started out in 2017 simply as Saul Ewing, saw revenue increase by more than $66 million from 2016 to 2017, thanks to the largest merger in its history.

The firm's gross revenue grew by 43.7 percent, to $219.3 million. Revenue per lawyer decreased by 3.5 percent to $585,000, as head count grew dramatically. It was a similar story for profits per equity partner, which dropped by 5.1 percent to $555,000.

Saul Ewing announced in September that it had merged with Arnstein & Lehr, a midsize firm based in Chicago that also had offices in Florida. The combined firm had 375 lawyers, including 117 equity partners and 90 nonequity partners, in 2017.

Managing partner Barry Levin said the year was a “roaring success,” despite the “dilutive effect” of the merger on RPL and PPP.

“We got both added strength on strength, as well as a few new practice areas,” Levin said.

Levin said the merged firm beat its budget by 7 percent, based on a combination of the two firms' budgets pre-merger. That would have been 11 percent, he said, had the firm not prepaid some 2018 expenses.

The firm's profit margin was steady from 2016 to 2017, at 30 percent.

Levin said he expects the firm's RPL and PPP to return to pre-merger levels and continue growing in coming months. The decline was a product of the two firms having RPL in different places, he said, and will be remedied as the firms continue to integrate, implement operational best practices and take advantage of opportunities to collaborate. He said Saul Ewing and Arnstein & Lehr had modestly different rate structures before the merger.

As a whole, the firm raised rates by close to 3 percent, Levin said. And its historically strong practices continued to be strong. He highlighted the higher education practice, in which the firm now represents more than 350 schools, and the litigation practice.

Merging Two Firms

Integrating 140-lawyer Arnstein & Lehr into Saul Ewing was a major focus of 2017, Levin said, beginning long before the deal was formalized and announced in September. The two firms initiated talks in June 2016, and an integration committee of seven lawyers and four other professionals met monthly throughout 2017. They also had a retreat six weeks before the merger became effective, he said.

The firms did not have to cut staff positions after combining, Levin said, and only one lawyer left as a result of the merger. There was no overlap in geography between the two firms, with Arnstein & Lehr adding a presence in Chicago and Florida. Still, Levin said he would describe the firm now as super-regional rather than national.

The combination has already started to pay off with new work, Levin said. Based on data collected through the integration, the combined firm has taken on 125 new matters that it wouldn't have been able to work on were it not for the merger, and one of those has 34 sub-matters, he said.

“We can do larger and more complicated matters,” Levin said, as well as projects in Chicago that Arnstein & Lehr may not have been able to take on before.

In bringing on Arnstein & Lehr's practices, Saul Ewing gained capabilities in products liability work and in EB-5 investment work, which is especially active in Florida.

Levin said integrating the firm's people was the highest priority, but they have also worked on adopting the operational best practices of each firm. They have already combined their financial systems, he noted.

In the coming year, Levin said, the firm will aim to expand on its existing practice areas. He noted cybersecurity and data privacy as an area of growth in the recent past and future. That practice got some extra attention last year when the firm's then-chair, April Doss, was tapped to serve as special counsel to the U.S. Senate Intelligence Committee in its investigation of Russia's involvement in the 2016 presidential election.

Levin said he's gotten numerous inquiries about other potential combinations since completing the merger with Arnstein & Lehr. A lot of them were from the West Coast, but none of those has led to further merger talks yet, he said.

However, he did acknowledge that Saul Ewing, like other Philadelphia-based law firms, has had to look outside its home city to grow.

“It's a mature marketplace for legal,” he said, referring to Philadelphia. “We wanted to be in growing geographic areas.”