Leaders of midsize firms in Pennsylvania were upbeat when asked about their expectations for 2018 as the year wraps up, with little anxiety around the prospect of year-end collections.

These midsize firms agreed that demand has been healthy, in line with industrywide trends, but they pointed to a range of reasons. A few firm leaders pointed to particularly strong niche or specialty practice areas that drove revenue, while others noted growth by way of head count expansion.

Donald Bluedorn, managing shareholder of Pittsburgh-based Babst Calland, said it has been a strong year so far for the firm's primary sectors. As for collecting on that work, he said, “We haven't seen any slippage in accounts receivable.”

“People value the work we're doing, they're willing to pay for the work, and they're paying us on time,” Bluedorn said.

Energy is a major practice at Babst Calland, and demand has grown recently in that area, Bluedorn said, particularly in mineral title services. He noted that the energy sector on the whole has been “robust,” particularly after a weaker 2016.

The firm also did some significant hiring in its emerging technologies practice in 2018, including a lawyer focused on unmanned vehicles and related legal issues. That's an area where demand is growing as well, Bluedorn said. “We've seen an uptick in [private equity] projects, particularly as it relates to emerging technologies,” he noted.

Andrew Indeck, chairman of Weber Gallagher Simpson Stapleton Fires & Newby, said his firm is seeing a realization rate in the 90-percent range on collections. This collections season has been “pretty consistent with what they've been in the past years,” he said, noting that the insurance defense firm's clients tend to ramp up payments toward year-end to clear their books.

Weber Gallagher made a couple of group hires in 2018 that have had an effect on revenue, Indeck said, referring to a group of five lawyers in Bedminster, and the addition of a New York office with six attorneys. “Collections on those, because those moves happened mid-year, is really just starting,” Indeck said.

That will make for revenue growth, he said, but how it shakes out on a per-lawyer basis is yet to be seen.

Brian Jackson, chairman of McNees Wallace & Nurick, said his firm has made an effort in recent years to collect on a more regular basis. Clients usually pay promptly, he said, within 30 to 60 days.

“Most of what we are doing in the fourth quarter and last portion of the year is following up with our people who are relationship managers … to make sure there are no matters that fell through the cracks,” he said.

That makes for a clearer prediction of how 2018 will look on the whole.

“It's not going to be a huge uptick year from our perspective but a nice improvement from 2017,” Jackson said. “We don't have really high highs, or low lows, and that's OK.”

Jackson said he is optimistic about 2019, including potential growth in new areas of service and additional work outside of the firm's existing geographic footprint—though he noted that doesn't necessarily require opening new offices.

Jeff Lobach, managing partner of Barley Snyder, said his firm, too, has been working to even out its revenue cycle for the past few years, including investing in the firm's accounting function.

“The economy is booming. Clients seem to be not quite as interested in using us as a bank, and they seem to be paying us on a more timely basis,” Lobach said.

He said Barley Snyder has exceeded its record annual revenue already, just within the first 11 months of the year. That's due in part to growth, he said. The firm staffed its Gettysburg office this year, and opened locations in Harrisburg and Columbia.

In terms of demand, he said, “it's a little bit hard to separate the systemic from the growth-related upticks, but we just continue to build capacity. We're trying to keep up with our clients in terms of the need. We're still looking for people.”

Lobach said Barley Snyder was involved in an increasing number of transactions this year, and that dealmaking activity has been on the rise steadily since the Great Recession ended.

David Pudlin, managing partner of Hangley Aronchick Segal Pudlin & Schiller, said he projects that the firm will finish 2018 about 30 percent ahead of budget, in terms of revenue. He said commercial litigation—including insurance coverage, antitrust and environmental—and family law were growth areas for the firm this year.

“There is nothing about our practice that should result in our revenues being paid disproportionately in the final two months of the year, but it is that way each year and presumably reflects the cash flow practices and tax planning of our clients,” Pudlin said in an email.

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