Correction, 1/16/2013, 5:56 p.m. EDT. The original version of this story incorrectly reported Husch Blackwell's estimated profits per equity partner. The firm is estimating a roughly 19 percent increase in profits per equity partner. The second paragraph of this story has been revised. We regret the error.
Missouri-based Husch Blackwell's gross revenue grew by 6 percent in 2012, reversing a two-year decline, according to The American Lawyer's reporting. Meanwhile, the firm continued to significantly pare down its number of equity partners.
Husch Blackwell brought in $282.2 million in revenue in 2012, compared to $266.2 million in 2011. The firm won't have its final profits per equity partner numbers until mid-February, after a final allocation of partner profits, but it's projecting a 19 percent increase. The increase is due, in part, to a 3 percent decline in overall partner head count (number based on full-time equivalent), and an 11 percent drop in the number of equity partners.
The gain in gross revenue brings Husch Blackwell almost back to where it was in 2009, when it pulled in $289 million. Husch Blackwell's gross revenue declined 3.5 percent in 2010 and another 4.7 percent in 2011 amid the economic downturn.
Husch Blackwell CEO and managing partner Greg Smith says the firm is "very proud" of that recent growth. "In this market, a 6 percent gain is pretty good. I will be surprised if that's not above average for The Am Law 100," he says.
The growth comes largely on the back of M&A deals, Smith says. The firm represented Toronto-based Algonquin Power Co. in its $888 million acquisition of wind energy projects from Spanish wind turbine manufacturer Gamesa Corporation Tecnologica. It also backed up Skadden, Arps, Slate, Meagher & Flom on the St. Louisbased Express Scripts's $29 billion acquisition of Medco Health Solutions, one of the largest-dollar deals to close in 2012. "Our corporate group was certainly very busy this year. I'd say they were the busiest group. But our litigation work across a wide range of office locations was also strong," Smith says.
The revenue spike is also partly due to an increase in billing rates, says Smith. "The higher revenue reflects the higher billing rates associated with more sophisticated work," he says. "For the most part, 2012 was not a year where we had to make concessions to clients on rates."
Smith adds that the firm has "had years where we had success fees and contingencies, but this was not one of them."
Although Husch's total head count (number based on full-time equivalent dropped by just 1 percent, from 520 to 514, the composition of the firm has changed. The number of overall partners dropped 3 percent, from 327 to 315, while the number of equity partners dropped 11 percent, from 158 and 140, largely because of a round of demotions in March that was first reported by Missouri Lawyers Media. The firm now has 175 nonequity partners, compared to 169 in 2011. "We had to take a hard look at our management and business structure," Smith says, adding that he believes "nonequity partners are critical to success and deserve to be highly rewarded for their efforts."
This report is part of The Am Law Daily's early coverage of 2012 financial results of The Am Law 100/200. Final rankings and full results for The Am Law 100 will be published in The American Lawyer's May 2013 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.