The Am Law 100, the Early Numbers: Profits Slip as Sheppard Mullin Adds to Head Count
Though its gross revenue rose in 2013, Sheppard Mullin Richter & Hampton saw its profits per equity partner slip amid an increase in its overall head count, according to The American Lawyer's reporting.
The California-based firm's gross revenue climbed 6.6 percent last year, to $466.5 million, while its revenue per lawyer edged up a a more modest 1.2 percent, to $850,000. San Diego–based Sheppard Mullin chairman Guy Halgren says the results were in line with the firm's business plans.
“Our revenue performance last year was strong and reflected our strategy to not stagnate and to not grow by leaps and bounds,” Halgren says. “Our aim is to grow [gross] revenue between 5 and 10 percent each year.”
At the same time, the firm's profits per partner slipped 1.6 percent, to roughly $1.25 million—a falloff that coincided with across-the-board head count increases. Sheppard Mullin's equity partnership added eight partners to reach 106, an 8.2 percent increase; its nonequity rolls expanded by 16, or a 10.7 percent boost, to 165; and its total attorney count jumped by 28 to 549, a 5.4 percent uptick.
According to Halgren, Sheppard Mullin has moved specifically to bulk up in Chicago, New York and Washington, D.C., in order to meet client demands, though it has been careful not to grow too much too fast.
Corporate matters in which Sheppard Mullin had a hand last year included its representation of LendingTree parent Tree.com Inc., in connection with the sale of its home loan center division to Discover Financial Services Inc. Sheppard Mullin also handled several notable health care industry deals last year, including representing Greater Houston Anesthesiology in its acquisition by private equity firm Welsh Carson Anderson & Stowe.
Partly as an outgrowth of its expansion over the past few years, Sheppard Mullin recently added a vice chairman to its leadership structure. Corporate partner Jon Newby, who fills the new role, is working closely with Halgren and managing partner litigator Robert Beall, a litigator, in charting the firm's future. Halgren will focus mainly on external matters such as recruiting, while Newby and Beall devote themselves primarily to internal organization and management issues. Says Halgren: “We believe [Sheppard Mullin] will benefit from having three people spending almost all of their time managing the firm."
This report is part of The Am Law Daily's early coverage of 2013 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 2014 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.