Foley & Lardner crossed the $1 billion revenue mark in 2021, and revenue per lawyer and profits per equity partner improved significantly, as the firm focused on providing broad-based service in its key industry sectors of health care and life sciences, energy, innovative technology, and manufacturing.
“Our financial performance is reflective of what we are doing in the marketplace,” said Jay Rothman, chairman and chief executive officer of the Milwaukee-based firm.
“We were very pleased with how the year turned out, crossing that billion-dollar threshold was meaningful. That was a reflection of the quality of services we are providing clients,” he said.
Rothman is leaving the firm this spring to take a job as president of the University of Wisconsin System on June 1. Daljit Doogal, a partner in Detroit, has been elected as the firm’s chairman and chief executive officer.
While pleased with the firm’s performance in his last full year as chairman and CEO, Rothman said the firm has been on a growth trajectory for several years, noting that revenue has improved by 49% since 2017. Part of the significant revenue increase was a 21.9% boost in revenue for 2018, the year when Foley & Lardner merged with Dallas-based Gardere Wynne Sewell.
Revenue hit $1.0248 billion at Foley & Lardner in 2021, up 11.1% when compared with $922,354 in 2020. With a small 1.8% increase in lawyer head count, revenue per lawyer (RPL) came in at $1.004 million, a 9.1% improvement from $920,000 the prior year.
Net income was $273.7 million in 2021, up 12.7% when compared with $242.8 million the year before. Profits per equity partner (PEP) were $1.812 million, up 14.9% when compared with $1.577 million the year before, with 1.9% fewer equity partners.
Total lawyer head count was 1,021 on a full-time equivalent basis, up 1.8% when compared with 1,003 the year before. The firm had 151 lawyers on an FTE basis, down 1.9% from 154 in 2020, and 317 non-equity partners on an FTE basis, up 2.8% when compared with 309 the prior year.
Rothman said revenue and profits were up because demand was high in many practices, particularly in the business law department, including corporate, transactions and M&A.
Litigation and intellectual property were busier in 2021 than the year before, but not as strong as practices in the business department.
“None of those practices were soft. It reinforces the wisdom of having that balanced portfolio. We expect litigation and IP to pick up,” he said.
Some specialty practices were big contributors in 2021, such as telemedicine, and supply chain was strong across all sectors, he said. Supply chain includes import/export work, contracts and dispute resolution, he said.
“It’s really sitting down with clients and strategically talking to them about what does their supply chain look like,” he said, adding that the firm helps clients find efficiencies.
Among significant transactions in 2021, the firm assisted the Utah Jazz with the launch of its Jazz NFT program, JAZZXR; assisted the Milwaukee Bucks with the launch of its 1971 Championship NFT Collection, which consists of three digital collectibles commemorating the 50th anniversary of the Bucks’ first NBA championship; and represented NFT platform Snowcrash in the formation and financing of its NFT trading platform and its partnership with Sony Music Entertainment and Universal Music Group.
In other transactions, Foley & Lardner represented Edward-Elmhurst Healthcare in its merger with NorthShore University HealthSystem; represented Numotion in its acquisition of SpinLife.com and Johnson Controls in its acquisition of FogHorn; counseled Hilton Grand Vacations on a definitive agreement to acquire Diamond Resorts International in a stock-based deal valued at about $1.4 billion; and represented CUNA Mutual Group in its acquisition of Global Preneed, a prearranged funeral insurance and final expense business, from Assurant for about $1.35 billion in cash.
While trials were limited during 2021 because of the pandemic, Foley lawyers did successfully secure a courtroom victory for a client at a trial in West Virginia related to an oil and gas lease dispute, the firm said, and among a number of IP matters and appeals, won an infringement suit for client Premium Waters at trial in U.S. District Court for the Western District of Wisconsin.
The firm increased billing rates in 2021, Rothman said, which played a role in the firm’s increased revenue for the year. But demand was up 7.3%, which was a bigger factor contributing to the higher revenue.
The firm opened an office in Salt Lake City in 2021, because the hot market is a good fit for the firm’s focus on the innovative technology and health care and life sciences sectors. Additionally, the location allows the firm to take advantage of the opportunity to hire “great talent” in the city.
As for future new offices, Rothman said nothing is on the table, but the firm is always looking strategically.
Among other hires, the firm added nine M&A and corporate lawyers in the San Francisco Bay Area, including former DLA Piper rainmaker Louis Lehot, to build out its technology and life sciences practices. The firm lost 14 partners to lateral moves during the year, but added 12.
Foley & Lardner has 22 offices in the U.S. and international offices in Brussels, Mexico City and Tokyo.
“Our international offices generally performed in line with the rest of the firm,” Rothman said. “We had an excellent year across the board.”
Expenses increased in 2021, compared with 2020, he said, with increased spending on travel and training events. The firm is devoting more resources on talent recruitment, development and training, along with leadership training, he said.
Associate compensation increased in 2021, and the firm went to a standard pay scale across offices. That shift is something the firm has been thinking about for several years, but the decision to standardize the pay scale for associates is a reflection of the pandemic, he said.
“You find talent wherever it can be, and you want to be able to attract and retain that great talent,” he said.
The firm is waiting for the market to stabilize, he said, before announcing any associate salary scale moves this year, in the wake of Big Law increases.
Growth is expected in 2022, as the firm looks to add lawyers who can help improve client service in the four targeted sectors, he said.
“That’s where we are looking to grow—a great health care lawyer or a great energy lawyer,” he said.
In February, for example, the firm expanded in the new Salt Lake City office with a six-lawyer business litigation group from Stoel Rives.
The firm’s fiscal year began on Feb. 1, and Rothman said the year has started out well, but he acknowledged some obstacles are out there.
“The whole question is what happens with inflation, what happens with Ukraine … China, COVID, shutting down some supply chains,” he said. ”My hope is it will be another strong year.”