Dechert Grows Revenue 6.6 Percent, PPP 2.4 Percent
Dechert saw a 6.6 percent rise in gross revenue to $777 million in 2013—a year that was spent digesting the office expansion and lateral growth of 2012.
CEO Daniel O'Donnell said all of the firm's core practices experienced growth between 2012 and 2013, with finance and real estate, financial services and intellectual property litigation leading the way with double-digit increases.
Dechert grew its revenue at a greater pace than its headcount growth, which went from 803 attorneys in 2012 to 845 in 2013—a 5.2 percent increase. The equity partner tier increased nearly 8 percent from 151 equity partners to 163 and the nonequity tier grew 5.3 percent from 113 to 119 nonequity partners.
While Dechert's compensation costs went up in line with its headcount increases, O'Donnell said the firm's other operating expenses held steady between 2012 and 2013. That resulted in a 10.4 percent jump in net income from $317.5 million to $350.5 million. The firm's profit margin rose 1 percentage point from 44 percent to 45 percent.
With the nearly 8 percent rise in the equity partner ranks, Dechert didn't see as large of a leap in its profits per equity partner (PPP) as it did with its net income. Dechert still far outpaces other Pennsylvania-based firms when it comes to PPP, however. The firm's PPP rose 2.4 percent from $2.1 million in 2012 to $2.15 million in 2013. The nonequity partner tier, which grew by six, saw its collective pay grow by $500,000 to $69 million. The average compensation for all partners rose 2.1 percent from $1.46 million to $1.49 million.
Dechert has stopped prepaying the coming year's expenses out of the previous year's profits, so the firm's 2013 PPP was not impacted by any prepayments.
The headcount growth and increase in work in some of the firm's core practice areas coupled with a 3 percent rate increase across the practices and markets the firm felt would accept such a bump, resulted in the 6.6 percent revenue spike. The firm's revenue per lawyer (RPL) grew at a smaller pace of 1.1 percent, moving from $910,000 in 2012 to $920,000 in 2013.
In 2012, Dechert opened in Almaty, Kazakhstan; Dubai, United Arab Emirates; Chicago; Tbilisi, Georgia; and Frankfurt, and added 29 lateral partners. There were no new office openings in 2013 and 10 partners were added laterally, including three equity partners, O'Donnell said.
The firm's finance and real estate practice, which decimated with the economic fallout in 2008 and 2009, has come back strong in the past few years. O'Donnell said the practice was particularly bolstered in 2013 by the commercial mortgage-backed securities market as investors moved away from conventional fixed-income securities to the CMBS market.