More on Buchanan Ingersoll’s Financials in Early 2008
The article in today’s Legal on Buchanan Ingersoll & Rooney’s focus on national expansion and the firm’s reaction to criticisms by former shareholders focused a lot on the firm’s growth strategy over the past few years, particularly since the Klett Rooney merger. So much so that the financial numbers mentioned in a recent article by our sister publication Legal Times, and reaction to those stats, didn’t make it into the story.
So we bring them to you now… with a little commentary from firm management and former shareholders.
The Legal Times reported in early August on an internal business report from Buchanan Ingersoll that seemed to paint a bleak financial picture of the firm in the first few months of the latest fiscal year.
According to the shareholder business report cited by Legal Times, about one quarter of the firm’s attorneys hit their billable hour targets as of May and the average associate hours fell below 1,650. That put Buchanan Ingersoll at about $10.5 million shy of its billing goals, according to the article. The firm was also left with 35 fewer lawyers and lobbyists after a number of high-level departures.
The Legal Times reported that the firm’s unused value, which the article described as the deficit in work for its lawyers, exceeded $16.4 million in the first few months of the year. And practice areas such as intellectual property, employment law and financial institutions missed budget projections by margins between 8 and 13 percent.
As he did with the Legal Times, Buchanan Ingersoll CEO Thomas L. VanKirk told The Legal the firm is still ahead on a bottom-line basis, bringing in 3.4 percent more in revenue this year compared to the same time period last year. He said the report referenced in the Legal Times article encompassed from Feb. 1 to May 31 of 2008. VanKirk also pointed out to The Legal that the increase in revenue over last year was done with about 30 fewer attorneys. He said the firm’s value numbers have also been on the rise, which doesn’t usually happen in the summer months.
VanKirk said the firm as a whole has cut back on the number of attorneys, but no layoffs occurred. He said that, as with every year, there were some performance related layoffs. There was no single practice group affected, he said.
One former shareholder questioned the firm’s management after the Klett Rooney merger, looking particularly at the firm’s ability to make some tough financial decisions.
The former shareholder pointed to the Newark offices as an example. Buchanan Ingersoll had a Princeton office before its merger with Klett Rooney and the former shareholder said management “didn’t have the heart” to get rid of the nearby – and what the former shareholder said wasn’t really profitable – Newark, N.J. office that came with the Klett Rooney deal. The former shareholder said part of the Klett Rooney deal was a promise to keep that office open for a time.
Buchanan Ingersoll sometimes will let the wrong attorneys go while keeping those who might not be a good fit, the former shareholder said.
Another shareholder that has since left the firm had said it would be tough for the firm to suggest none of the departing lawyers were good attorneys. While some may not have been a great fit, the shareholder said they were all pretty much national attorneys with strong practices.
“Any firm has natural attrition, but when you look deep into the exits … there’s something systemically wrong,” the shareholder said.
~Gina Passarella, Senior Staff ReporterExplore posts in the same categories: Firm News