Diversification & ‘Power Alley’ Practices Boost McDermott’s Law Firm Revenues and Profits

The firm just missed breaking the $2 billion barrier

McDermott Will & Emery has achieved a strong 9 percent growth in revenue for the year 2022. This financial success is attributed to the firm’s effective implementation of its “power alley” practices and its development of recession-proof work.

Although not on LawFuel’s ‘Prestigious Law Firm’ List it is not far away with its impressive financial performance and strong management.

Additionally, the firm expanded its business operations with the opening of a new office in Austin, Texas, and achieved strong growth in its overseas operations.

Despite not hitting double-digit revenue growth for the first time since 2017, McDermott Will & Emery’s revenue growth is impressive, especially when compared to its peers who have experienced declines after a tough year for some.

The firm’s revenue growth brought it very close to reaching the $2 billion mark, with a final revenue of $1.82 billion, up from $1.67 billion in the previous year.

McDermott Will & Emery’s equity partnership declined by 4.6 percent, with 206 attorneys compared to the previous year, while it welcomed 57 lateral partners. Despite this decline, the firm achieved a record high in its average profits per equity partner with a 9.2 percent growth rate, reaching $3.32 million from $3.05 million in the previous year.

McDermott’s diversification strategy was a significant contributor to its success. The firm has various practices that are recession-resistant, such as health care and renewable energy, making it more resilient to economic downturns. As per Ira Coleman, the firm’s chair, the firm’s success is attributed to its ability to leverage these practices and develop recession-proof work.

Moreover, the firm’s revenue per lawyer saw a slight growth of 0.4% to $1.42 million, with a headcount of over 1,278 lawyers after hiring over 100 new lawyers in 2022. The firm’s equity partnership decline was a result of normal attrition and retirements, rather than a formal program to de-equitize partners.

The firm’s non-equity partner headcount increased almost 9% to 425, with Coleman stating that laterals are not immediately offered equity partnerships. McDermott Will & Emery’s ability to attract lateral partners also contributed to its success, with 57 lateral partner hires in 2022.

Overall, McDermott Will & Emery’s strong performance in 2022 reflects its commitment to its “power alley” practices, its focus on diversification, and its ability to adapt to changing market conditions.