The good news: last month, the firm brought associate salaries up to the market scale (i.e., $160K for first-year associates, $170K for second-years, $185K for third-years, etc.). As you may recall from some of our prior coverage, for a time Dickstein was paying below-market salaries, pursuant to a non-lockstep compensation system.
(A pay-related aside: it seems that we never covered the most recent bonus cycle at Dickstein. If you have info you can share, on bonuses or salaries or anything else about the firm, please email us, subject line “Dickstein Shapiro.”)
Now, on to the bad news….
First — and somewhat surprisingly for a firm that recently announced pay raises (hence our “best of times, worst of times” headline) — Dickstein Shapiro has been conducting layoffs. A tipster told us:
Fires 13 senior attorneys, 9 in DC and 4 in the New York office (which has just subleased out 1/2 of its office space)…. Firm gives these seasoned vets less than a month to vacate their offices, and very little else. Not quality [of their work product] but finances, firees told. Head for the lifeboats!
We aren’t 100 percent certain of the numbers; a source at the firm claimed that “these numbers are high with regard to layoffs and sublease (which was executed last year).” But it is the case that some reductions have taken place.
Second, some of these cuts have come from the partnership ranks. A source not at the firm but knowledgeable about the D.C. legal market informed us:
The firm is having pretty significant issues. Layoffs at the partner and associate level. They won a large contingency patent case (around $500 million in damages), but it’s on appeal. I hear many partners are hanging around because the payoff could be significant, but even if it’s affirmed, they won’t get the money until around fall.
This seems consistent with what’s publicly known. There haven’t been extensive partner defections from Dickstein, just a few departures here and there (e.g., Lew Paper and Andrew Kersting heading over to Pillsbury). The contingency patent case cited by our tipster appears to be the heart-stopping $482 million verdict in a cardiac-stent patent case brought by Dickstein client Bruce Saffran against Johnson & Johnson.
A source at Dickstein Shapiro pushed back on the negative assessment of its situation:
The quote is a deliberate attempt to mischaracterize the firm’s financial position. The firm has what bankers characterize as a “Rock of Gibraltar” balance sheet with no debt. All 2011 profits have already been distributed (not something many firms can say). The firm remains committed to New York, as well as to prudently running its business, including smart management of its expenses.
Speaking of 2011 profits at Dickstein, they were down a bit, as reported by The Blog of Legal Times:
Dickstein Shapiro’s gross revenues held steady during 2011, with the firm generating $267 million, a 0.8% increase from 2010, according to our reporting. But profits per partner fell by 9% to $915,000, and net income sank by 21.7%, to $50.5 million, a $14 million drop from 2010.
“It’s no great surprise here, 2011 was not as good as 2010,” said Dickstein chairman Michael Nannes.
How will 2012 turn out for the firm? We’ll keep you posted. If you have information to share, we welcome it (subject line “Dickstein Shapiro”).
Pillsbury Adds Two Communications Lawyers in Washington [The BLT: The Blog of Legal Times]
Profits Dropped, But Gross Revenues at Dickstein Shapiro Held Firm in 2011 [The BLT: The Blog of Legal Times]
$482 Million Awarded to Dr. Bruce Saffran: Dickstein Shapiro and Albritton Law Firm Continue to Prevail in Stent Patent Infringement Actions [Dickstein Shapiro (press release)]