Patton Boggs closes a New Jersey office

February 25

Washington law and lobby firm Patton Boggs plans to close its New Jersey office within the next six weeks, following a second consecutive year of falling revenue.

The move comes on the heels of several months of cuts. In 2013, the firm let go 40 attorneys and 70 staffers, reduced the number of partners who own a stake in the firm and announced changes to its compensation system as part of a restructuring plan to offset declining profitability.

The firm, known for its lobbying prowess, will continue trimming its number of equity partners — partners who own part of the firm and split its profits (as opposed to partners who earn a salary). The firm had 98 equity partners as of last November; that number has since fallen to 83 and will likely reach 70 by the end of the year, said managing partner Ed Newberry.

Overall firm revenue in 2013 was $279 million — down 12 percent from $317 million in 2012, and down 18 percent compared to the firm’s peak revenue of $340 million in 2011. During the same period, attorney headcount dropped 21 percent from 480 to 380.

“We’re matching the size of the firm to the level of revenue,” Newberry said. “The revenue isn’t there but that’s the reality, so we have to respond to the reality. Losing the revenue is hard and making the adjustments is hard but you have to go through it.”

Patton Boggs has about 24 attorneys in its New Jersey office. Nine or 10 lawyers will be absorbed into the firm’s New York office. Six attorneys — including those who are representing Chris Christie and the New Jersey Republican State Committee in the bridge scandal — will move to a new office in Florham Park, NJ. About nine attorney positions and at least four staff positions will be eliminated.

The firm’s current real estate in New Jersey costs about $1.8 million a year.

At its peak in 2009 and 2010, the New Jersey office housed about 80 attorneys and was bringing in $60 million in revenue, largely due to litigation on behalf of the city of New York defending against health-related claims involving the World Trade Center attacks. But those cases settled, which meant the office was no longer as profitable — it went from producing $60 million a year to just $10 million a year. Last year alone, the New Jersey office lost $11.8 million.

Newberry said the possibility of closing the New Jersey office had been discussed with the firm’s partners last July, and did not come as a surprise.

“In July, when we adopted the strategic plan, we concluded we’d make whatever adjustments we needed in the first quarter of this year to make sure New Jersey would break even or be profitable,” he said. “We spent the first four to five weeks of the year evaluating how to respond to that.”

Catherine Ho covers law and lobbying for Capital Business, which she joined in 2011. She was previously a reporter at the Daily Journal in Los Angeles, covering LA civil courts and labor and employment law.
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