Munsch Hardt Kopf & Harr of Dallas had a "fantastic" year in 2016, leading to a 9.2 percent increase in gross revenue and a 9.1 percent increase in net income over 2015, according to firm chief executive officer Phil Appenzeller.
"Our firm has four different primary practice groups — litigation, bankruptcy, corporate and real estate – and all four of those cylinders were firing," Appenzeller said. "We try to build our firm around ups and downs in the market so we can weather it. This was one of those times every single group performed."
Gross revenue for the Texas firm reached $65.5 million in 2016, compared with $60 million in 2015, and net income came in at $24 million, compared with $22 million the prior year. Revenue per lawyer at the firm was $600,000 in 2016, up 7.1 percent compared with $560,000 in 2015, and profits per partner were $650,000—an improvement of 8.3 percent when compared with $600,000 in 2015.
Contributing to the firm's financial success in 2016, Appenzeller said, was the fact that lawyers worked more hours during the year than anticipated. He said the firm did a better job on its billing practices by communicating better with clients on the billing process and also by working efficiently. "We collected more. We wrote off less," he added.
Appenzeller said the firm started the year in a good position, coming off a year when gross revenue increased by 2.6 percent and net income by 15.8 percent. "We just kind of continued to do the best practices and we kept a tight rein on expenses, too … although we gave some of the highest bonuses to our associates and nonequity partners," he said. The firm "far exceeded" its budget, he said.
In late 2015, the firm raised the first-year starting salary for associates to $150,000, and then bumped it up to $160,000 in December 2016, he said. It was not a response to other, often larger, Texas firms moving to the Cravath rate of a starting salary of $180,000. "We want our associates to feel like they are at a place that values them as much as any of our competitors. We feel we compete well with other regional firms of our size or even bigger," he said.
The firm had 109 lawyers on a full-time-equivalent basis in 2016, compared with 107 the year before.
Appenzeller said the firm's bankruptcy and restructuring lawyers were exceptionally busy in 2016. In bankruptcy work, the firm represented the creditor's committee in Life Partners' bankruptcy and is the administrative agent to the senior lender in the bankruptcy of SH 130 Concession Co., which operates a toll road in Texas. Also, he said, the real estate section has been "incredibly busy" and "doing massive deals across the state."
Appenzeller said Munsch Hardt is a regional firm with offices in Dallas, Houston and Austin, and many of its clients are regional companies. "The core of our firm is the Texas market and that's why we try to keep our rates in line with what we believe Texas firms [clients] want to pay," he said.