MERGING ON UP

It seems a big merger is the key to cracking the top five on the MOney 20.

Ten years ago, what was then Stinson Morrison Hecker was in the No. 5 spot on the list, and in a couple of years had moved up to No. 3. But the firm moved back down on the list when it was leap-frogged by Husch Blackwell in 2009 after Husch & Eppenberger merged with Blackwell Sanders to create the firm.

In 2010, Stinson was bumped out of the top five all together, when Polsinelli Shalton Flanigan Suelthaus merged with Shughart Thomson & Kilroy.

Now, Stinson is back in the top five after a merger of its own, with Leonard, Street and Deinard, a Minneapolis firm. The firm became Stinson Leonard Street on Jan. 1, 2014.

Mark Hinderks, co-managing partner of Stinson Leonard Street, said the ranking itself isn’t something the firm focuses on, but the numbers behind it are an achievement.

“To the extent the ranking reflects growth in our business that translates over into growth in revenue per lawyer and profit per partner, that’s something we’re very pleased with,” he said.

The numbers in last year’s MOney 20 reflected information for Stinson Morrison Hecker from fiscal year 2013 and showed a gross revenue of $155.4 million and a profit of $80.6 million. Revenue per lawyer that year was $539,500 and profit per partner was $539,000.

Post-merger, Stinson Leonard Street reported gross revenue of $259.2 million and a profit of $129 million, more than double the prior year’s. Its revenue per lawyer went up to $564,700.

Profit per partner, however, was down a bit to $537,800. Stinson’s fulltime equivalent headcount jumped from 288 attorneys in 2013 to 459 attorneys reported this year at the merged firm.

Hinderks said the increase isn’t just because the two firms combined, but both firms also did better financially than they had the previous year.

“Although to the extent we did better than either legacy firm had done [last year], part of that contribution may be a product of the merger as well. We were able to pick up new business along the way,” he said.

While the revenue jump was big, the firm’s jump to one spot higher on the MOney 20 list was not, at least when compared to other recent major Missouri mergers.

Husch Blackwell moved up to No. 3 after its merger; Blackwell Sanders had previously ranked as No. 5, and Husch & Eppenberger had ranked as No. 6. The post-merger Polsinelli moved up to No. 4 on the list, while the predecessor Polsinelli had ranked No. 7 the year before and Shugart had ranked No. 12.

Stinson also had a smaller increase in revenue than Husch, when comparing the gross revenue of the higher earning legacy firm to the newly merged firm. Stinson’s revenue went up 67 percent after the merger, while Husch Blackwell saw a 130 percent increase.

The merger between Husch and Blackwell, however, was more of a merger of equals, with each firm reporting roughly the same amount of revenue and number of attorneys. Stinson, on the other hand, brought a bigger portion of revenue and attorneys to the table.

Polsinelli, however, had a comparable scenario, with Polsinelli previously reporting higher revenue and headcount than Shugart had reported. Similarly, the newly merged firm saw a 67 percent increase in revenue the first year after its merger.

But to have jumped two or more spots, as the other merged firms did, Stinson would have had to unseat Husch Blackwell. Husch’s profits have had ups and downs since the merger; it dropped from the $302 million in 2013 to $289 this year, leaving Stinson not too far behind.

Moving up another spot could be possible, as Hinderks said 2015 is already going well.

“The first quarter, for law firms, is not typically a giant quarter, but we are materially above budget on all key metrics,” he said.

Of course, Husch Chairman Maurice Watson also reported a good first quarter for his firm, meaning next year could be another close contest for two firms that have reaped success through growth by merger.