(Reuters) – Washington, DC-founded law firm Steptoe & Johnson on Wednesday said its revenue increased by 3% to $434.6 million in 2022, a slowdown from its growth in 2021 but still record receipts for the firm.
Steptoe chair Gwen Renigar attributed the growth in part to the firm’s government-facing practices.
The firm said its lawyers were busy advising clients on how to navigate sanctions the US and other Western countries leveled against Russia following its invasion of Ukraine.
Steptoe lawyers were also pressed into service by companies and trade associations to advocate for certain provisions in the $52.7 billion semiconductor chips manufacturing subsidy and research law the US passed last year, the firm said.
Steptoe also said it had a record year in terms of profitability, with distributions to equity partners increasing 6.9% to more than $1.6 million in 2022.
In June, the firm said it would cut pay and hours for associates who were not meeting billable hour goals. It said a “small number” of associates who were consistently putting in below 80% of their expected billable hours were moved to reduce work schedules with lower pay through the end of 2022.
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Ten associates who were working on a reduced schedule are now “back on a full-time budget,” while another 10 associates have been moved to the reduced schedule, Renigar said.
Steptoe & Johnson’s top-performing associates were rewarded with outsized bonuses, she said.
The firm’s 3% revenue growth matched the average reported by Wells Fargo’s Legal Specialty Group, which surveyed more than 140 law firms, including 68 of the top 100 highest-grossing US firms, about their 2022 results.
That average was markedly down from 2021, when Wells Fargo reported law firm revenue growth of 14%, driven in part by a boom in global corporate deal making. Steptoe’s revenue will grow by 7.13% in 2021, according to data collected by The American Lawyer.
Wells Fargo found that demand for legal services overall dropped 1.9% last year, pushing down profits.
“It wasn’t a bad year,” said Owen Burman, a senior consultant in the Wells Fargo unit. For a lot of firms, 2022 is their second-best year ever, he said.
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