Dechert was #48 on the AmLaw 2001 and is #24 on the AmLaw 2006. Under the headline, "Dechert Cracks the Code for Am Law 100 Success," The American Lawyer tries to explain how the firm pulled it off.
I wish the article were more successful at answering the question it poses: How did they do that? But alas, I came away from the article (did you as well?) understanding that Dechert espouses the same inarguable strategic objectives of all aspirational firms—which we can all recite in our sleep—more "high value, premium, rate-insensitive work," higher caliber lawyers and clients, aggressive expansion into key markets such as New York, etc., etc. But what I came away without was any insight into how Dechert actually accomplished this aspiration when so many others are struggling, or just plain failing, to do the same.
To be sure, the article is well reported and tells a variety of informative and entertaining stories about successes on the road from #48 to #24, but I wanted more of a real explanation—"real" meaning it doesn’t just describe what happened, but it offers a coherent theory why Dechert was able to achieve what any firm near #48 five years ago presumably would have been aspiring to.
But first, to the facts. With promise, the article starts by saying it’s all been very clear:
"Dechert’s formula has been fairly simple: Raise rates aggressively, expand head count while tightening up the equity partnership, focus on a few core practice areas, and grow the ranks in London, where the firm has 121 lawyers, and New York, home to 223 more."
Would that is all there is to it.
But ask any managing partner what keeps them up at night, and it’s (a) rate pressures; (b) the relentless war for talent; (c) the disequilibrium entente between equity and non-equity ranks; and (d) the cut-throat, "house to house combat" challenge of building profitable, respectable practices in New York and London.
I’d be as well advised to recommend that the route to happiness in life is to find work you’re passionate about and for which you’re amply rewarded, to marry ecstatically and enduringly, and to cultivate your aesthetic soul while tending to your physical vigor. Easy for me to say.
To be fair, the article immediately adds that "Dechert has also been in the right practices at the right time." This is a start.
Bart Winokur, 67, deservedly gets much credit for "shaking things up" starting in 2001, with a five-year plan to increase profitability. 40% of the partners at that time are now gone. Here are some elements of what else has changed:
- The firm has increased revenue by an average of 20% per year for five years.
- It moved aggressively into London by merging in 2000 with 165-lawyer Titmuss, Sainer & Webb, a mid-market firm with a largely domestic focus and a laid-back 1,300 hours/year average. When Dechert announced its expectation was for 1,750 hours and a far more up-market practice, at least 30 partners and 28 out of 53 London associates proceeded to leave.
- In New York, its jump-start came in 2005 with 57 lawyers from Swidler Berlin Shereff Friedman, including key partners in securities class action and white collar defense.
- From a toehold in 1982 working on a single deal for Citicorp Venture Capital, the private equity practice has mushroomed to deals such as last year’s $3.9-billion acquisition of mutual fund group Putnam Investments.
- Also in the "right place at the right time" category, we can add Dechert’s landing litigation lawyers in Palo Alto from Oppenheimer Wolff & Donnelly; picking up 32 arbitration lawyers from Coudert Bros. in Paris, and bringing in 7 IP litigation specialists from Dewey Ballantine just this year.
"Chance favors the prepared mind?"
I heartily subscribe to that adage, and reading between the lines one can credit Winokur for possessing—and acting upon—just such a mind. For example, the Swidler-Berlin acquisition was negotiated at breakneck speed, to the point where some felt it was "rammed down their throats," but in hindsight all involved approve.
Other clues are buried in the article. Winokur conducts a monthly videoconference to all partners in all offices (the article says "every week," but I take that to be a typo because it seems implausible), which reveals his proper, legitimate, and too oft honored-in-the-breach commitment to communication.
The firm is also, evidently, serious about backing up its talk about strategic priorities by committing real resources; the article mentions that "Mark Shapiro, a law firm consultant now at Blaqwell, Inc. who helped put together the firm’s last strategic plan, prodded Winokur and several practice group heads to come up with a new set of financial targets" on one of the monthly videoconferences. [Disclosure: I know both Mark personally and Blaqwell as a firm, but I have no personal knowledge of the work they’ve done for Dechert.]
The last and perhaps most forceful of the techniques Dechert has evidently been using to pursue it strategic objectives is what I’ll characterize (although the article does not, exactly) as "forced rate increases."
By "forced," I mean that there appears to be an edict from the top that every practice group will increase rates by x%/year. The rigor this enforces is self-evident, as explained thus:
"Rates were hiked 10 percent in the first year of the plan, and then 6-7 percent a year, forcing partners to initiate the kind of financial conversations with clients that most lawyers avoid. It also priced the firm out of more rate-sensitive matters, such as environmental work and property sales for large real estate management companies. “It’s been a very good discipline in making sure we have the best lawyers doing the very best work,” says Peter Astleford, a top London hedge funds partner. “If you don’t, then your lawyers will not be busy. And if they’re not busy, you know you’ve done something wrong in your business.”"
Perhaps this is the secret, after all: Not "strategy" but "technique." Or, as you hear people say, "Execution is the new strategy."
Let’s return to where we began. We can
all recite in our sleep what we should do to separate our firms from those that take the alternative path available to Dechert in 2001:
"[We] could slowly have drifted down-market and been a very nice Philadelphia firm with maybe 200 lawyers." 
What we cannot recite in our sleep is the specific steps we need to take tomorrow morning, and tomorrow and tomorrow, to get there.
Mandatory rate increases across the board?
Monthly firm-wide videoconferences to communicate?
Sustained, committed investments in New York, London, and Hong Kong?
Careful and highly selective lateral recruitment?
Knowing what to do is not the challenge. Doing it seems to be the challenge. I bet that’s how Bart Winokur sees it.
