Paul Hastings Re-Elects Leaders to Push Aggressive Growth Plan

Paul Hastings re-elected Chair Frank Lopez and Managing Partner Sherrese Smith to second terms, sticking with the firm’s ambitious growth strategy.

Paul Hastings targets $2.5 billion in revenue this year, Lopez said in an interview after he was tapped for another three-year term. That would be a rise of roughly 13% from 2024.

“There is an ambition of really creating high expectations,” Lopez said. “We want the very top for everything, and if you don’t want that you’re never going to get there. And we think a lot of our competitors are sort of fine where they are in whatever pecking order.”

Lopez and Smith have led an aggressive expansion, making Paul Hastings one of the most acquisitive firms in Big Law. The firm’s revenue rose 9% and 22% during the first two full years of the leadership team’s term as it opened new offices in Dallas and Boston.

Paul Hastings wants to grow by having lawyers working collaboratively to solve client problems rather than supporting a handful of star partners’ books of business. The firm’s compensation structure incentivizes sharing work, Lopez and Smith said.

“We think what drives profitability is growing the pie,” Lopez said. “And we’re really fundamentally uninterested in a rockstar mentality where you put a few people on a pedestal and then the whole rest of the organization sort of works to carry the weight for them.”

Frank Lopez

Firm handout

Lopez’s goal for profitability in 2025 is a roughly 11% rise in the value of the firm’s partnership units, which have risen roughly 80% since 2020. Achieving that growth would mean the units have doubled in value over five years.

Smith is also spearheading a longer-term effort to boost profit margins at the firm to 60%—a level hit by only four of the largest 100 firms by revenue last year, according to The American Lawyer. Paul Hastings’ profit margin in 2023, the most recent figure, was 49%, AmLaw data show.

Lopez said the firm’s long-term goals include being “the most profitable firm in the world,” and to have each of its 17 practice areas be ranked as among the very best at what they do. The lofty goals are an embodiment of what Lopez describes as a key component of the firm’s culture, which he calls “collective ambition.”

Sherrese Smith

Firm handout

Paul Hastings has no limit on the terms its chair can serve, in contrast with some firms that place a cap after two or three terms. Lopez’s predecessor, Seth Zachary, spent 20 years in leadership, as he quadrupled revenue and drove up profits per equity partner fivefold.

Lopez, a former Proskauer Rose partner who led the firm’s global securities and capital markets practice, was a surprise pick to rise to the top leadership position in late 2022. Smith, a Washington-based data privacy and cybersecurity lawyer, succeeded Greg Nitzkowski. The duo’s new terms run through 2028.

Smith’s work on profit margins will focus on managing three areas: expenses, realization rates, and inventory and collections. Some of that work could be aided by new generative artificial intelligence technologies, Smith said, noting the firm hired a new chief information officer with a Silicon Valley background in November.

“Any law firm that does not embrace AI has missed an opportunity,” she said. “We embrace it, but we have to, because it’s going to happen whether you like it or not.”