Spencer Fane Adds 10 Lawyers to Avoid Pandemic ‘Survival Mode’

Spencer Fane, an AmLaw 200 firm based in Kansas City, is adding 10 litigators in its Denver office after pandemic-induced austerity measures and a stronger-than-expected 2020 buoyed growth plans.

The attorneys represented insurance carriers in high-stakes civil litigation at Wheeler Trigg O’Donnell, a 100-plus lawyer trial firm with offices in St. Louis and Denver. They include four partners, two associates, and two of counsel, led by Terence Ridley, Evan Stephenson, Jeremy Moseley, and Linda Knight.

“We didn’t want to simply weather the storm or be in survival mode,” said Pat Whalen, the firm’s chair and managing partner. “We wanted to continue to build out our long-term strategic plan.”

The new recruits, following 52 added last year, show Spencer Fane’s commitment to hire aggressively after revenue growth outpaced peers in the Am Law Second Hundred in recent years. Firm revenue grew nearly 15% from 2018 to 2019, reaching about $131 million, the most recent AmLaw data shows. Its 320 lawyers are up from 243 in 2018, according to the data.

While the largest law firms were lifted during the pandemic year by work generated from bankruptcies, regulatory and workplace advice, and corporate America’s seemingly insatiable capital cravings, the market has been less favorable for smaller firms.

The 50 largest firms in the U.S. saw demand for their time fall .2% in 2020 compared to a 1.9% average decline for law firms, like Spencer Fane, ranked 101-200 by AmLaw, according to data from Citi Private Bank’s Law Firm Group.

Citi analysts have said there was wide performance disparities even among those groups and that cost management during the pandemic played a key role in profit growth for the industry.

Spencer Fane’s final numbers for 2020 aren’t yet available, but Whalen said the results will be “very strong.”

Pandemic Response

Whalen said he realized the firm would have to react to the pandemic when the South by Southwest festival in Austin, Texas was canceled in mid-March. He was in Austin recruiting lawyers since the firm had opened an office in the city just days earlier.

After closing its offices and getting its lawyers working remotely, Whalen said the firm’s focus turned to finances. It stress-tested its balance sheet based on a range of revenue projections.

“When you are sitting there and the market is tumbling and it looks like all hell is breaking loose, all scenarios are on the table,” he said.

To help make decisions, Whalen’s management team crafted 10 principles to guide them. For instance: Be proactive, pay attention to leading indicators, and make sure to consider the impact the pandemic is having on key clients.

The firm also wanted to take steps that could be “unwound,” Whalen said, which included an effort to avoid layoffs. The firm first reduced partner draws and then initiated a reduction in hours for staff with a commensurate reduction in their compensation.

Within about six weeks, Spencer Fane had gone back to a full-time schedule for staff and paid them back for the hours that were cut, Whalen said. Pretty soon, the firm was back to onboarding new lawyers, making hires in Texas, Minneapolis, Phoenix, and elsewhere.

With the addition of the 10 lawyers in Denver, that office, opened in 2012, now has 50 attorneys. Already this year, the firm hired a three-member team of bankruptcy lawyers in Plano, Texas. It hired a group of estate planning lawyers in Kansas City. It also hired partners in Phoenix and Austin.

Whalen said 2021 could be the firm’s biggest year for headcount growth, and he thinks the pandemic will accelerate lateral hiring and law firm consolidation across the industry.

“The way in which law firms approached this crisis, really culturally more than financially, will leave a lasting impression on partners both positive and negative,” he said. “There will be a large group of lateral talent who, whether you want to say were disaffected or unimpressed with the approach taken by their current firm, will be more accessible in the market for that reason.”