Q4 2019

DYKEMA GOSSETT PLLC 2018 ANNUAL REVIEW ALM LEGAL INTELLIGENCE DYKEMA GOSSETT ANNUAL REPORT Executive Summary

. Dykema’s ongoing strategy includes strengthening its US presence through targeted expansion and tactical hires, while controlling overall firm headcount and equity partnerships ― Dykema Gossett ranked 143rd in the 2019 Am Law 200, with 360 lawyers generating $207.2M in FY2018 revenue across 13 US offices ― Although Dykema’s headcount declined 5%, revenue only fell 2% ― Located throughout six states, 42% of the firm’s lawyers are based in Michigan and 28% in Texas ― 36% of the Texas attorneys are based in the office, which has been targeted for continued expansion1 ― The firm’s litigation practice area saw significant growth in 2018, with additional growth in the corporate & business and intellectual property practice areas . Dykema Gossett’s key financial metrics were mixed in 2018, largely failing to reach the firm’s five-year averages ― Despite declines in both gross revenue and net profit, a 9% reduction in equity partnership helped to fuel a 3% increase in Profits Per Equity Partner (PEP) ― Overall revenue fell 2%, with net profit declining 7% ― Profits Per Equity Partner (PEP) increased 3% to $565K ― Revenue Per Lawyer (RPL) grew 2% to $575K ― Cost Per Lawyer (CPL) outpaced RPL, growing 4% to $440K, higher than the firm’s five-year CPL average ― As a result of CPL growing faster than RPL, the firm’s profit margin dropped to 23% ― While overall PEP for the firm is among the highest among the ALM Selected Peers*, the firm ranked among the lowest in all other key financial metrics ― Equity partnership declined by 9%, increasing firm associate to equity partner leverage by 7% to 3.2 ― Dykema Gossett has the highest percentage of minority attorneys among its peers, but has one of the lowest percentages of female partners . Going forward, ALM Intelligence expects Dykema Gossett to continue tactical growth while maximizing firm PEP through headcount maintenance and increased leverage ratios

* ALM Selected Peers = Dickinson Wright; Holland Hart; Quarles & Brady; Stinson See methodology section for peer group criteria. See bibliography for links to underlying sources

2 Firm Report DYKEMA GOSSETT ANNUAL REPORT Key Statistics: Dykema Gossett

While Dykema Gossett was not able to improve its five-year averages for most key financial metrics, the firm reduced its equity partnership, resulting in PEP growth

Year over Year Average Annual Growth 2018 Growth 2014 -2018 2017 - 2018

Revenue ($M) $207 -2% 4%

Profit ($M) $49 -7% 5%

Profit Per Equity Partner ($K) $565 3% 0%

Profit Margin 23% -4% 1%

Revenue Per Lawyer ($K) $575 2% 2%

Total Lawyers 360 -5% 2% Metrics where the firm’s Equity Partners 86 -9% year over year 5% performance outpaced its Non-Equity Partners 120 1% five year performance 0% Leverage 3.2 7% -4%

3 Firm Report DYKEMA GOSSETT ANNUAL REPORT Dykema Gossett Geographical Footprint

Dykema Gossett has 360 lawyers located across 13 US offices in six states. Headquartered in , 81% of the firm’s lawyers are in Michigan

Lawyers by Region Year over Year 5 Year Average Lawyers By Location Dykema Gossett Annual Report, 2018 2017 – 2018 2014 – 2018 Dykema Gossett Annual Report, 2018

Midwest 225 -2% -3%

Southwest 99 -2% 40%

West Coast 27 -13% -1%

Atlantic 9 6% -13%

4 Firm Report DYKEMA GOSSETT ANNUAL REPORT Dykema Gossett Geographical Footprint Dykema’s headcount decreased by 5% in 2018, however the firm has grown by 10% over the last five years

. Dykema Gossett’s five-year growth is attributed to the Five-Year Growth By State Year Over Year Growth – All Offices addition of 114 Texas attorneys in 2015 following the Dykema Gossett, 2014-2018 Dykema Gossett, 2017-2018 merger with -based Cox Smith.2 . The El Paso office closed in 2017 -5% -7% 65 -5% . Announced in December 2018, the merger with Loss, 163 63 62 -17% Judge & Ward doubled Dykema’s DC presence beginning 163 59 58 January 20193 (headcount not reflected below) 151 -2% . The Dallas office, which has grown by 38% since 2014, 48 48 47 has been specifically targeted for expansion1 280% 0% . Dykema had key attorney additions in ,4 Bloomfield Hills,5 Austin6 and Chicago7 36 36 -13% 99 31 81 27 -5% -22% 6% 22 21 63 17 18 0% 11% 0% 0% 0% 10 10 10 9 -4% 9 9

6 6 2018 28 2017 4 4 26 27 -44% 16 10 12 -17% 9 2014 2015 2016 2017 2018

Michigan Texas Illinois California Minnesota DC

5 Firm Report DYKEMA GOSSETT ANNUAL REPORT Dykema Gossett Lateral Hiring

Dykema Gossett’s lateral hires have primarily offset lateral departures, which is consistent with most of its peer group

Lateral Partner Hires and Departures For Dykema Gossett and ALM Selected Peers, 2017 - 2019 Departures Hires

23 16 16 15 7

-3 -9 -15 -18 -17

Dykema Gossett Dickinson Wright Holland & Hart Quarles & Brady Stinson

Note: Lateral hiring data is from the period January 2017 through February 2019

6 Firm Report DYKEMA GOSSETT ANNUAL REPORT Dickinson Wright Lateral Hiring – By Practice

The firm’s litigation, real estate and insurance practices had the most lateral hiring and departure activity

Lateral Partner Hires and Departures by Practice Group For Dykema Gossett, 2017 - 2019

Departures Hires

7

3 1 1 1 1 1 1 -1 -1 -1 -1 -1 -1 -1 -2 -2 -4

Banking & Commercial Corporate & Employment & Immigration Insurance Law Intellectual Internet Law Litigation Products Real Estate Taxation Trusts and Financial Law Securities Labor Law Property Liability Estates Institutions

Note: Lateral hiring data is from the period January 2017 through February 2019

7 Firm Report DYKEMA GOSSETT ANNUAL REPORT 2018 Practice Area Growth The litigation practice area remains one of the firm’s key growth areas, along with corporate & business and intellectual property

Fastest Growing Practice Areas Fasted Growing Practice Areas By Office Dykema Gossett, 2018 Dykema Gossett, 2018

10%+ YoY Growth . The firm’s growth in government & . Bloomfield Hills regulatory practice was attributable to 20% Corporate & . growth in its Lansing office Business . Dallas . Minneapolis’ IP practice was bolstered with the addition of two senior counsel from the firm of Moore & Hansen4 IP – Patents, . Austin . Dykema enhanced its global data privacy Trademarks, . Minneapolis 44% and information security practice group Copyrights . San Antonio with the addition of a new director7

26% 22% . Bloomfield Hills . Detroit

Litigation . Chicago . Los Angeles

2017 2018 . Dallas . San Antonio Coporate & Business IP - Patents, Government and Litigation Trademarks, Regulatory Copyrights

8 Firm Report DYKEMA GOSSETT ANNUAL REPORT Performance in Key Financial Metrics

Dykema’s revenue and profit decreased, however the firm was able to grow PEP by 3% Likely Drivers of PEP Growth . 9% reduction in the number of equity partners outpacing Growth in Financial Key Metrics 5% reduction in overall headcount Dykema Gossett . 7% increase in associate to equity partner ratio Dickinson Wright Dickinson Wright ALM Selected Peers . Increase in billable hours per attorney Year over Year Average Annual Average Annual Profit Per Equity Partner ($K) Growth Growth Growth 2017 – 2018 2014 – 2018 2014 – 2018

3% 0% 3% Revenue ($M) Profit ($M) 23% Margin -2% 4% 3% 22% Margin

-7% 5% -1%

9 Firm Report DYKEMA GOSSETT ANNUAL REPORT 2018 Revenue and PPL Growth

Dykema’s Profit Per Lawyer (PPL) and revenue growth was among the lowest of its peer group

Growth in Revenue and Profit Per Lawyer For Dykema Gossett and ALM Selected Peers Key

Bubble size is proportional to Grew Profitability / Grew Revenue firm’s total revenue 30%

20% Dykema Gossett Stinson

10% 2018)

– 0%

(2017 (2017 -10% Holland & Hart YoY PPL Growth PPL Growth YoY Dickinson Wright -20% Quarles & Brady

-30% -15% -10% -5% 0% 5% 10% 15%

YoY Revenue Growth (2017 – 2018)

10 Firm Report DYKEMA GOSSETT ANNUAL REPORT Performance Versus Peers

Dykema Gossett had one of the highest PEP of its peers, however ranked among the lowest in all other financial KPIs

Dykema Dickinson Quarles & Holland & Hart Stinson Gossett Wright Brady

2018 Financials • Revenue ($M) 207 238 236 267 263 • Operating Profit ($M) 49 69 88 74 91 • Profit Margin 23% 29% 37% 28% 35% 2018 Operating Metrics • Revenue Per Lawyer ($K) Best performance in 575 527 585 593 600 these metrics • Cost Per Lawyer ($K) among peer group 440 373 366 429 392 • Profit Per Lawyer ($K) 135 154 219 163 208 • Profit Per Equity Partner ($K) 565 559 431 545 702 • Total Lawyers 360 451 404 450 439

11 Firm Report DYKEMA GOSSETT ANNUAL REPORT Financial Analysis: One Year Profit Tree

While consistent with its peer group in CPL and RPL growth, Dykema Gossett’s PEP growth rate was lower

Profit Tree Analysis: Growth Over One Year Year over year change in key metrics for Dykema Gossett and ALM Selected Peers Average, 2017 - 2018

Key

Dykema Gossett 2% YoY Growth ’17 – ‘18 Revenue Per Lawyer -2% 3% ALM Selected Peers Growth rate over PPL YoY Growth ’17 – ‘18 period 1% 4% Cost Per Lawyer 4% Profit Per Equity 3% Partner 6% 4% Associate to 7% 7% Equity Partner Ratio Leverage 8% 11% Non-Equity to 9% Equity Partner Ratio

12 Firm Report DYKEMA GOSSETT ANNUAL REPORT Financial Analysis: Five Year Trending

Dykema’s five-year averages have been consistent with its peer group averages over the same period

Revenue Per Lawyer Growth(K) Cost Per Lawyer Growth(K) Profit Per Equity Partner Growth(K) For Dykema Gossett and Peers, 2014 - 2018 For Dykema Gossett and Peers, 2014 - 2018 For Dykema Gossett and Peers, 2014 - 2018

0% $565 $564 $564 $575

$572 $440

$416 6% 8% $393 $522 8% 13% 8% $534 $349 $532 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Dykema Peer Group Average Dykema Peer Group Average Dykema Peer Group Average

While Dykema Gossett shows a flat PEP growth Average peer group RPL growth over the last five The peer group’s CPL has increased at twice the rate since 2014, PEP increased by 12% after years mirrors Dykema’s RPL growth rate of Dykema Gossett’s CPL growth over the merging with Cox Smith in 2015,1 surpassing pre- last five years merger numbers in 2018

13 Firm Report DYKEMA GOSSETT ANNUAL REPORT Gender & Minority Diversity

Dykema Gossett has the highest percentage of minority attorneys among its peers, but has one of the lowest percentages of female partners

Percentage of Female and Minority Lawyers For Dykema Gossett and Selected Peers

Dykema Gossett Dickinson Wright Holland & Hart Quarles & Brady Stinson 39% 35% 33% 31% 32% 28% 27% 23% 24% 23%

15% 12% 10% 8% 6%

% Female Attorneys % Female Partners % Minority Attorneys

14 Firm Report DYKEMA GOSSETT ANNUAL REPORT Bibliography Bibliography

1 Dykema Cox Smith Adds Cannabis/Health Care and Commercial Lending Attorneys in Dallas (5 February 2018) https://www.law.com/texaslawyer/sites/texaslawyer/2018/02/05/dykema-cox-smith-adds-cannabishealth-care-and-commercial-lending-attorneys-in-dallas/ 2 Cox Smith Merging With Dykema Gossett (6 April 2015) https://www.law.com/texaslawyer/almID/1202722518905/cox-smith-merging-with-dykema-gossett/

3 Dykema Bolts On DC Insurance Litigation Boutique Loss, Judge & Ward (4 December 2018) https://www.law.com/nationallawjournal/2018/12/04/dykema-bolts-on-dc-insurance-litigation-boutique-loss-judge-ward/

4 Robert C. Freed and Conrad A. Hansen of Minneapolis IP Firm Moore & Hansen Join Dykema (1 October 2018) https://www.dykema.com/news-press-freed-and-hansen-of-minneapolis-ip-firm-moore-and-hansen-join-dykema_092818.html

5 Midsize Moves: Michigan Boutiques, and Northwest Associates (27 September 2018) https://www.law.com/mid-market-report/2018/09/27/midsize-moves-michigan-boutiques-and-northwest-associates/

6 Austin Lawyer Who Worked for Texas AG Joins Dykema Cox Smith (25 July 2018 https://www.law.com/texaslawyer/2018/07/25/austin-lawyer-who-worked-for-texas-ag-joins-dykema-cox-smith/

7 Dykema Adds Cinthia Granados Motley to Co-Lead Its Privacy and Data Security Practice Group (5 February 2018) https://www.dykema.com/news-press-dykema-adds-cinthia-granados-motley-to-co-lead-its-privacy-and-data-security-practice-group_020518.html

15 Firm Report DYKEMA GOSSETT ANNUAL REPORT Definitions

Definitions and Methodology

• Gross Revenue is fees for legal services. It does not include disbursements or income from non-legal ancillary businesses. In all cases, the revenue and profit figures listed are for the firm's most recently completed fiscal year. Most Am Law firms are on a calendar fiscal year. • Net income is compensation paid to equity partners. • Equity Partners are those who file a Schedule K-1 tax form and receive no more than half their compensation on a fixed-income basis. • Non-equity Partners are those who receive more than half their compensation on a fixed basis. • Revenue per lawyer (RPL) is calculated by dividing the gross revenue by the number of lawyers and rounded to the nearest $1,000. • Cost per lawyer (RPL) is calculated by dividing the total costs by the number of lawyers and rounded to the nearest $1,000. • Profit per lawyer (PPL) is calculated by dividing the total net income by the number of lawyers and rounded to the nearest $1,000. • Profits per equity partner (PEP) is calculated by dividing net operating income by number of equity partners and rounded to the nearest $1,000. • Leverage is the ratio of all lawyers (minus equity partners) to equity partners • Associate leverage is the ratio of all associates to equity partners • Non-equity leverage is the ratio of all non-equity partners to equity partners • ALM Selected Peers: Most law firms have a wide range of competitors which compete with the firm in specific geographies and/or practice areas. ALM’s Selected Peer Group is designed to identify the firm-wide peers. ALM selects peers by weighing various factors including the firm’s size, organizational structure, geographic footprint, and practice area specialty. Firm can utilize the data provided in ALM Legal Compass to benchmarked themselves against specific firms or peer groups.

16 Firm Report DYKEMA GOSSETT ANNUAL REPORT Dykema Gossett Peer Group

Firms were selected as a peer group for comparison due to their common structure, geographic coverage, and similar financials

Key Financial and Headcount Metrics For Dykema Gossett and the Firm’s Peer Group, 2018

Percentage Revenue RPL CPL PPL PEP Total Total Leverage of Lawyers $M ($K) ($K) ($K) ($K) Lawyers Offices In USA

Dykema Gossett 207 575 440 135 565 360 3.2 12 100%

Dickinson Wright 238 527 373 154 559 451 2.6 17 89%

Holland & Hart 236 585 366 219 431 404 1.0 14 100%

Quarles & Brady 267 593 429 163 545 450 2.3 11 100%

Stinson 263 600 392 208 702 439 2.4 14 100%

17 Firm Report