Lawrence McMichael, Chairman & Executive Committee Member, Dilworth Paxson
In an interview with Invest:, Lawrence McMichael, chairman and executive committee member at Dilworth Paxson, discussed the firm’s strategic priorities, community impact, and approach to legal talent. “The biggest priority is ensuring effective leadership transition at every level,” said McMichael.
What have been the firm’s key milestones and achievements over the past 12 to 18 months?
We moved — a significant event for a law firm — after 16 years in our prior space. The move was successful, completed on time and under budget, though some punch-list items remain. Our chief operating officer and team managed the logistics effectively, ensuring everyone settled into their new offices happily, and the new space is working well.
In 2024, we exceeded our revenue budget for the fourth consecutive year, with strong profits per partner. We continue to attract laterals for succession planning, as older lawyers like myself have a limited runway. We have 130 lawyers at Dilworth and expect slight growth by year-end.
Growth is not our strategy; we focus on providing a boutique experience for clients within a full-service commercial firm, operating in Pennsylvania, New York City, New Jersey, and Delaware. Our goal is to hire highly qualified lawyers within that region.
Given your client base, what are the most pressing legal and business issues they face today, and how are you helping them address them?
Healthcare finance is a leading issue. Federal efforts to reduce healthcare spending are impacting the hospitals we represent. A three-hospital system in New Jersey, currently in Chapter 11 proceedings, will emerge despite inadequate government support. These hospitals serve patients without means or insurance, creating financial strain. Large systems can manage, but smaller hospitals, like our bankruptcy client, struggle. Crozer-Chester, Delaware County’s largest health system, is closing because its bankrupt parent company cannot provide support. We help clients like CarePoint modify healthcare delivery models to survive reduced funding, though less funding inevitably means less care — an unfortunate reality.
High interest rates are also causing business defaults. Companies can manage debt at 4% to 6%, but struggle at 12%, affecting leveraged businesses across sectors. Deal activity has slowed as consumers and businesses face higher borrowing costs; a 3% car loan enables purchases, while a 10% loan restricts them; businesses cannot invest when rates rise from 4.5% to 6.5%. Historically low rates persisted until inflation pushed them up, slowing economic activity. Rates will eventually drop and activity will recover, but we are not there yet.
How is the firm approaching community engagement?
Dilworth has always been committed to civic engagement. Our lawyers assist nonprofits, serve on boards, and advise governments — often for little or no compensation. For example, partner Tim Ford serves on the Committee of 70, a bipartisan watchdog group that promotes fair elections and effective government in Philadelphia. We provide legal advice to public officials and nonprofits at reduced or no cost.
Partner Matt Whitehorn, a tax lawyer, leads our pro bono program, deploying lawyers to draft wills for Indigenous communities, assist with citizenship applications, defend individuals who cannot afford counsel, and offer credit and debt counseling for indigent clients. We require younger lawyers to participate and encourage all attorneys to engage in pro bono work, including services for religious organizations. The firm recently made a $50,000 contribution to local food banks to ease the pain in the community from the suspension of SNAP benefits due to the government shutdown.
Could you expand on your approach to attracting and retaining legal talent?
To retain legal talent, we run a firm where people enjoy practicing law, minimizing bureaucracy and excessive rules beyond essentials like prohibiting harassment. We ensure timesheets are completed for billing purposes, but otherwise let lawyers practice without interference. We foster collegiality through events — luncheons, cocktail parties, outings, and sporting activities — to build friendships and esprit de corps.
We pay market rates and manage our finances to sustain competitive salaries, encouraging long-term careers. Many attorneys, including myself with 47 years at Dilworth, stay for decades. Younger lawyers often remain because of our culture and history. Dilworth’s legacy, richer than most firms in the city, is highlighted through our website, conference rooms, and shared pride — something new lawyers value.
As we look ahead, what are the firm’s top strategic priorities for the next few years?
The biggest priority is ensuring effective leadership transition at every level. I’ve been chairman for four years and will remain for at least two more, but we are now building a succession plan. In fact, we had discussions about the chairmanship transition earlier today.
This extends beyond me — we have practice group leaders and senior lawyers in key positions who are critical to client service. As these lawyers approach retirement, we need younger attorneys prepared to step into those roles. We have identified key practice areas that need focused attention over the next year or two to ensure proper succession. That includes strategic hiring where appropriate and internal development to establish clear successors.
Financially, Dilworth remains very sound. We end each year with zero debt and operate as an economically self-sustaining firm. While we occasionally borrow for short-term cash flow needs, such as February bonus payments, we repay those amounts within months and return to zero debt by year-end. We maintain cash reserves and operate conservatively without leverage, which provides stability. For equity partners, that means no concerns about personal liability or financial instability — they own a solid business. This conservative approach is not new; it has long been our management style.
