As ‘super firm’ profits soar, others boost revenue by shrinking partner ranks
By Martha Neil
Feb 19, 2013, 09:21 pm CST
Some California law firms are seeing profits soar simply by being at the top of their game.
But others, trying to compete with “super firms” such as Latham & Watkins and Quinn Emanuel Urquhart & Sullivan and Silicon Valley powerhouses such as Cooley, are boosting reported profits by reducing the number of partners who get a share of the firm’s income, the Recorder reports. A number also ratcheted up end-of-year collection efforts to pull in as much revenue as possible in 2012.
Thus, a relatively modest revenue rise for the firm overall can look bigger when its translated into profits per partner.
“You don’t get a 10 percent jump in profits per partner with a 2 percent jump in revenue unless you shrink or restructure somehow,” consultant Peter Zeughauser told the legal publication.