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As ‘super firm’ profits soar, others boost revenue by shrinking partner ranks

Posted Feb 19, 2013 4:21 PM CDT
By Martha Neil

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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.

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