As ‘super firm’ profits soar, others boost revenue by shrinking partner ranks
Posted Feb 19, 2013 4:21 PM CDT
By Martha Neil
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.