Big Firms Could Take Biggest Hit in 2008

Is the old adage—what goes up, must come down—true in regard to law firm profits?

Law firms facing the most difficult 2008 could be those with the highest profits, a law firm consultant told the Recorder (sub. req.). The big earners, particularly those with niche practices, could be at risk because they “tend to have a little bit more volatility in their performance,” said Danilo DiPietro, client head of Citi Private Bank Law Firm Group.

Three law firms reported revenues of above $2 billion in 2007. They are DLA Piper; Latham & Watkins; and Skadden, Arps, Slate, Meagher & Flom. Latham & Watkins was among the big firms reporting a recent slowdown in work in a recent article in the Wall Street Journal.

Richard Gary, a principal of Gary Advisors who was formerly the chair of Thelen Reid & Priest, warned of tough times ahead. This is going to be a challenging year," he told the publication. "The word right now is caution."