Posted Jan 15, 2010 03:08 pm CST
Updated: Revenue at the nation’s largest law firms dipped an average of 4 percent last year, but the news isn’t all bad.
Some law firm leaders tell the Wall Street Journal (sub. req.) that they are seeing an increase in litigation, public offerings and regulatory work. They are also seeing quicker payment on legal bills by corporate clients.
And partners who held on to their jobs won’t be suffering, since profits per partner remained flat in 2009 because of cost-cutting averaging 7 percent, a new survey has found. The survey of 50 of the nation’s 100 largest law firms was conducted by Citi Private Bank’s Law Firm Group.
The survey found flat partner earnings despite revenue drops of 4 percent last year, the Wall Street Journal says. Dan DiPietro, head of client relations for Citi’s law firm group, told the newspaper that law firms saved money by laying off both lawyers and professional managers, and by cutting travel and entertainment.
Cost cutting appears to have had a positive effect on profits per partner at one law firm, Locke Lord Bissell & Liddell, Above the Law reports. The law firm is reporting profits per partner of $979,000 last year, compared to $956,000 the year before, according to an internal memo obtained by the blog.
“We have previously predicted that, when the American Lawyer releases its data on profits per partner in 2009, we’ll see some declines over 2008,” the blog says. “But could our prediction be wrong? Is it possible that, owing to various cost-cutting measures—including, but not limited to, lawyer and staff layoffs—some firms will report significant increases in profit per partner in 2009? Quite possibly. Take the case of Locke Lord.”
Julie Gilbert, chief communications and marketing officer for Locke Lord, confirmed the partner profit figures in an e-mail to the ABA Journal. She says the firm is proud of such results in a challenging year. They were achieved not only by carefully managing expenses, she said, but also by focusing on key practice areas in demand, bringing in some outstanding laterals, and delivering legal services at a price that recognized clients’ difficult economic environment.
Yet another law firm—K&L Gates—has also posted an increase in profits per partner. It reported $861,000 in profits per equity partner, up from $855,000 the prior year, according to the Am Law Daily. Last year, the firm laid off 36 associates and pushed back the start dates of 80 new lawyer hires, but firm chairman Peter Kalis thinks there won’t be a need for similar action in 2010.
“With the cost-cutting we did, we feel pretty well-positioned and don’t see any further dramatic measures as necessary,” he told the Am Law Daily.
Updated at 12:45 p.m. to include the comment by Gilbert. Updated at 1:10 p.m. to include figures on K&L Gates.