Business of Law
Cravath and Davis Polk Boosted ‘09 PPP Without Cutting Attorney Roster
Posted Mar 22, 2010 4:54 AM CDT
By Martha Neil
There was good news from Cravath Swaine & Moore reported last week: The New York City firm saw its income increase in 2009 without resorting to the attorney roster reduction used by a number of competitors to boost profits during a difficult year economically.
Revenue at Cravath grew 7 percent to $569 million while profits per partner rose 8 percent to $2.7 million, reports the Am Law Daily.
Financial results at Davis Polk & Wardwell were similarly stellar, apparently fueled by the firm's success in winning work on big deals despite the overall decline of mergers and acquisitions, reports the American Lawyer. Revenue rose about 7 percent and PPP grew by an "astonishing" 10 percent, as partners took home average pay of nearly $2.1 million.
Fried Frank Harris Shriver & Jacobson reported a strong financial year, too, but at the cost of significant partner cuts. Despite a 13 percent drop in revenue for the fiscal year that concluded at the end of February, profits per equity partner rose by 6 percent to $1.3 million. The firm's attorney roster was cut by 100 or so between August 2008 and August 2009, and equity partner ranks were reduced by 14 percent last year, reports the Am Law Daily.
“We are very pleased with the year,” firm chairman Valerie Ford Jacob tells the legal publication. “It is the firm’s third most profitable year and we are on the right trajectory.”
Similarly, at Milbank Tweed Hadley & McCloy the firm counterbalanced a 3 percent revenue dip that saw annual income last year fall to $601.5 million with a decrease in its lawyer ranks. That and other cost-cutting helped the firm increase its profits per partner by 5 percent to $2.23 million, the Am Law Daily reports.
Meanwhile, other firms struggled to stay even amidst dismal global economy.
At Stroock & Stroock & Lavan, gross revenue dropped 5 percent to $263 million in 2009 and profit per partner was down 10 percent, to $1.067 million, reports the Am Law Daily.
Additional and related coverage:
ABAJournal.com: "Riding the Revenue Roller-Coaster: Income Down, PPP Up at Dewey and Dickstein Firms"
ABAJournal.com: "After a Disappointing Year, Howrey Plans to Axe Up to 10% of Its Partners"
ABAJournal.com: "Crunching the BigLaw Numbers: Equity Partner Profits Drop Less than 1%"