Now in Legal Rebels:
Posted Mar 11, 2010 06:35 pm CST
Equity partners at the nation’s top law firms didn’t have to take much of a financial hit last year, thanks to layoffs of associates and staffers.
Legal consulting firm the Zeugheuser Group crunched the numbers, charting financial results reported as of March 1 for 52 of the nation’s top 100 law firms and 15 firms in the second 100. The American Lawyer collects the results and publishes them as they trickle in.
Zeughauser’s findings (PDF): Profits per equity partner dropped an average of only .8 percent at the top law firms, while their gross revenues dropped an average of 3.8 percent.
The results were even more impressive at the 15 law firms in the second 100. Their profits per equity partner jumped an average of 9.8 percent and gross revenues jumped an average of 2.3 percent.
The law firm reporting the best profits per equity partner, as of March 1, is the newly named Quinn Emanuel Urquhart & Sullivan, with $3.1 million in profits per equity partner, according to Zeughauser’s chart.
Next in line are Paul, Weiss, Rifkind, Wharton & Garrison, with $2.69 million in profits per equity partner, and Cahill Gordon & Reindel, with $2.5 million in profits per equity partner.
Zeughauser attributes the better than expected financial results to cost cutting, achieved mostly through reduced headcounts. The strong performance of the law firms in the second 100 suggests continued migration of legal work from firms with higher billing rates to those that charge less per hour, the consulting firm says.
One law firm that didn’t make the cutoff for the Zeughauser chart is Weil, Gotshal & Manges. The law firm had nearly flat revenue and only 1.8 percent increase in profits per equity partner, the Am Law Daily reported earlier this week.
Gross revenues were $1.233 billion, an increase of only .18 percent. Profits per equity partner were $2.3 million. The Am Law Daily said the results are “slightly surprising” because Weil has a strong bankruptcy practice.
Executive partner Barry Wolf told the Am Law Daily that the firm hasn’t yet collected for some of the high-profile bankruptcy work it has done. He also points out that the restructuring group is only “100 lawyers out of 1,250, so we clearly feel the impact in certain of our other practices.”