In one of the sharpest drops in revenue and profitability among Am Law 100 firms, Cravath, Swaine & Moore saw 2008 gross revenue fall 13 percent, while profits per partner tumbled 24 percent to $2.5 million, according to Am Law Daily's reporting.
The firm signaled last November that 2008 was a tough year, when it announced in an internal memo that it was cutting associate bonuses, and that the firm would not do as well as in 2006 and 2007. In 2007, Cravath's profits per partner had been $3.3 million, according to our Am Law 100 survey, second only to Wachtell, Lipton, Rosen & Katz. In 2006, PPP was $3 million.
Last year's revenue was $532.5 million, compared to $610 million in 2007.
The firm declined to comment.
The firm may have suffered more than some of its competitors because it is less diversified geographically: 97 percent of its lawyers are in New York, with the rest in a small London office. In past years the firm also enjoyed hefty premiums from M&A deals, but those bonus fees have become rare. Cravath also doesn't have a large bankruptcy group to offset the financial slowdown.
The results would have been worse if Cravath hadn't managed to cut overhead significantly. Its costs -- all expenses except partner income -- actually fell last year, despite an enormous summer associate class of 160 and a large first-year class of 110.
For related information, see The Am Law 100 - A Work In Progress, a chart tracking 2008 financials. Also see the final published results of last year's Am Law 100 ranking.
This report is part of The Am Law Daily's ongoing Web coverage of The Am Law 100s 2008 financials, bringing you our own reports and those from our sibling publications at Incisive Media. Results are preliminary.
Final rankings and full results for The Am Law 100 will be published in The American Lawyer's May issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.
This article first appeared on The Am Law Daily blog on AmericanLawyer.com.