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Powered by healthy revenue gains and even higher profit increases, 14 California firms landed on American Lawyer magazine’s list of the Second Hundred largest firms in the country.
Chart: California Firms in the Am Law 200

Nine of the 13 firms from last year’s list moved higher in the revenue rankings. Gordon & Rees made the list this time, with $93.5 million in revenue putting it at No. 189. Two firms from last year’s list � S.F.’s Howard, Rice, Nemerovski, Canady, Falk & Rabkin and Southern California’s Lewis, Brisbois, Bisgaard & Smith � fell off the chart. Fueled by big wins and big deals, the California 14 averaged a 14.7 percent increase in profits per partner, well above the national average increase of 10.5 percent at other Am Law 200 firms. Overall, the Bay Area firms’ relative performance was better than the previous year. Three of the five local firms on the list moved up, whereas in 2003, four of five local firms slipped from the prior year. Fenwick & West, which fell 12 spots on the 2003 list, saw the greatest jump among Bay Area firms. With a 14 percent revenue increase in 2004, the firm skipped ahead six notches to No. 131. The firm’s profits per partner make it the 53rd most profitable firm on the Am Law 100 and 200 lists. “We were in the same range several years ago,” said Fenwick Chairman Gordon Davidson. He said the firm’s jump was less extraordinary and more a return to normalcy. “We view 2003 as an anomaly.” That year, the firm paid rent on empty Palo Alto space for six months after moving to Mountain View. Davidson said Fenwick prospered from greater activity in M&A and litigation in 2004. Of the other Bay Area shops in the Second Hundred, Littler Mendelson hopped one notch to No. 108 and Townsend and Townsend and Crew jumped one to No. 183. Sedgwick, Detert, Moran & Arnold dropped four notches to No. 137. Sedgwick and Townsend were the only two California firms on the list to post decreases in revenue per lawyer. Townsend was the only firm that saw profits per partner decrease. In Southern California, six of the nine firms jumped up the chart, with Irell & Manella landing at No. 101 � one place shy of the Am Law 100 list. Others making revenue bounds included Quinn Emanuel Urquhart Oliver & Hedges, which cranked up 20 spots to No. 125; Knobbe, Martens, Olson & Bear, which jumped 10 notches to No. 188; and Loeb & Loeb, which hopped 7 steps to No. 161. “The IP litigation department was very, very successful last year,” said David Siegel, managing partner at Irell. “It explains our rise over the years.” Most eye-popping with the Southern California firms were the jumps in profits per partner and revenue per lawyer. Quinn Emanuel boosted partner profits 38 percent to $1.9 million, making it the 12th most profitable of the Am Law 100 and 200 firms. Irell’s average profits per partner were $1.5 million, making it the 18th most profitable Am Law firm. Its revenue per lawyer is higher than all but seven Am Law firms. Overall, however, the average profits per partner at Second Hundred firms � $566,000 � significantly trail the $959,000 average at Am Law 100 firms. According to American Lawyer magazine, the gap has been growing consistently, albeit slowly, since at least 2001, when the difference was about $323,000. More than a third of the Am Law 100 firms had profits per partner above $1 million in 2004, compared to just 13 firms in the Second Hundred. Three of the Southern California firms slipped on the Am Law 200 chart, two of them substantially. Allen Matkins Leck Gamble & Mallory dropped nine notches from No. 161 to No. 170, and Luce, Forward, Hamilton & Scripps fell 12 rungs from No. 186 to No. 198. Jeffer, Mangels, Butler & Mamaro fell one slot to No. 182.

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