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LOS ANGELES — Unlike most of the California firms that have raised associate salaries, the firm that started it back in September — L.A.-based Irell & Manella — saw revenue and profits dip in 2005, according to figures provided by the firm Tuesday. The 200-lawyer firm said revenue declined 4 percent to $191 million. Profits per partner dropped 3 percent to $1.5 million. Irell and Paul, Hastings, Janofsky & Walker are the last of the major L.A. firms to report financial results.
Chart: LA Revenues

At Paul, Hastings, revenue was up 10 percent to $667 million, while profits per equity partner were up 13 percent, at $1.3 million. Average partner compensation — which includes pay for nonequity partners — was $1.2 million. “Our growth was fueled by across-the-board excellence and the benefits of an investment in a global platform,” Chairman Seth Zachary said. “We’ve seen tremendous growth in serving clients internationally.” The firm’s Asia practice kicked in work on a $1.3 billion global offering for COSCO, a Chinese shipping company, and represented GZI REIT, a $216 million real estate investment trust, in its listing on the Hong Kong Stock Exchange. There was also increased growth in work for Citigroup internationally. In 2005, the firm added 16 lateral partners and opened new offices in Milan and Palo Alto. The overall equity partnership dropped 6 percent to 191, a decrease Zachary attributes to retirements, and partners going part-time, which results in nonequity status. Many of the California firms that have reported earnings in the past month saw similar contractions of the equity ranks. Irell Managing Partner David Siegel said his firm was pleased to be able to hold on to the gains it’s seen in recent years. In 2004, Irell saw a 32 percent increase in profits per partner from the prior year, on a 13 percent jump in gross revenue. 2005 was a “catch our breath period after those significant increases,” he said. “We can’t report 30 percent growth every year.” The 2004 boost was partially a one-time result of improving collection and billing capabilities, he said. And while the firm significantly increased its contingency work in 2005, some of those possible pay-offs are yet to come, Siegel said. “It was by any measure a good year,” he said. “We’d like to see double digit growth continue but that’s maybe too much to ask.” Even with revenue per lawyer flat in 2005, Irell’s $955,000 is second only to Gibson, Dunn. Irell’s average partner compensation — it has no nonequity partners — is higher than all but three California firms. Updated charts with revenue, revenue per lawyer and average partner compensation for L.A.-based firms can be found at www.callaw.com.

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