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Saul Ewing has bounced back after a year of decline, reporting significant increases in all of its key financial indicators for 2006. The firm’s gross revenue grew by about 6 percent from $115 million in 2005 to $122 million last year. The firm’s profits per equity partner (PPP) rose 15.4 percent from $390,000 in 2005 to $450,000 in 2006, and its revenue per lawyer (RPL) grew by 8.3 percent from $480,000 to $520,000. The average compensation for all partners increased by about 14 percent from $355,000 in 2005 to $405,000 in 2006. Both the equity and non-equity partner tiers decreased in 2006, by 4.1 percent and 12.2 percent respectively. The firm went from 98 to 94 equity partners and from 41 to 36 non-equity partners. The overall headcount, as of the Aug. 31 deadline set by The American Lawyer, dropped by about 2.3 percent from 241 in 2005 to 235 in 2006. Firm Managing Partner David S. Antzis said that by the end of the year, the firm added about 20 attorneys through its October merger with Schmeltzer Aptaker & Shepard and another 15 new associates. He said the firm’s headcount is currently around 277 attorneys. In the last five years, Saul Ewing had reported considerable increases in all of its financial indicators with the exception of 2005′s financial performance. While there was a 1.8 percent increase in gross revenue from 2004 to 2005, the firm had a 1 percent decrease in RPL and a 4.9 percent decrease in PPP during that time. Antzis said contingency fee cases were the cause of that decline. The firm’s 2004 performance was so strong, he said, because there was about $10 million in fees paid from contingency-fee cases — a high number for the firm. If that number was leveled out with 2005, the firm would have been more consistent in its financial performance, he said. Bill Brennan of Altman Weil said larger law firms are increasingly looking to contingency fee cases, particularly in the big-money areas of mass torts and class action defense. Because over 90 percent of law firms work off of cash-basis accounting and contingency fee cases could have a three-year life span, Brennan said firm revenues can be distorted as expenses go out to pay for the cases and the revenue comes in years later. Antzis said the firm had no substantial contingency cases during 2006 that would have had any great affect on the firm’s financial performance. Read more about it in Monday’s Legal.

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