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The fiscal 2000 profit picture was not exactly a rosy one for the top-grossing firms in Los Angeles. But that’s likely going to change this year. L.A. firms, arguably left in the dust when the dot-conomy boomed, may be on firmer ground now that tech has gone bust. The top Southern California firms report year-end financials later than Bay Area firms do, so a complete financial picture of the market isn’t yet available. But in preliminary queries, L.A. partners are calling 2001 a good year. California’s highest-grossing law firm, Latham & Watkins, for example, is expecting to log $770 million in revenue for 2001, a 20 percent increase over the $642.5 million the firm racked up in 2000, said one partner at the firm who spoke on the condition of anonymity. That should mean Latham partners, the first in the state to make more than $1 million in profits per partner, will step back over that mark. The firm’s profits per partner slipped to $990,000 in 2000. Meanwhile, Gibson, Dunn & Crutcher is expecting revenues to swell by 15 percent in 2001 to $540 million and profits per partner to increase by 13 percent, from $975,000 to $1.1 million, said a partner who also spoke on the condition of anonymity. “It’s the very wide business base the firm has a whole,” said Kathryn Coleman, another Gibson Dunn partner. “When corporate clients didn’t need us on the financial side, they needed us on litigation.” Paul, Hastings, Janofsky & Walker also expects to up its numbers. The firm grossed $388.5 million in 2000 and logged profits per partner of $775,000. The firm’s 2001-2002 fiscal year ends Jan. 31. “The numbers have been encouraging,” said Greg Nitzkowksi, Paul Hastings managing partner. “We’ve paid most of our expenses already for the year — so every additional $100,000 collected in January makes all the difference from a profitability perspective.” Sheppard, Mullin, Richter & Hampton is expecting a tidy 8 percent bump in profits. In 2000, Sheppard Mullin logged $51.5 million in profits. “Some people are going backwards, but we hit our budget really on all fronts,” said Robert Zuber, Sheppard Mullin’s executive director. Few are surprised to see that L.A. firms may land back on top in the state. More diverse geographically, the firms were slow to invest in the technology economy, instead catering to larger and sometimes more mundane clients. “They haven’t suffered the over-exuberance of the dot-com economy,” said Peter Zeughauser, a principal at law firm consultant ClientFocus in Corona Del Mar. Still, L.A. firms paid attention when Northern California started racking up the profits. “They have been challenged by the profitability of the Valley firms and as a result, they’ve had to work their numbers harder on expenses and now they’re bearing the fruits of that,” Zeughauser said. Susan Beck, a senior writer for Recorder affiliate The American Lawyer magazine, and Recorder reporter Brenda Sandburg contributed to this story. Senior writer Renee Deger’s e-mail address is [email protected]

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