The bicoastal firm Thelen Reid & Priest has a lot to crow about. Fiscal year 2005 saw profits jump by a third, growth unparalleled since the firm was created in a 1998 merger. Both average billable hours and rates are up, and thanks in part to a $25 million contingency fee (recovered for the California Department of Insurance from Cr�dit Lyonnais), profits per partner rose from $589,000 to $848,000.

But with all the focus on profits, the firm’s managers seem to have overlooked a stampede for the door. Since February 2005 the firm has lost 17 partners — 14 from New York — several of whom contributed substantially to the firm’s bottom line, according to former partners. From a high of 154 lawyers in 1998, the firm’s New York office slid to 136 in 2003 and is now down to 84 (50 partners, 11 counsel and 23 associates), according to the firm’s Web site.