Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Am Law 100 firms all have high gross revenues, but when it comes to translating that money into payouts for equity partners, the similarities end. Average profits per partner among the firms vary widely, from a low of $410,000 at Littler Mendelson to a high of $4.945 million at Wachtell, Lipton, Rosen & Katz. Likewise, there was plenty of disparity in firms’ rates of profit growth, ranging from an increase of 42 percent at Cooley Godward Kronish to a decline of 17.6 percent at Howrey. (For The Am Law 100 as a whole, average profits per partner were $1.3 million, an 8.7 percent increase from 2006.) Here are reasons for some of the biggest changes in profits per partner among Am Law 100 firms in 2007: Windfalls A contingency fee resulting from the $65 million settlement of a patent suit against ImClone Systems Incorporated contributed to a 30.4 percent increase in Fish & Richardson’s profits per partner. (Revenue per lawyer went up 14.6 percent, too.) Even without that boost, firm president Peter Devlin says, profits would have been up 15 percent. The contingency sword cuts both ways: In 2006 Akin Gump Strauss Hauer & Feld posted a 34.2 percent increase in profits per partner, thanks in part to a $62 million contingency fee. In 2007 came the hangover: a decline of 6.9 percent, to $1.205 million. Firm chairman R. Bruce McLean says that when the 2006 award is stripped from the numbers, the result is a year-to-year increase of about 8 percent. New Digs When you trade up, you pay up. Relocation costs ate into Dickstein Shapiro’s bottom line: The firm moved into new offices in Washington, D.C., and Los Angeles and it expanded its space in New York. Profits per partner declined 6.9 percent, to $1.005 million. Howrey spent $20 million to open new offices in New York and Munich-money that managing partner and CEO Robert Ruyak says came straight from the profit pool, since the partnership decided not to fund the expansion through borrowing. In addition, the firm suffered in comparison to a strong 2006, when it collected bonuses on work done under alternative billing arrangements. The firm’s profits per partner slid 17.6 percent, to $1.005 million. Nice Work Debevoise & Plimpton’s transactions lawyers feasted on premium private equity work in the first half of 2007, while its litigators spent the year defending Siemens AG in a bet-the-company bribery case. The firm’s profits rose 26.9 percent, to $2.29 million; its revenue per lawyer increased 18.7 percent, to $1.2 million. Working Overtime (Or Not) Dorsey & Whitney’s profits rose 32.7 percent, to $670,000. Although the firm cut the size of its equity partnership by 4.5 percent and increased the size of its nonequity class by 17 percent, managing partner Marianne Short attributes the rise primarily to an increase in hours worked. “A lot of blood, sweat, and tears went into that number,” she says. Short says that the firm increased billing rates by an average of only 3 percent; she also acknowledges that the firm aggressively managed expenses. Revenue per lawyer went up 6 percent, to $620,000. Meanwhile, at Cadwalader, Wickersham & Taft, profits dropped 6 percent, to $2.725 million, while revenue per lawyer declined 9 percent, to $910,000. Gregory Markel, chairman of the firm’s litigation practice, says that after the mid-year credit crunch, work dried up in the firm’s structured and global finance practice. The firm has laid off associates and Robert Link left his post as chairman, although he continues as managing partner.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at customercare@alm.com


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.