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Just how powerful is Washington on the revenue Richter scale? This year’s D.C. 20 shows that revenue generated by local offices crossed the $5 billion threshold for the first time. That’s a billion-and-half dollars more than five years ago, but only a mild 4 percent gain over 2006. However, 2006 was a year when returns were bloated by massive contingency fees at Wiley Rein and Akin Gump Strauss Hauer & Feld — and this year’s D.C. 20 still surpassed those grosses, even without the contingency boost. The growth over five years has been impressive, no question. But it hasn’t allowed D.C. offices to muscle aside other markets when it comes to firmwide revenue. Dollars earned in Washington accounted for 37 percent of firmwide grosses at the D.C. 20 last year. The needle hasn’t moved much: In 2006, D.C. 20 firms earned 35 percent of their total gross in the Washington region. That said, Washington did prove fertile ground for several national players in 2007. Latham & Watkins, McDermott Will & Emery, and Skadden, Arps, Slate, Meagher & Flom each scored D.C. revenue increases of more than 20 percent. Skadden is now earning more than $347 million in Washington — and edging ever closer to No. 1 on our D.C. 20 list. Given the economy — particularly the dismal deal market — Skadden might not be on track to knock perennial chart-toppers Hogan & Hartson and Wilmer Cutler Pickering Hale and Dorr out of their one-two perch just yet. Hogan hit the top of the D.C. 20 this year, vaulting from No. 3 on the power of 12 percent revenue growth. As a bonus, Hogan scored the highest-ever gross revenue on the D.C. 20: $435 million. For its part, Wilmer held steady at No. 2, despite a slight dip in its D.C. gross from $395 million to $391.8 million. As expected, last year’s revenue champ, Wiley Rein fell sharply. This year, without its huge contingency fee, Wiley’s revenue declined 55 percent — and the firm slid to No. 20 on the survey. Wiley’s profits per partner, which set a record on the Am Law 200 last year when they hit $4.43 million, headed southward as well. It’s hard, however, to feel too much sympathy: The communications law powerhouse still generated profit per partner of more than $1 million. And revenue is also way ahead of the pre-contingency windfall. In 2005, Wiley earned $151 million. In 2007, the firm pulled in $181.5 million. Wiley’s stint in the Am Law record books was also short-lived. In its just-released Am Law 100 ranking, The American Lawyer, an ALM sibling, reports that New York’s Wachtell, Lipton, Rosen & Katz scored a dizzying profit per partner of $4.945 million. The magazine also reported major increases in firmwide revenue for the Am Law 100 in 2007 — overall grosses were up 13.6 percent. “For the first time, the firms showed five consecutive years of better-than-average growth in both revenue per lawyer, the key measure of law firm financial success, and profits per partner, the metric that has turned law firm managers into contortionists,” writes the magazine’s editor in chief Aric Press. But Press notes: “The great run may be over. The sharp decrease in deal activity is well-known. And the classic countercyclical practices — litigation and bankruptcy — have not yet lifted all boats. Also, there is a structural indicator that points to weakness. For the first time since the bust of 2001, the growth in head count noticeably exceeded the growth in RPL (in 2002, the two metrics essentially tied). Coupled to the body count was the much brooded-about associate salary increases last year. Many consultants argue that those costs will be fully felt this year, precisely when demand for high-priced legal help may fall.” In other words, here’s hoping your firm has put aside a pile of cash. It’s looking like a very rainy day.
David Brown is the editor in chief of Legal Times . He can be contacted at [email protected].

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