The business press may be full of record profits on Wall Street but the mood among Manhattan’s top lawyers is decidedly more ambivalent, as Legal Week found during a recent tour of the city. Following a (sort of) record year in US M&A, some firms have seen substantial rises in both revenue and profits, meaning double-digit growth from some of Wall Street’s finest. But there are also many – mainly Manhattan-centric firms – that have only managed average profit rises of around 5%.
There are a number of obvious causes for the cautious current mood on Wall Street. Yes, the US enjoyed some of its biggest deals in 2006, but the total volume of deals has not risen dramatically. A handful of big-ticket private equity bids have bumped up average deal size, but the number of deals has remained largely static. In addition, the other key component of the US law firm model – litigation – is not firing on all cylinders, at least not by the notorious standards of the plaintiff bar.
