January 9, 2009 10:50 PM
THE AM LAW 100: Bay Area Firms See Profits Drop Up to 21%, Revenues Flat
Posted by Ed Shanahan
A tanking economy and frozen credit markets struck a double blow to Bay Area-based Am Law 100 firms in 2008, causing slower revenue growth and a drop in profits, according to The Recorder, a sibling publication of The Am Law Daily.
A declining demand for legal services and rising costs--including associate salary increases and expansion outlays--dragged down profits. Orrick, Herrington & Sutcliffe posted the biggest decline in profits per equity partner (PPP) at 21 percent, to $1.315 million. It was the first year in Ralph Baxter’s 18-year reign as chairman that Orrick’s profits fell, reports the Recorder.
Morrison & Foerster, whose gross revenue grew by only 2 percent (to $911 million) saw its profits decline by 13 percent, to $1.1 million.
"We saw almost two different years," said chairman Keith Wetmore. "There was the first half of the year, and as things turned markedly south with Lehman, we saw a slower pace, not a declining pace, for the second half that affected some practices significantly and some not at all."
The Recorder is reporting revenue and profits figures for seven Bay Area firms Friday; those numbers are available, with registration, here.
Revenue growth slowed to single digits, down from double-digit growth in 2007, for most firms. Revenue per lawyer was flat across the board, with employment firm Littler Mendelson posting the highest rise at 5 percent. The firm grew by 20 percent in 2008 to over 700 lawyers. Profits per partner rose by 3 percent to $435,000. The labor and employment firm saw the highest growth in revenue, which rose 15 percent (to $354 million), and profit, which rose 17 percent (to $121.3 million).
"We don't take anything for granted, nor do we take special delight in the challenges our friends and clients and other law firms are facing," said Littler president Marko Mrkonich. "We are fortunate to be in a space where there remains a high demand for our services."
Read The Recorder’s full report here.
LAW FIRM - GROSS REVENUE 2008 - % CHANGE FROM 2007
Morrison & Foerster - $911 million - +2%
Orrick, Herrington & Sutcliffe - $835 million - +8%
Cooley Godward - $552 million - +14%
Littler Mendelson - $354 million - +15%
Sedgwick, Detert, Moran & Arnold - $197.5 million - +5%
Fenwick & West - $196 million - +7%
Townsend and Townsend and Crew - $165 million - +13%
Click here for the final published results of last year's Am Law 100 ranking.
This is the first report in The Am Law Daily's ongoing Web coverage of The Am Law 100s 2008 financials, bringing you our own reports and those from our sibling publications at Incisive Media. Results are preliminary.
Final rankings and full results for The Am Law 100 will be published in The American Lawyer's May issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.
NOTES: Gross revenue numbers are for legal work only and exclude disbursements. They are rounded to the nearest $500,000. Head counts are full-time equivalents, as of August 31, 2008. To be eligible for The Am Law 100, a firm must maintain a plurality of its lawyers in the U.S.Make a comment