February 13, 2009 5:40 PM
THE AM LAW 100: DLA Piper U.S. in Positive Territory for 2008
Posted by Michael D. Goldhaber
DLA Piper U.S.* reports a modest revenue rise of 3.8 percent, to approximately $1.178 billion, for 2008. Revenue per lawyer showed a similar result, rising 2.8 percent to $855,000.
"It was a good workmanlike year," says worldwide DLA chairman Frank Burch. "We feel very fortunate to have done as we did in a very difficult environment."
Profits per equity partner at DLA Piper U.S. increased a relatively impressive 6.4 percent to $1.297 million. However, that number is inflated by a decline in the number of equity partners (defined by The American Lawyer as those with less than 50 percent of their income guaranteed). The number of DLA U.S. equity partners decreased by 38, and nonequity partners increased correspondingly by 36. Burch says that these shifts reflect marginal reclassifications rather than deequitizations or departures. The reclassifications were a side effect of DLA's new capital contribution program for nonequity partners.
Yesterday, DLA Piper U.S. announced that it would cut 80 associates and 100 staff, not counting layoffs in the firm's international operations.
"The numbers we're announcing today show what happened in 2008," says Burch. "What we did yesterday has a lot more to do with predicting demand for 2009."
Burch predicts that profits will decline at most if not all major law firms in 2009. He says that DLA will be more cautious in lateral hiring. But he adds that the firm had a healthy balance sheet; the firm was unusual in having already built a meaningful presence in most of the markets where it wishes to be.
The DLA U.S. practices most exposed to the downturn were real estate, which generates about 15 percent of revenues, and corporate, which generates about 17 percent. DLA focuses on mid-market M&A, which may suffer less than big-ticket M&A. According to Mergermarket, DLA worldwide led all firms with 304 M&A deals in 2008; Burch says that number represents a decline of about 25 percent from 2007.
"We took the hard medicine yesterday," Burch says. We hope it's behind us. But it's not about us. It's about the market that we serve. We manage the firm based on what the market dictates. Our lawyers and staff understand that."
Meanwhile, at DLA Piper International, which was profiled in The American Lawyer last year, revenues rose 16.2 percent to approximately 585 million pounds. The firm will be releasing complete figures for DLA Piper International at a later date.
*DLA Piper is structured as a set of alliances, so the results reflect the U.S. operation only.
This report is part of 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.
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