March 3, 2009 9:06 AM
THE AM LAW 100: Munger Revenue and Profits Flat
Posted by Susan Beck
With law firms jettisoning associates like concrete blocks on leaky ships, the strategy of Munger, Tolles & Olson looks brilliant. The high-end litigation firm--which topped The American Lawyer’s A-List last year--has one of the lowest partner-associate ratios of any major firm: 88 partners and 88 associates. Last year that lack of leverage helped steady the firm’s financials. Munger’s revenue increased 1 percent, to $207 million, revenue per lawyer rose 3 percent to $1.17 million, and profits per partner stayed essentially flat, at $1.3 million. “Flat is the new up,” says the firm’s co-managing partner, Mark Helm.
“We’re happy that our model seems to do especially well in down years,” Helm says. “We’re not leveraged. In times like this we don’t have large groups of people looking for work.”
He adds: “People think we’re missing the boat some years because we’re not capitalizing on some of the big [booms]. We’re the little pig who built his house of bricks. When the wind blows, we’re doing okay.”
Munger’s practice is 80 percent litigation, but Helms says the firm’s lawyers aren’t overly specialized. The Los Angeles-based firm does significant intellectual property work for Rambus Inc., represents Universal Music Group, and has a long relationship working for Warren Buffett.
Helm points out that the firm didn’t raise its billing rates this year, adding, “We’re trying to stand side by side with our clients.” Unlike many firms, however, Munger didn’t freeze associate salaries: Associates did step up to their next pay grade. “We’re trying to treat associates well and get their loyalty,” he says.
Still, even the view from a brick house can be scary when the storm of a lifetime is roaring outside. Helm says the firm is preparing for a down year in 2009: “Everyone’s nervous about what will happen. This coming year will be tough.”
Click here for The Am Law 100 - A Work In Progress, a chart tracking 2008 financials. Final published results of last year's Am Law 100 ranking are available here.
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