February 2, 2010 6:26 PM
THE AM LAW 100: Revenue, Profits Down at Dorsey & Whitney
Posted by Amy Kolz
2009 certainly wasn't a stellar year for Minneapolis-based Dorsey & Whitney. Gross revenue dropped 6.85 percent to $341,917,000 and profits per equity partner (PPP) dropped 7.1 percent to $613,984. But managing partner Marianne Short is sanguine about the results. While Dorsey's gross revenue might have suffered as a result of the global economic downturn, the same can't be said of the decline in profits. "No one likes to see their [profit] numbers go down, but it was not from losing clients, it was from investments in growth," Short says.
The 596-lawyer firm increased its ranks of nonequity partners by 17 percent, to 75. The increase came mostly from lateral hires in the firm's corporate and transactional practices. The additions resulted in a 16 percent jump in compensation to nonequity partners, to $25,459,300. "There was an intentional effort to attract corporate folks with big books of business during the recession, and we hope to take advantage of a stronger corporate group as we pull out of the recession," Short says.
Dorsey brought on five bankruptcy and restructuring partners in its Salt Lake City office last March. There were also hires in the corporate and transactional practices in Palo Alto, New York, Minneapolis, and London. The firm opened an office in Sydney, Australia, last April. And unlike competitors who withdrew offers or put associates on furlough, Dorsey brought in a class of 40-plus associates in the fall of 2009. Mitigating the growth in head count was the loss of nine equity partners through retirements: the firm's equity partner ranks declined by 4 percent.
The Minneapolis-based firm was also aggressive about cutting costs, trimming 8 percent of the firm's expenses in 2009. Dorsey cut 55 staff members last June and it reexamined everything from office leases to sponsorships. "The little pennies add up," says Short.
Nonetheless, the firm's revenue felt the impact of the global recession. Dorsey's revenue per lawyer dropped 8.7 percent to $573,686. The firm's corporate and real estate practices declined 8.6 percent and 20 percent, respectively, as a share of overall gross revenue. (Revenues from the real estate practice represented only 1.6 percent of the firm total in 2009.) Dorsey's international offices in London, Hong Kong, Shanghai, and Sydney, which focus exclusively on transactional work, also saw weak results, Short says. One bright revenue spot: the restructuring and public finance practices did increase revenue by more than 5 percent and 4 percent, respectively.
Litigation declined by 2 percent as a share of overall firm revenue, with regulatory affairs and labor and employment the strongest areas. "Litigation was not countercyclical for us in this recession," Short says. "We found we got cases in the door but that clients would say to get them resolved quickly because they had to focus on their business."
This report is part of The Am Law Daily's ongoing Web coverage of The Am Law 100’s 2009 financials. Results are preliminary. Final rankings and full results for The Am Law 100 will be published in The American Lawyer's May 2010 issue and on AmericanLawyer.com. The Am Law Second Hundred will be published in the June issue.
The final published results of last year's Am Law 100 rankings are available here.Make a comment