The Score

January 16, 2009 4:54 PM

Cadwalader Earnings Fell 40 Percent

Posted by Nate Raymond

When Cadwalader, Wickersham & Taft revealed its profit numbers this week, the numbers appeared better than expected. Profits per partner fell more than 30 percent to $1.88 million, a far cry from published rumors of a 50 percent drop. The firm appeared to have beaten expectations.

But the reality may be more subtle. Legal Week (with help from The Am Law Daily) reports that earnings at Cadwalader fell by 40 percent, based on the value of shares held by partners at the firm. In 2008, equity shares were worth around $240,000, compared to just over $400,000 in 2007. The highest value a share at Cadwalader has ever reached was $452,000 in 2006.

What that means for Cadwalader partners depends, of course, on how many shares they hold. As The American Lawyer reported in September, the best-compensated partners get 10 shares, while those on the lowest end of the scale get three. So based on shares alone, a junior partner on the low end took home only $720,000 in 2008, compared to $1.2 million in 2007, and $1.36 in 2006.

A partner on the high-end of the scale could have pocketed $2.4 million in 2008, a sum that pales in comparison to the $4.52 million he or she could have nabbed just two years earlier.

The news comes after Cadwalader watched seven London partners defect this week for Paul Hastings Janofsky & Walker. The firm also saw restructuring cohead and incoming management committee member Bruce Zirinsky leave for Greenberg Traurig earlier this month.

Cadwalader says its revenue in 2008 fell 13.8 percent to $506 million.

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