The Score

January 30, 2009 5:26 PM

THE AM LAW 100: Sonnenschein's Revenues Inch Up, Profits Down 12 Percent As Partners Prep for Vegas Retreat

Posted by Ross Todd

Gross revenue up, profits down. It's a pattern we're getting used to here at The Am Law Daily, especially among the more expansion-minded law firms of The Am Law 100. Gross revenue at Sonnenschein, Nath & Rosenthal increased 2.9 percent to $492 million in 2008; profits per partner (PPP) took a hit, falling more than 12 percent to $804,000.

"It isn't the numbers or any one metric that drives us," says firm chair Elliott Portnoy when asked about the drop in PPP. "We're looking for scale and quality. We're confident we're going to meet or exceed our budget next year," he says. Portnoy points to the costs associated with last year's layoffs, both lawyers and staff, as a primary reason for the decreased profits. Last May, the firm was one of the first national law firms to announce widespread layoffs linked to the economic downturn.

Head count evened out by year's end when Sonnenschein surprised the market with its announced acquisition of about 100 lawyers from the dissolving Thacher Proffitt & Wood. Total head count (measured as of August 31, 2008) was flat at 608 lawyers; revenue per lawyer, which came in at $809,000, rose 2.9 percent.

On this last Friday in January, Portnoy was preparing for the firm's annual partnership retreat, taking place over two-and-a-half days next week in Las Vegas. More than 300 Sonnenschein partners and counsel are expected to come together in Sin City. And given the planned business meetings and strategy sessions, Portnoy says there won't be any time to explore the Strip. In fact, in light of the state of the economy, no recreational activities are planned. Still, Portnoy's outlook for the future is optimistic.

"[Last year] for us was a year of addressing some significant challenges faced by our clients, our competitors, and us. And by swiftly acting I think we positioned the firm for a very strong 2009," he says. "Having made the tough decisions last year, we're now aligned with our clients' needs."

Click here
for The Am Law 100 -- A Work in Progress, a chart tracking the numbers. The 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. In keeping with past practices, we do not reveal which firms cooperate in providing financial information and which do not.

Final rankings and full results for The Am Law 100 will be published in The American Lawyer's May issue and on The Am Law Second Hundred will be published in the June issue.

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Another bad year for Sonnenschein. They had a budget of $562 million for 2008 and came in well under that. Same thing happened in 2007 where they came in well under budget. You've got to wonder what more has to occur for the firm's partners to start questioning the effectiveness of management and the direction they are taking them.

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