The Score

February 23, 2010 5:58 PM

THE AM LAW 100: At Reed Smith, Profits Rise as Revenue Falls

Posted by Ed Shanahan

A falloff in demand, a 4 percent reduction in head count, and a lower conversion rate for overseas income led to a 3.8 percent dip in Reed Smith’s revenues for 2009, according to Am Law Daily sibling publication The Legal Intelligencer (paid subscription required).

The firm moved from $979 million in revenue for 2008 down to $942 million last year, the Legal Intelligencer reports.

However, the paper notes that the firm’s profit margin "jumped thanks to significant cost cutting measures that were partially realized in 2009. Reed Smith’s profits per equity partner (PPP) rose by nearly 7 percent from $938,000 to $1 million, which is back to the firm’s 2007 profit levels."

Revenue per lawyer (RPL) stayed flat between 2008 and 2009 at $660,000 and the average compensation for all partners grew 6.2 percent from $614,000 to $652,000.

Managing partner Gregory B. Jordan tells The Legal Intelligencer that the firm is expecting 2010 to be another tough year when it comes to bringing in revenue. While some of the cost cutting measures in 2009 were a one-time deal, Jordan says he would have to continue to closely manage expenses. At the same time, Jordan is looking to renew the firm’s focus on corporate and financial partner recruiting as some of the those practices show renewed signs of life.

This report is part of The Am Law Daily's ongoing Web coverage of 2009 financial results of The Am Law 100/200. 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 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; the Second Hundred results are available here.

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