Partner Profits

2007: It Was A Very Good Year (For the Most Part)

pile of cash or money Above the Law Legal Blog.JPGWe linked to it yesterday in passing, but thought we’d draw your attention to it in a dedicated post. Check out TheLawyer.com’s report on the 2007 financial performance of the top 50 U.S. law firms (ranked by revenue):

The top 50 US firms last year generated a total of $46.8bn (£23.4bn) in revenue – an increase of more than 16 per cent on the 2006 total of $40.27bn (£20.14bn)….

2007 was one of the strongest on record for the majority of US firms, despite the turbulence that rocked the market in the summer and which continues to do so. The average profit per equity partner (PEP) at the leading group of US firms showed smaller, although still significant, growth. In 2006 the average PEP among the top 50 US firms was $1.55m (£842,391). Last year that rose by 11 per cent to $1.72m (£860,000).

Here’s the discussion of one of the most closely watched metrics, profits per partner:

Cadwalader Wickersham & Taft was second only to Akin Gump Strauss Hauer & Feld in terms of posting the biggest fall in PEP. The former was down by 6.2 per cent, although despite this drop it hung on to its place in the top five best performers on PEP overall, with $2.72m (£1.36m). Here, Wachtell Lipton Rosen & Katz remains out of reach of any other US firm with a PEP of $4.48m (£2.24m)

And what will this year look like? You already know the answer to that question:

Ward Bower of US legal market consultancy Altman Weil says the numbers confirm that 2007 was the best ever for top firms in terms of both productivity and profitability.

“Don’t expect to see that in 2008,” he added. “Some of those same firms are off 10 to 15 per cent on the revenue side for the first two months of this year.”

For additional data, plus a table of the top 50 U.S. law firms and their 2007 financial results, see here.
US top 50’s £46.8bn haul makes 2007 the best year ever [The Lawyer]
Magnificent ’07: The Lawyer US Top 50 2007 [The Lawyer]

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