Mary Jo White, Partner Profits, Tax Law

Debevoise’s Delicious Dough (But Beware, Biglaw Bigwigs: New York Dems Want Their Share)

Debevoise Plimpton LLP Above the Law blog.jpgDebevoise & Plimpton has long been among New York’s most prestigious law firms. It’s also widely viewed as an excellent place to work.
In the past, Debevoise’s prestige has arguably outpaced its profits. It’s often ranked more highly on the Vault 100 than on the Am Law 100 (when ranked by profits per partner). In the most recent rankings, Debevoise was #13 on the Vault 100 and #20 on the Am Law 100 by PPP.
Perhaps that’s about to change. From Legal Week (via

Debevoise & Plimpton has unveiled stellar financial results for 2007, with the New York law firm seeing both partner profits and fees climb by more than 20 percent over the last 12 months.

Profits per equity partner (PEP) at Debevoise rose by 26.5 percent from $1.81 million last year to a new high of $2.29 million. Global revenue, meanwhile, was up by 23.4 percent from $575 million in 2006 to $709.54 million.

A source who passed along this news added: “Although not mentioned in the article, several large investigations are the driving force behind these numbers.”
Of course, that’s not surprising. Thanks in large part to former U.S. Attorney Mary Jo White, internal investigations have long been a mainstay of Debevoise’s practice. They’re long-running and lucrative, since no company in deep doo-doo wants to look like it’s skimping on self-scrutiny. See, e.g., Siemens (aka Debevoise cash cow).
But how much cash will they get to keep? Discussion of a new tax proposal that will disproportionately affect partners at large law firms, after the jump.

If New York Democrats — to say nothing of Barack Obama — have their way, those Debevoise partners will have to fork over more of their dough to the tax man. From the New York Times:

The Democrats will introduce legislation next week that would impose an income tax increase of nearly 1 percentage point for the next five years on anyone who earns more than a million dollars a year. Democrats estimated that the plan could bring in $1.5 billion in the first year alone.

The plan is certain to run up against rigid resistance by the Republican-controlled State Senate and Gov. Eliot Spitzer, who has repeatedly pledged not to raise taxes.

But Democrats are hopeful that it can attract broad support because it would focus on a small group of well-to-do New Yorkers. Some 26,000 New Yorkers have incomes higher than $1 million a year; of those, about 4,600 earn more than $5 million a year.

Biglaw partners, beware. Sure, tax hikes are often political poison. But millionaires aren’t terribly sympathetic. Especially millionaires who also happen to be lawyers.
Debevoise Partner Profits Jump to $2.3 Million in 2007 [Legal Week via]
Debevoise results confirm blockbuster year []
Earn $1 Million a Year? Assembly Democrats Will Seek a Tax Rise Just for You [New York Times]

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