Debevoise's Delicious Dough (But Beware, Biglaw Bigwigs: New York Dems Want Their Share)
Debevoise & 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 Law.com):
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 Law.com]
Debevoise results confirm blockbuster year [TheLawyer.com]
Earn $1 Million a Year? Assembly Democrats Will Seek a Tax Rise Just for You [New York Times]
(37) Comments
First to say Debevoise is the best NY Firm
Jeez. And the economy has been doing so splendidly with a Republican president. How ever shall we survive under Obama.
Economy has been recession free under Bush and tax cuts -- now when things are looking we bad, we should install Democrats and RAISE taxes.
The problem with raising taxes on "small minority" is that as long as 51 percent of people make less than you, you are "rich" and about to get tax hike.
The post doesn't say higher taxes are good or bad. It just says they are more likely to rise under a Democrat (including but not limited to Obama).
That is a factual matter, not an opinion.
I'm glad he answered the question we all had: "How will Lat use a post about Debevoise's PEP gains to bash Democrats/Obama?"
Long live the recession!
What in the world do the two halves of this story have to do with each other? It seems that the Debevoise news is simply used as a platform for (another) scare piece about higher taxes with no built-in legal angle.
This kind of thing is getting really annoying.
Wait, is this a legl blog?
There's a running tally of PPP results on Autoadmit: http://www.xoxohth.com/thread.php?thread_id=761861&mc=52&forum_id=2#9287118
Would people comment on whether Debevoise is similar to (legacy) Dewey Ballantine? If so, where can I send my resume now that DB is no more...?
PPP increased by **20%** in '07...
I don't want to hear any more bitching about overpaid associates.
Agreed 1:37. Has any major firm posted a decline in PPP, notwithstanding all the hand-wringing we saw when the associate raises were announced? PPP at Debevoise increases by about $500k -- now THAT is a raise -- and it's crickets. But pay an associate 20 grand more and it's a threat to western civilization. Yet I pormise you that the next associate raises, whenever they happen, will be followed by more wetting of panties by the same folks who complained this time.
12:56 - the economy has been recession-proof under Bush? Where would that be, on Earth-Two in the DC Comics Multiverse?
pimpleton
Five year plan my ass. If this passes, it's permanent. Once the Dems turn on the cash spigot they won't tun it off.
Throw in Obama's plan to jack payroll taxes to the stratosphere and put the top marginal rate back to 40%, and lawyers are looking at some truly massive tax hikes, assuming the dems win the election. Right now, it's looking like they may destroy themselves at their convention first. We can only hope.
Not that we need more progressivity, of course. The top 1% already pay 40% of all federal income taxes, while the bottom 50% pay next to nothing. And there you see the fruits of democracy -- convince 51 people to tax the living shit out of the other 49.
1:24 -
Yes, Debovoise is similar to legacy DB. You should send your resume to the new D&L. Best of luck, loser
You people are all idiots. You're all bitching about a 1% tax hike on income over $1M, i guess, because you all think you're going to make partner at one of the top 30 or 40 firms in the world. I can say this for sure, if all of the people complaining about this make partner, you won't have to worry about it anymore, because with 45,000 partner you'll dilute the PPP below $1M.
If you really cared about the money that much, just move your happy asses out of NY, where taxes are the highest anyway. I mean, you had to have known NY taxed the hell out of you before. That extra 1% on your taxable income over $1M doesn't really change the differential. If you make $2M your total tax bill will go from about 800K to 810K, not a big difference. And if you're reading and writing on this site, you don't make $2M, so try complaining about things that actually affect you
isn't LAT bashing Obama because he likes Hil-dog?
i have no problem taxing the truly wealthly like those making $1m a year.
also, wtf...all firms are posting double digit PPP growth last year. Some are doing 20%+. Why do they complain endlessly about raising associate salaries to keep up with inflation?
So, 2:16, as long as they aren't coming for me... I shouldn't say anything?
Ummm
If you tax more...and the government, ahem, does not make the most efficient use of the money, how is this better than lowering taxes and encouraging more spending? What useless programs and special interests will be spoon-fed this time? God forbid the money funds primary education or, heaven forbid, we only maintain enough nuclear submarines to destory the world 5x over instead of 10...and I was a hawk circa 2001.
I liked ATL when it was about legal gossip and more direct "law" work/life matters. I'm growing rather tired of your anti-progressive taxation rants as somehow connected to law firm life b.s. Clearly, anything that taxes rich people more will affect lawyers, because lawyers at big firms make mad loot. But that doesn't make it appropriate or interesting.
DP should now be the first to raise. Let's bring back the NY elite and quit this nonsense already where secondary markets earn NY/DC salaries.
hey, 2:33, you realize this is a state tax issue right? I didn't realize that the State of New York had a fleet of submarines.
1:58: I'm at D&L already.
Now who's the loser?
D&P is the shiznit.
2:35--I love how you lump DC with NY. NY should be in its own salary market due to COLA. Having lived in both, DC does not compare.
Debs to 190. It's just gone round internally.
12:58: That 51% theory has really stuck it to us, hasn't it? I mean, difference in marginal tax rates between $32,000 and $350,000+ is 10 percent! The horror!
3:28: agreed, but DC always whines when us NYers think we should be separated from them. I agree with you, but I was hoping to stave off the DCers from chiming in.
I find it funny that the JRetroMatch.com advertisement in the upper left of this thread reads, "one cent for one month."
Sitwell, you might be right except that most people making $32k are paying very little in taxes after deductions and credits -- most of which are not available to your $350k earner. The effective marginal rate on a gross salary of $32k is near zero.
i <3 debevoise!!!!!!!!!!
will you people please defer to your tax departments before making comments about tax policies like you do with every other bit of information that pertains to taxes. After gaining there approval, and only then, may you comment about how taxes effect either yourself, or the average person
thanks.
tax attorney: no.
Most NYers earning over a million a year are not lawyers. Wall street, private equity, hedge funds, actors, singers etc. make up the bulk.
Of course the top 1% pays more income tax than the bottom 50%. The top 1% actually has income.
You could slap a $1000/head no exceptions, regressive as hell poll tax on everyone in the country and the bottom thirty million people in the US would raise a "whopping" $30 billion - and starve to death.
You can't raise revenue from people who don't have any.
tax attorney: "their approval."