Eye-Popping Profits At Latham & Watkins

Last year was a very good year for Latham. How good are we talking?

Associates at Latham & Watkins were generally very happy about the big bonuses their firm announced last month. The bonuses reflected another successful year of LW servicing major clients around the world. As one Latham partner told us, “Latham had a very good year in 2014, with all departments firing on all cylinders, and we were happy to roughly double our total bonus pool from 2013, and share with our very hard working associates.”

Of course, even after the generous bonuses, the Latham partnership still did very well for itself. Here’s a report from the American Lawyer:

Latham & Watkins recorded double-digit increases in all major financial metrics in longtime leader Robert Dell’s final year as global chair of the firm.

In 2014, gross revenue surged more than 14 percent to a record-high $2.6 billion, revenue per lawyer jumped 12 percent, to nearly $1.25 million, and profits per partner soared 16.5 percent, to $2.9 million. Perhaps most impressively, net income rose nearly 21 percent, to $1.325 billion. As a matter of comparison, Latham added $228 million in net income last year, which is close to the equity profit pool of Cahill Gordon & Reindel in our 2014 survey. It’s also nearly double the net income of Latham in 1994, the first year of Dell’s reign.

Congrats to Latham on these tremendous results, and congrats to Bob Dell on an amazing 20-year run.

What do Latham’s great results mean for the rest of us? Truth be told, part of me worries that we’re reaching the peak of another economic cycle. As I wrote back in 2013, working at LW “can be like riding a roller-coaster: it expands like crazy and mints money during good times, then conducts massive layoffs during bad times.”

If we are now in the “minting money” stage of Latham’s life cycle, can the Lathaming be that far behind? Note the comment by new global chair William Voge that LW, despite being super-busy, still has “excess capacity.” Today’s “excess capacity,” tomorrow’s layoff victims.

But maybe I’m being a worrywart. Readers, what do you think? Where are we in the economic cycle? Is it time to unload equities and invest defensively, or is there still some gas left in the tank?

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The Am Law 100, the Early Numbers: Latham Gives Bob Dell a Spectacular Sendoff [American Lawyer]

Earlier: Associate Bonus Watch: Latham & Watkins Weighs In

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