Biglaw, Partner Profits

2010 Numbers Are In: Biglaw Profits Up, Bodies Down

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Profits per partner numbers are out and they confirm what we’ve all suspected: 2010 was a really good year to be a Biglaw partner. The Am Law 100 reports that 2010 PPP rose 8.4%. That’s a significant improvement over 2009, when PPP rose only 0.3%

Kind of makes you wonder what the hell firms were thinking when they initially tried to give the same crappy 2009 bonus in 2010.

Gross revenue also went up 4% (kind of — more on that below), that’s compared to a 3.4% decrease in revenue in 2009. However you crunch the numbers, Biglaw had a better year in 2010 than it did in 2009.

If you managed to stay in Biglaw. Some of these gains can be traced directly to Biglaw’s willingness to shed people, including equity partners, in order to keep the numbers up…

Dealbook reminds us how cold PPP calculations can be:

But firms achieved their increases largely through cutting their ranks, and that is where the picture darkens.

The lawyer headcount at firms on the list fell 2.7 percent, the largest drop since the magazine began its rankings. All told, there were 83,513 lawyers at the firms.

And the number of equity partnerships, once considered the coin of the realm and sacrosanct, declined 0.9 percent in 2010, atop a 0.7 percent drop in 2009. Firms in the bottom 50 on the list were the most aggressive, cutting their equity partners at a rate nearly five times that of the firms in the top half of the list.

“It does seem to be a watershed change to me that law firms are so willing to do this,” [Am Law editor Robin Sparkman] said. “I think that’s a big change.”

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There is other funkiness in the numbers. From Am Law:

It’s also critical to note that much of The Am Law 100’s revenue growth came from two giants—DLA Piper and Hogan Lovells, a pair of vereins whose worldwide revenues are being included in The Am Law 100 for the first time, because of a change in our methodology. Leaving out those two anomalies, The Am Law 100’s average revenue went up a meager 1.4 percent.

Apparently, DLA Piper’s Bangladeshi offices make everybody look good!

Biglaw has certainly gotten leaner, it has probably become meaner, and it’s found its way back to profitability. Congratulations, profitable partners. Let’s not all try to clutch onto their coattails at the same time.

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The Am Law 100 2011: Back in Black [Am Law Daily]
Big Law Firms’ Profits and Revenues Rise in American Lawyer Survey [Dealbook]

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