Latham & Watkins: confession
Latham & Watkins: confession" />The Lawyer is always happy to admit when it’s wrong. Last Friday we said Latham & Watkins’ revenues had fallen 20 per cent. Today the US firm revealed that, in fact, 2008 revenues fell just 4 per cent.
It seems we were also wrong about average profits. We said they were down around 14 per cent. Make that more like 21 per cent.
Naturally, Latham is putting a brave face on this hefty PEP reduction. Speaking to American Lawyer magazine, the firm’s chairman Bob Dell spun last year’s results as the “second-best year in the firm’s history”.
Second best? In a legal market as competitive as the US, it’s very dangerous to start talking about “second best”.
Instead of taking the huge drop in profits on the chin and pointing to the collapse of several of its core markets as the reason, Latham’s top management appears to be attempting to put a positive spin on the figures. Dell, incidentally, also said that the firm was “extremely proud” of its performance in 2008.
Well, the consensus at least in the US is that Latham is now poised to make some significant headcount cuts. As one New York recruitment consultant put it this morning, “They are going to have to let people go”.
According to KermaPartners consultant Friedrich Blase, “Latham is the most admired firm from a management perspective in the US, people look at them in awe”.
No doubt Dell’s sunny optimism will come as comfort to the lawyers and staff the firm surely must be about to inform no longer have a job at the firm.
What is certain is that Latham faces unprecedented challenges that will test the mettle of its management. As Blase adds, "we might all be surprised by what they decide to do."
Readers' comments (4)
Bill Able | 10-Feb-2009 4:51 am
Awe? Shucks
Why everyone is in awe of managers who have a 21% drop in profits in their second best year ever is anyone's guess.
Take a look at a more balanced firm like Weil Gotshal if you want to be in awe. Same global model but counter cyclical.
Latham will be firing and Weil will be hiring.
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Paul | 10-Feb-2009 8:43 am
calm down
Is it just me, or is The Lawyer getting more and more snide and patronising in its commentary, not just about Lathams but law firms generally?
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Bb | 10-Feb-2009 4:07 pm
jesus.
you've appalled me before, but this article really is a new low.
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Dude | 11-Feb-2009 1:37 pm
Problem at Lathams
Whatever way you look at it, a 20% profit drop on 4% less revenue is a problem. A real problem with costs in particular. There will be some really radical steps which will threaten the much-vaunted collegial Lathams culture. It has had a great run - and a lot of praise from the press (including The Lawyer). But now it's coming to an end. It's reasonable for journalists to point to that especially when they're confronted with PR guff that insults the intelligence of any observer.
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