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."