Orrick, MoFo suffer PEP falls at year-end

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  • PEP and PPP at "All Equity" Partnerships??

    PEP is easily manipulated. There is probably a big difference between PEP and PPP at these two firms. A number of US firms proudly boast of being all equity partnerships, but then look to inflate the PEP figure by reducing the capital contributions from a large numbes of partners in the lower ranks. This exercise is driven by the AmLaw 100 definition of an "equity" partner -- which is different from the firms own definition.You need to look at PEP, together with PPP and the range and spread of equity to get a handle on how these firms are performing. Look for more PEP manipulation in the coming months by the demotion of more partners to the lower ranks "relieving" them from capital contributions.

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  • BSPEP Popped -- 2009

    Looks like 2009 could be quite savage!! The headline PEP figures are BS. Everyone knows the game. A "junior" partner in the Bay Area will be very lucky to take $400k home in 2009. Offer them $300- $350k and they would probably bite your hand off.

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  • 2009 Office Closures

    Two firms with two very different strategies. One has forged ahead with the international play. The other has basically admitted defeat and given up on expanding the empire. I expect they will close more offices in 2009 - cutting costs and headcount. Short term PEP preservation.

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  • Management by Subscription

    Yeah. It is amazing how some firms are managed. Herd the likeable deadwood into management, get them a subscription to the American Lawyer, Legal Business, Business Week and the Economist, and then let them spend 12 months trying how to work how to spin the PEP figure. It is only a matter of time before some of these firms implode under all the internal tension and politics associated with faking the PEP number.

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  • Bottom Feeders

    2009 will be tough for everyone, but particularly tough for the bottom feeders. High volume/low margin models will be under enormous pressure as volume disappears. This will force them to take a look at their international offices which have been carried through the boom years. Partners in California who will be taking a pay cut for the first time for a long time, will start making noises about "investments" in Asia and elsewhere.

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  • "Elsewhere" ?

    Anonymous said that

    "Partners in California who will be taking a pay cut for the first time for a long time, will start making noises about "investments" in Asia and elsewhere".

    It's strange, O London and Paris offices made respectively a +8% and +23% in 2008.

    Thank you Anonymous for your sharp analysis.

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