Reed Smith has posted a 4 per cent drop in total revenue for the 2009 fiscal year.
Total revenue stood at $942m (£581m), down from $980m in 2008. The firm’s revenue per lawyer figure was static at $660,000 while average profit per equity partner (PEP) rose by 7 per cent from $935,000 to $1m.
Reed Smith’s global managing partner Greg Jordan (pictured) said that 2009 had been a “very difficult year” for all law firms, including Reed Smith.
“Global demand dropped substantially and firms had to make difficult decisions to deal with that,” Jordan added.
For Reed Smith those difficult decisions included redundancies of staff and lawyers as the firm shrank to match the reduced demand for its services.
Late last year Reed Smith also cut the starting salaries of many of its US associates from $160,000 to $130,000 (11 November 2009).
The firm also broke the lockstep remuneration system for associates, introducing a merit-based pay structure (28 October 2009).
Jordan said the firm’s reduction in revenue was offset by those efforts to reduce expenses. Work flow held up “relatively well”, he added, while overall productivity increased.
“We also saw the benefits of our diversification, with some practices in great demand balancing out others that weren’t,” he continued. “With all of that, we survived a difficult environment and improved our profits per partner by 7 per cent.”