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Orrick, MoFo suffer PEP falls at year-end

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.

13-Jan-2009

1:02 pm