US firms are struggling to increase profits – even though their lawyers are working longer hours than ever before and at higher than ever charge-out rates.
This was the finding of a survey of 483 US firms conducted by law firm management consultants Altman Weil.
Average billable hours logged last year by partners rose to 1,783 and by associates to 1,819. Average hourly rates for partners broke the $200 barrier for the first time, increasing by 6 per cent to $206 per hour.
But although gross revenue for the firms grew as a result, profits have increased more slowly. The survey blamed increases in the amount of fee-earning time written off, time left unbilled and costs of investing in new staff as the reasons behind the struggle to boost profits.
The Altman Weil survey contradicts the American Lawyer's annual survey of the top 100 US firms – published in July – which reported that the majority of US firms enjoyed double digit increases in both gross revenue and profits for the 1997/98 financial year.
But the most profitable firm by far was New York firm Wachtell Lipton Rosen & Katz, with average profits per partner at £1.37m ($2.2m).
Wachtells and Cravath Swaine & Moore, with average profits per partner of £1.1m ($1.79m), have a clear lead over their rivals in terms of profitability.