Three down, but US firms defiant

Elite Wall Street firm Cravath Swaine & Moore has posted a 22 per cent drop in revenue per lawyer and an 8 per cent drop in profits per equity partner, according to The AmLaw 100, published by The American Lawyer this month.
However, despite the collapse of three US law firms this year – Brobeck Phleger & Harrison, Altheimer & Gray and Arter & Hadden – The AmLaw 100’s findings are not as apocalyptic as might be expected.
US law firms fared well across the board, with gross revenue for the top 100 practices increasing by 8.5 per cent. However, The AmLaw 100 points out that Wall Street and Silicon Valley suffered the most. Of the 15 firms where revenue per lawyer declined last year, seven were New York firms and two were Silicon Valley firms.
After Cravath, Cleary Gottlieb Steen & Hamilton and Debevoise & Plimpton were the New York firms which suffered the biggest drops in revenue per lawyer. California firm Wilson
Sonsini Goodrich & Rosati recorded the second-largest decline in revenue per lawyer, at 6.5 per cent.
Few of the big name firms posted sharp increases in profits per equity partner. Shearman & Sterling‘s strong showing (profits were up by 34 per cent) was more to do with the fact that 2001 had been an exceptionally weak year. The biggest slump in profits per equity partner came from the now defunct Brobeck Phleger & Harrison, which showed a decrease of nearly 37 per cent.
The AmLaw 100 also reveals that an increasing number of firms have pruned their equity partners. This has had an immediate effect on the bottom line: Boston-based Mintz Levin Cohn Ferris Glovsky and Popeo’s average profits per equity partner leapt by nearly 30 per cent, while its equity partnership shrunk by 12 per cent.
Overall, the size of the equity partnership declined or remained flat at 34 firms in the top 100.