Washington law firms protect profits at all costs
Law firms in the Washington area in the US managed to increase profits for equity partners in 2010, In spite of flat revenue, by cutting expenses.
A study by the legal specialty group at Wells Fargo Wealth Management reports that profits per equity partner have risen 8.4 per cent during the first nine months of the year compared with the same period in 2009, and that salary costs were reduced by an average of 4.8 per cent.
Jeffrey Grossman, national managing director for Wells Fargo's legal specialty group, predicts that the tough times are not yet over: "I still see an industry that has overcapacity and we suspect further challenges, further timekeeper cuts and possibly further staff cuts. The bottom line is that firms are going to protect their profitability," he said.
In addition to layoffs, firms are also protecting profits by reducing reliance on outside counsel, offering alternative fee arrangements for price-sensitive clients and cracking down on the billing practices of their associates.
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