US firms push profits by reducing headcounts

Profits per partner rose by 8.4 percent last year, after a flat 2009 and a 4.3 per cent drop in 2008. But while this growth in profits can be partially explained by economic recovery, much of it was attributable to cutting head count – even among partner ranks. The American Lawyer's 2011 Am Law 100 report, which tracks law firms' financial performance, has reported that US lawyer headcount fell 2.7 percent in 2010 "Previously," says Robin Sparkman, The American Lawyer's editor-in-chief, "firms closed offices, shed support staff, and cut back on perks. Now they've taken an ax to some of the senior lawyers, too." Topping the Am Law 100 in profits and revenue per lawyer was Wachtell, Lipton, Rosen & Katz, which reported profits per partner of $4.35 million, across 84 equity partners, and revenue per lawyer of $2.29 million.

US firms push profits by reducing headcounts businessweek.com Mon, May 2, 2011