Pic: wiggum03 (flickr)
Cal Law has the numbers on the major Bay Area firms (a list that would have included Heller and Thelen in previous years). It ain’t pretty. Of the seven firms tracked, only Littler Mendelson (a labor & employment firm) was able to increase PEP – and that just by scratching out a 3% increase to $435,000.
Of the firms we’d consider BigLaw, it was particularly ugly. Orrick, which laid off 75 in November, saw PEP plummet precipitously, to $1.315 million, down 20% from 2007. That was despite an 8% increase in revenue to $835 million gross. On a per-partner basis, that left RPL flat at $855,000. Apparently, there was some combination of heavy increases in expense (probably in no small part the basis for the layoffs) and partners. Orrick did have the highest spread between RPL and PEP ($1.315 million vs. $855,000).
Morrison & Foerster had RPL of $875,000 (+2%) on gross revenue of $911 million (-2%), leading to PEP of $1.1 million (-13%). Those numbers seem to indicate the decrease in PEP is more a result of increased expense than dilution due to increased numbers of partners. How much more pain do you think MoFo partners will be willing to tolerate before they start thinking about layoffs?
The last of the firms in the article that meet our arbitrary BigLaw definition is Cooley Godward. Cooley had gross revenue of $552 million, which was a nice 14% growth rate. They must have picked up quite a few lawyers though (if I recall correctly, they picked up a few of Heller’s practice groups): RPL was flat at $855,000. Nonetheless, PEP was down 7% to $1.32 million, although that was the highest of the firms covered.
Perhaps it’s our east-coast bias, but we’ll skip Sedgwick, Fenwick & West, and Townsend and Townsend and Crew. Basically, they had PEP decreases of 2% to 4%.
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