American Lawyer is out with its annual list of the nation's most profitable firms, and L.A.-based Quinn Emanuel Urquhart Oliver & Hedges finds itself in the midst of NY's legal goliaths. Quinn ranked fourth, with profits per partner in 2007 of $3 million. PPP is the law firm equivalent of a baseball ERA, and even though the measurement has been called into question over the years for distorting overall performance, it's still what the legal community uses to rank itself. Tops on this year's American Lawyer list is the NY powerhouse Wachtell, Lipton, Rosen & Katz, with PPP of $4.9 million, up almost $1 million from year earlier. Of the 100 firms in the survey, 64 had PPPs over $1 million. As for overall revenues, L.A.-based Latham & Watkins went over the $2 billion barrier. Of course, that was then. Many firms expect a much tougher 2008, especially those specializing in areas being impacted by the subprime disaster. A bunch of firms are already cutting back on the number of summer associates. From the magazine's main story:
The great run may be over. The sharp decrease in deal activity is well-known. And the classic countercyclical practices-litigation and bankruptcy-have not yet lifted all boats. Also, there is a structural indicator that points to weakness. For the first time since the bust of 2001, the growth in head count noticeably exceeded the growth in RPL (in 2002, the two metrics essentially tied.) Coupled to the body count was the much brooded-about associate salary increases last year. Many consultants argue that those costs will be fully felt this year, precisely when demand for high-priced legal help may fall.