Twelve of L.A.’s biggest law firms reported that their profits increased in 2009, up from four in the previous year, a sign of a turnaround.
What’s more, attorneys and experts believe that increased activity in the fourth quarter signals even better times ahead for the local law industry.
According to the Business Journal’s annual ranking of law firms, Gibson Dunn & Crutcher LLP and Sheppard Mullin Richter & Hampton LLP saw single-digit increases in profits per partner and higher revenue. Latham & Watkins LLP reported increased profits but lower revenue.
Profits per partner – a common way to measure a law firm’s financial performance – declined at Quinn Emanuel Urquhart Oliver & Hedges LLP; revenue was down as well. Quinn Emanuel, which in 2007 became the first L.A. firm to hit $3 million in profits per partner, reported its first decline in profits since debuting on the Business Journal’s annual ranking of law firms in 2005. Nevertheless, the firm’s profits remained above the $3 million mark and it retained its top ranking for profits.
O’Melveny & Myers LLP remained the largest firm on the list; profits declined there as well. Two other firms on the list reported that profits fell. In all, 34 of L.A.’ 50 biggest law firms did not report profits.
Two firms on the Business Journal’s list, Gibson Dunn and Sheppard Mullin, are examples of the turnaround.
Gibson Dunn reported increases in both revenue and profits per partner thanks to some higher-profile cases and transactions handled by the firms’ attorneys. Profits per partner increased 1.6 percent, from $1.88 million to $1.91 million.
Attorneys in Gibson Dunn’s downtown L.A., Century City and Irvine offices represented Dole Food Co. in its legal fight with Nicaraguan banana workers who claim they were exposed to a pesticide that rendered them sterile. But in a key victory, the attorneys convinced a Los Angeles Superior Court judge to dismiss two of the cases against the Westlake Village fresh food giant based on evidence that they were part of a massive scheme to extort billions of dollars from Dole.
Chairman Ken Doran said his firm’s success on the Dole case led Chevron Corp. to hire Gibson Dunn to represent the oil giant in its battle over oil pollution in Ecuador.
“Some of the experiences that we developed and successes we had working closely with the Dole team have enabled us to take some of that experience to others,” Doran said.
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