TREND: lawyers told to enjoy unabated increase in demand for high-priced legal services


A squeeze on equity partnerships at the largest US law firms - a trend replicated in the big City practices - has led to more lawyers than ever before 'making megabucks', research has revealed.



The annual list of the 100 highest-grossing US firms by The American Lawyer magazine found that in 2006, for the first time, more than half of them (59) posted average profits per equity partner (PEP) in excess of $1 million (£500,000). However, only 25% of lawyers at these firms were equity partners - the lowest level reported since the survey's inception 22 years ago. Many of the most prestigious US firms do not have salaried partners.



Fifteen of the top 100 firms had profits of more than $2 million, and three had more than $3 million: traditional PEP leader Wachtell Lipton Rosen & Katz ($4 million), fellow New York practice Cravath Swaine & Moore ($3 million) and Washington firm Wiley Rein. Wiley burst into the table with record PEP of $4.4 million thanks to its role in the $613 million settlement of the NTP/BlackBerry case, for which it received $245 million in fees under a contingency arrangement.



Overall, the top 100 firms grew their combined gross revenues by 11.4% to $56.7 billion, while the average revenue per lawyer for the list reached almost $780,000 - an increase of almost 40% since 2000. Eleven firms had income in excess of $1 billion, with the US arm of DLA Piper squeezing over the line in 11th place. Skadden Arps Slate Meagher & Flom led the way as usual with income of $1.85 billion.



Aric Press, editor-in-chief of The American Lawyer, said: 'The remarkable financial record of these firms raises two questions about their futures. Can their trees really grow to the sky? And which partners will be around to enjoy the fruits?



'The demand for high-priced legal services continues virtually unabated. As does the pruning of partners who can't keep pace with the constant push for more profits. These are enviable times for big-firm lawyers. They should enjoy them while they last.'



Wachtell Lipton Rosen & Katz was the clear leader on the measure of how efficiently firms make profits. It takes just six of the firm's lawyers to generate $10 million, compared to an average of 29 across the top 100.



Neil Rose