Income: profits per partner in the 100 largest US firms rose by 9% across the board

Gross revenues across the 100 largest US law firms jumped 10% to $46 billion (£25 billion) last year, with the most profitable firm in the country requiring just seven lawyers to generate $10 million of partner profit, new figures have revealed.


Profits per partner across the board rose 9%, to an average of $960,000 per partner, and revenue per lawyer increased 8%, although total combined headcount for the firms grew by only 2%.


Wall Street giant Skadden Arps Slate Meagher & Flom maintained its position on top of the American Lawyer magazine's annual AmLaw100 survey, an 8.3% turnover rise taking it to $1.44 billion. It was followed by Baker & McKenzie and then Latham & Watkins, which leapfrogged Jones Day into third. Sidley Austin Brown & Wood, in fifth, broke through the $1 billion barrier.



Among the largest firms, Sullivan & Cromwell (up a place to tenth) achieved the biggest rise in turnover - 21% - together with a massive 32% rise in profits, while the recently merged Wilmer Cutler Pickering Hale & Dorr leapt into the table in 12th spot.


The two smallest firms in the top 100 by headcount are also the most profitable. Wachtell Lipton Rosen & Katz, with 197 lawyers and 80 equity partners, achieved a stunning 35% rise in profits per partner to $3.5 million, followed by Cahill Gordon & Reindel (242 lawyers and 60 equity partners) on $2.5 million.


Six other New York firms posted profits in excess of $2 million - Sullivan & Cromwell, Simpson Thacher & Bartlett, Cravath Swaine & Moore, Paul Weiss Rifkind Wharton & Garrison, Cadwalader Wickersham & Taft, and Davis Polk & Wardwell - while a further 25 from around the US topped $1 million.


Wachtells also headed a new table that aims to measure practices' efficiency in producing partner profit. While it needed just seven lawyers to generate every $10 million of profit, the second-placed firm, Sullivan & Cromwell, required 16.


The 'troubled' Coudert Brothers, which recently lost its entire London office to a rival firm, was clear at the bottom of this ranking, requiring 90 lawyers to generate $10 million of profit - Baker & McKenzie was next worst with 74. Coudert was also one of only four firms to see its income fall during 2004.


American Lawyer's editor-in-chief, Aric Press, said: 'The nation's largest law firms continued to demonstrate their amazing ability to convert revenue into compensation for partners. On average, 42 cents of every dollar that firms took in last year went to the firms' partners, a level of efficiency that most of their clients would envy.


'For the second consecutive year, revenue per lawyer, the key metric of law firm economic health, grew faster than head count. That hasn't happened in a decade and resulted from an unending flow of big-ticket litigation, the return of deals and finance, and slower growth in head count'.