Profits drop at world’s 100 biggest law firms
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Partner profits at the world’s largest law firms have fallen for the first time in seven years.
The average drawing of a senior equity partner at the biggest 100 law firms fell by half a percentage point to $1.59 million (£1.18m) — perhaps not enough to elicit widespread public sympathy, but enough to cause ripples of unease around law firm management committees.
Average profit per lawyer, which the researchers describe as a more accurate indicator of law firm health, remained more or less flat, slipping slightly to £317,000 (£234.500).
Combined revenue at the world’s biggest law firms rose slightly last year, although those gains could be wiped out by rising inflation rates in the UK and US.
The top-100 firms raked in $99.3 billion (£73.46 billion) in 2016, a 2.8 per cent increase on the previous year.
UK inflation was low during 2016, averaging 0.7 per cent. However, it has risen significantly in 2017 and now stands at nearly 3 per cent.
The position is less dramatic in the US, where inflation in 2016 averaged 1.3 per cent. But the rate is rising stateside as well, having hit 2.7 per cent in March and now standing at 1.9 per cent.
According to the league table compiled jointly by researchers at the Legal Week website and The American Lawyer magazine, Latham & Watkins, which is based in Los Angeles, is the world’s largest by revenue. It is significantly ahead of Baker McKenzie in second place.
DLA Piper, the transatlantic practice that was top of the global revenue table four years ago, has slipped to fifth position.
Between Baker McKenzie and DLA in the top five are Kirkland & Ellis, a firm headquartered in Chicago, and Skadden, Arps, Slate, Meagher & Flom, which is based in New York.