AmLaw 100: How Phila. firms fared

he nation’s highest grossing 100 law firms saw declines in both revenue per lawyer and profits per equity partner last year for the first time since 1991, according to Thursday’s release of American Lawyer Magazine’s AmLaw 100. The annual list serves as the chief profitability metric for the legal industry.

The seven Philadelphia firms on the list posted mixed results. Dechert and Duane Morris were the only two to see a decline in gross revenue — the statistic by which firms are ranked. Four of the seven saw declining revenue per lawyer (RPL) and five suffered dips in profits per equity partner (PPP).

The most startling number was Ballard Spahr Andrews & Ingersoll dropping 24 percent in PPP, from $545,000 in 2007 to $415,000 in 2008. The firm also fell by 4.3 percent in RPL but increased gross revenue by 1 percent to move from 98 to 96 on the list. The firm could not be immediately reached for comment, but two of Ballard Spahr’s biggest practice areas are real estate and public finance — both of which have sagged industrywide due to the economic downturn.

Pepper Hamilton produced the largest profitability gains of the seven local firms. PPP was up 16.8 percent, RPL 4.5 percent and gross revenue 11.6 percent. Executive partner Robert Heideck said the firm actually had declining PPP in 2007 due to the costs of adding numerous lateral partners and opening two new offices but said those moves paid off in 2008. Pepper was one of only 12 firms on the list to increase its PPP by more than $100,000 (from $627,000 to $728,000). The firm moved from 88 to 82 on the list.

Heideck said the firm began to experience a “softness” in transactional practices during the fourth quarter and that has carried over into 2009. He said he does not expect to see as robust a performance this year but still believes the firm can turn a profit in an environment where large law firms lay off large numbers of associates and staff and search for other cost-cutting measures.

Blank Rome experienced a 4.7 percent decline in RPL (which was $610,000) — largest amongst the seven Philadelphia firms in the metric most used to measure financial performance. The firm also saw PPP drop by 11.3 percent to $590,000 and gross revenue by slightly less than 1 percent to $312 million. The firm’s ranking fell from 84 to 87.

Morgan Lewis & Bockius was the highest ranked Philadelphia-based firm, holding steady in the 12th spot. The firm increased its gross revenue by 8.5 percent to $1.12 billion and PPP by 1.4 percent to $1.45 million but saw RPL decline by 1.2 percent to $820,000.

Dechert fell from 25 to 28 as its gross revenue dipped 2.5 percent to $816 million. The firm’s RPL increased by 1 percent to $915,000, but its PPP dropped 8.7 percent after several years of astronomical growth. It still has the highest partner profits among Philadelphia firms by a wide margin — slipping to $2.14 million from $2.35 million.

Drinker Biddle & Reath moved up the list from 74 to 71, with a 7 percent gross revenue increase (to $382 million), as well a 3.4 percent uptick in RPL (to $615,000) and a 5.2 percent spike in PPP (to $605,000).

Duane Morris fell one spot to 71 from 72, as its numbers dropped across the board. Gross revenue fell by 2 percent to $382 million, RPL by less than 1 percent to $635,000 and PPP by 9.4 percent to $725,000.