Reed Smith had revenue of $942 million in 2009, a four-percent decrease from 2008’s $980 million. But on the brighter side, efforts to reduce expenses resulted in profits per equity partner to rise seven percent to $1 million.
Global managing partner Gregory Jordan called 2009 “a very difficult year” for all law firms.
“For Reed Smith, this included layoffs and redundancies of staff and lawyers, in an effort to reduce the size of the firm to match the reduced need for our services, and other efforts to reduce our costs,” Jordan said in a prepared statement. “However, that was offset by our efforts to reduce expenses. Because of our focus on our long-standing client relationships, our work flow held up relatively well and our productivity increased.”
Other cost-cutting measures launched last year included reducing all US associates salaries by 10 percent; and in November, Reed Smith cut the salaries of incoming associates by 20 percent and lowered their billing rates for work done by new associates. Finally, Reed Smith asked non-equity partners to contribute as much as 15 percent of their base salary to the company or risk losing partnership status.
“It was a really tough year,” Jordan said. “Demand was way down, and we had to make a lot of tough decisions.”
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