JD Journal » gregory jordan

Revenue Down But Profits Up at Reed Smith

joshua — Thu, 28 Jan 2010 17:58:58 +0000

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.”

Reed Smith Asks Non Equity Partners for a Tithing

joshua — Mon, 16 Nov 2009 18:37:38 +0000

Render unto Caesar what is Caesar’s, or so the expression goes. Now Reed Smith is asking much the same of its non equity partners. Non equity partners are being asked to contribute as much as 15% of their base salary to the company or risk losing partnership status. Gregory Jordan, the firm’s chairman, had this to say about the plan. ““It’s about not just saying you’re a partner, but actually being one. It means something. It revolves around risk-sharing in the business.” Jordan defended the move, saying that it isn’t a means to get a quick cash infusion into the company, and going on to say that Reed Smith is having “a very strong year”.

A very strong year? That doesn’t square up with the history.

In March, Reed Smith laid off 100, 26 lawyers and 74 staff.

In May, Reed Smith cut all US associate salaries by 10%.

In August, Reed Smith cancelled on campus interviews at Fordham law at the last minute, prompting the school to ban Reed Smith from on campus recruitment for five years.

Last week, Reed Smith cut the salaries of incoming associates by 20% and lowered their billing rates for work done by new associates. This came two weeks after announcing a plan to move away from lock step.

If this is a very strong year, I would hate to see what things look like in a bad year.