Even though revenues stayed flat in 2013, the largest law firms in Washington saw varying profits, according to The Washington Post.
The law firm of Hogan Lovells reported that its profits rose by 12 percent in 2013. At the same time, Steptoe & Johnson saw its profit drop by 15 percent, 14 percent at Finnegan, Henderson, Farabow, Garrett & Dunner and 10 percent at Arnold & Porter.
“You see law firms focused on their management of space, of people. . . . Their overall cost structure is under a lot of pressure,” said Richard Alexander, managing partner at Arnold & Porter. The firm is downsizing its real estate in D.C. by some 100,000 square feet. It is moving to a new office by 2015. “The industry is going through some restructuring, and all law firms have been and will continue to address those issues.”
Arnold & Porter saw a revenue drop of 6 percent in 2013 and a profit drop of 10 percent. Its revenue came in at $686 million while its profit came in at $319 million.
“We think 2014 will continue to be a challenging year for law firms,” said Arnold & Porter Chairman Thomas H. Milch. “Many of our clients, the [in-house lawyers at companies], are under enormous pressure from their own management to control costs. They are, in turn, challenging their major law firms to be stringent about ways to control costs and come up with new and different kinds of fee arrangements. It’s made client service more of a key factor in the selection of law firms and deciding to give certain law firms more work.”
Three law firms posted gains in profit, revenue, growth and profit. Those three firms were Venable, Hogan Lovells and Crowell & Moring.
“From product liability to intellectual property to commercial litigation, each of those is really hitting their stride,” Venable co-managing partner Lindsay Meyer said. “Another area is the regulatory and legislative sphere. The regulators come whether the economy is good or bad. If you look at the broad spectrum we have in representing clients among all regulators — trade, privacy, [Food and Drug Administration] — all those areas were busy as well.”
“Our rates are not as high as some comparable firms, and that’s played to our strengths when clients are looking to work with outside counsel,” Meyer said. “We’re in an era now where you see more [requests for proposals] than you did several years ago. As a business, we are conservative and careful in that space.”
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