Back in 2021, New York Biglaw firms had a fantastic financial year that was characterized by money, money, and even more money. The year that followed, 2022, was markedly different. The post-pandemic business boom was over and many firms were left struggling. What did this mean for some of the most prestigious New York Biglaw firms in the business?
According to the American Lawyer, out of the 19 firms that they classify as New York firms, less than a handful were in the black. Yikes. Here are the details:
[O]nly four [firms] were in the black on revenue: Willkie Farr & Gallagher (13.1%), Schulte Roth & Zabel (8.1%), Proskauer Rose (6.1%) and Fried, Frank, Harris, Shriver & Jacobson (0.7%).
Skadden, Arps, Meagher, Slate & Flom and Debevoise & Plimpton held their revenue numbers from the previous year. Everyone else got a haircut.
The list gets smaller when looking at revenue per lawyer. Only three firms (Schulte: 8%; Paul, Weiss, Rifkind, Wharton & Garrison: 2.6%; and Proskauer: 2%) had positive gains in RPL last year (while Willkie did grow its revenue by 13.1%, its RPL was down 5.4%).
When looking at profits per equity partner, only one New York firm was up: Prosakuer (6.4%). That’s it.
It… does not get better from there. Twelve of these firms saw double-digit drops in their profits per equity partner, while five saw double-digit declines in their revenue per lawyer. Virtually all New York firms have transactions and capital markets to blame for their financial distress.
“In New York City, firms benefited from the financial markets,” said Alisa Levin, principal at New York-based legal recruiting firm Greene-Levin-Snyder Legal Search Group. “And when the financial markets go in the other direction, they’re going to be hurt.”
Janet Stanton, longtime legal consultant and partner and co-founder of Adam Smith, Esq., had a similar assessment.
“Those firms are dependent on the financial sector,” she said. “We all know that. It’s not like they did anything wrong.”
New York’s Biglaw leaders are “optimistic” about what 2023 looks like, but we’re eager to see how 2022 affected their placement in financial surveys. Stay tuned, because next month we’ll have analysis on the 2023 Am Law 100 ranking.
Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.