Profits

Many law firms are experiencing increased revenues and profits.

Profits-per-partner, which has become a benchmark of firm performance in recent years, could eclipse $1 million in 2004 at six firms either headquartered or originally started in Los Angeles. In 2000, not one L.A. firm reached that level.

The question is why these large law firms experienced such increases in profits? The answer is multi-fold. Increased focus on cost-cutting; reduction in equity partners’ ranks (with increased number of income or contract partners); alternative value or contingency engagement agreements where the law firms benefitted by outstanding results; and substantial growth in clients and/or clients legal needs. These are the primary reasons for profit growth.

… and lawyers increased attention to The Business of Law. See our book of the same title which has been called “The Bible of running a law practice,” and continues to receive critical acclaim for the benefits lawyers and lawyer firms receive from reading it.

All these factors result in better economics for the lawyers involved.

Categorized in: Cash Flow - Finances