Biglaw

Yes, You Can Increase The Number Of Equity Partners And Profits Per Partner At The Same Time

Mo' equity partners, mo' revenue.

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Biglaw is starting to report its yearly numbers to ALM as part of the annual Am Law ranking process, and that means we are getting a closer look at the financials at a bunch of firms. As it turns out, McGuireWoods had a pretty great year.

According to Law.com, profits per equity partner are up — an impressive 33 percent to $1.36 million. That’s at the same time that the firm increased its equity partnership by 7 percent (though the overall number of partners decreased, as nonequity partners made the move up). Overall gross annual revenue was $817 million last year, and revenue per lawyer was above $800,000. McGuireWoods seems to be bucking the trend of shrinking the ranks of the partnership and still has impressive financials.

Managing partner Tracy Walker chalks the bump up to investing in the people of McGuireWoods:

“Like everyone, we benefited from a strong economy, an increased demand,” Walker said. “I really wish I had a sexier story to tell you, but the real driver for us was our long-term investment in our people and in our firm.”

But as loyal ATL readers know, the “long-term investment” in associates did not include matching the new market scale of associate compensation the spent Biglaw this summer. But Walker says the sturm und drang over the salaries was much ado about nothing:

McGuireWoods decided to take a “go-slow approach” to associate salaries, Walker said, adding that he thought media attention to the associate salaries was “something of a tempest in a teapot.”

“We’ve made a number of adjustments to our comp system that are becoming effective in 2019, and both our salary and our bonus structure will be consistent and is consistent with our peer firms in all the markets that we serve,” Walker said. “And in the large city markets [it] is largely on a scale with or just incrementally behind the Cravath scale for our best performing associates.”

Regardless of where McGuireWoods chooses to spend its largess, it’s good for the industry to see another firm having a banner year.

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headshotKathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

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