The Top 100 : Seven L.A. Law Firms Among Biggest in U.S.

“L.A. Law�--the series--has done well in the television ratings. And L.A. law firms--in real life--have performed rather nicely in the financial ratings.

Seven Los Angeles firms--one more than last year--showed up on American Lawyer’s list of the nation’s 100 largest law firms ranked by gross revenue in 1987. The highest ranking local firm, Gibson, Dunn & Crutcher, with $190 million in revenue, ranked fourth among the nation’s largest law firms.

The survey by American Lawyer, published in the trade magazine’s July-August issue, also shows that the largest Los Angeles firms as a whole grew faster than the national average. The gains were made despite stiff competition from firms based elsewhere that have opened offices in Los Angeles in recent years.

“There is increased competition from East Coast firms moving into the city,� said Margaret Morrow, president of the Los Angeles County Bar Assn. “We are a very attractive market right now . . . and because there are more lawyers in the city, it’s tougher to generate the revenue and make a profit.� But, she added, “Most firms in the city are doing quite well.�

Nationwide, the 100 largest law firms reported revenue of $7.2 billion in 1987--a 20% increase from 1986, according to American Lawyer. Apparently, the stock market crash last October had no lasting effect on the law firms’ fortunes, the magazine said.

In fact, Wall Street merger and acquisition specialist Skadden, Arps, Slate, Meagher & Flom topped the magazine’s list with $290 million in revenue.

The Los Angeles law firms that were ranked for 1987 and 1986 showed a 23.2% year-to-year gain in combined revenues. The six firms posted combined revenue of $667 million in 1987.

Besides Gibson Dunn, the only other Los Angeles firm to place in the top 10 was Latham & Watkins, which placed eighth with revenue of $153 million. Locally, Latham & Watkins overtook O’Melveny and Myers--ranked No. 12 nationwide--as the area’s second-largest law firm.

Latham & Watkins was also the only Los Angeles firm to place among the top 10 firms with the highest revenue per lawyer--an important gauge of a law firm’s financial success. Latham & Watkins placed eighth, with its 314 lawyers contributing an average of $415,000 in revenue.

The firm has benefited from its involvement in the merger and acquisition business, says George Vandeman, a partner and member of Latham & Watkins’ executive committee. “A lot of our growth has been driven in recent years by our activity nationally in the deal business,� Vandeman said. Some of the firm’s clients include such firms as Drexel Burnham Lambert and Kohlberg Kravis Roberts & Co.

The new Los Angeles firm to show up on the list was Sheppard, Mullin, Richter & Hampton, with $50.5 million in revenue.

In San Francisco, Pillsbury, Madison & Sutro remained as the city’s largest law firm, with revenue of $116 million. The firm ranked No. 19 nationwide.

LEGAL MONEY

Top-Grossing U.S. Law Firms

Revenue Firm City Lawyers (millions) Skadden, Arps, Slate, New York 830 $290 Meagher & Flom Jones, Day, Reavis & Pogue Cleveland 746 211 Baker & McKenzie Chicago 920 196 Gibson, Dunn & Crutcher Los Angeles 493 190 Davis Polk & Wardwell New York 338 180 Shearman & Sterling New York 412 180 Sullivan & Cromwell New York 318 159 Latham & Watkins Los Angeles 368 153 Cravath, Swaine & Moore New York 270 151 Morgan, Lewis & Bockius Philadelphia 590 151

Top-Grossing L.A. Law Firms

‘87 Revenue ’86 Revenue Law Firm (millions) (millions) Gibson, Dunn & Crutcher $190 $156 Latham & Watkins 153 121 O’Melveny & Myers 144 127 Paul, Hastings, Janofsky & Walker 75 58 Irell & Manella 52 40 McKenna, Conner & Cuneo 52 39 Sheppard, Mullin, Richter & Hampton 50 unavailable

Top L.A. Law Firms: Revenue Per Lawyer

Law firm ’87 Revenue ’86 Revenue Latham & Watkins $415,000 $410,000 Gibson, Dunn & Crutcher 385,000 335,000 O’Melveny & Myers 380,000 340,000 Irell & Manella 355,000 315,000 Paul, Hastings, Janofsky & Walker 285,000 280,000 Sheppard, Mullin, Richter & Hampton 240,000 unavailable McKenna, Conner & Cuneo 230,000 205,000

Top-Grossing San Francisco Law Firms

‘87 Revenue Law Firm Lawyers (millions) Pillsbury, Madison & Sutro 402 $116 Brobeck, Phleger & Harrison 310 87 Morrison & Foerster 279 71 Orrick, Herrington & Sutcliffe 209 59 McCutchen, Doyle, Brown & Enersen 185 57 Lillick, McHose & Charles 226 55 Graham & James 228 52 Thelen, Marrin, Johnson & Bridges 231 52 Heller, Ehrman, White & McAulliffe 183 51 Pettit & Martin 211 47

Source: American Lawyer