Across the pond, financial news is bad, at least if you’re among the
top 10 "City" [read: London-HQ’d] firms. Profits per
partner are down almost 8% year over year, and there’s apparently no
sign of recovery from the obvious and understandable post-crash decrease
(they’re down over 16% from the peak).
Interestingly, the rest of the top 50 UK firms are doing well,
with profits per partner up a healthy 9% and revenues up 16%: The
top 10 saw their revenues decrease, on average.
The Legal Week article that
discusses this hypothesizes that the Top 10 prematurely thought the post-crash
clouds were parting and ramped up capacity (and expenses) accordingly,
but I’m not buying that explanation. Why would they bet wrong on
the economic cycle and the next 40 firms bet right? (Economic
jargon digression: Cyclical and seasonal trends are just that,
and are contrasted in the argot with "secular" trends which are long-term
and immune from cycles and seasons.)
With intellectual honesty I aspire to, the author implicitly admits
that being big cannot, in and of itself, mean misjudging the market: The
largest US firms with a serious UK presence saw average profits per partner
increase 10%.
