Spokane Journal of Business

U.S. law firm cuts reduce staffing ratios, survey finds

Associate, paralegal, staff numbers decline to one of lowest levels since '80s

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In an effort to lower costs, U.S. law firms that responded to a survey by the New York-based National Law Journal said they cut staffing ratios for associates, paralegals, and support staff to one of the lowest levels seen since the 1980s.

The average ratio of associates to partners declined 8.2 percent, the average ratio of paralegals to all lawyers dropped 15.4 percent, and the average ratio of support staff to all lawyers fell 9.3 percent in the findings of the Journal's latest annual Survey of Law Firm Economics.

This year's survey "shows just how deeply the recession has affected smaller and midsized law firms around the country," says David Brown, the Journal's editor in chief.

"For the first time ever, we're seeing year-over-year declines in revenue per lawyer, expenses per lawyer, and compensation for senior partners," Brown says.

The survey, based on 2009 data, was conducted by ALM Legal Intelligence and reports on annual financial performance, compensation, billing rates and hours, and other data, pertaining mostly to firms with two to 150 lawyers.

In some of the survey's other findings, revenue per lawyer fell 0.2 percent to $412,220, expense per lawyer declined 4.6 percent to $159,521, and the average billing rate for senior partners increased 3.2 percent to $357 per hour, while the average fifth-year associate billing rate increased 0.5 percent to $219.

Meanwhile, average billable hours for senior partners declined 1.7 percent to 1,628, while average billable hours for fifth-year associates rose 0.6 percent to 1,811. Median total compensation for senior partners fell 1.7 percent to $322,813.

For the third year in a row, starting salaries for new graduates remained unchanged at $85,000.

The National Law Journal claims that its survey offers one of the most complete sets of economic statistics and financial data available about the legal profession. This year's survey contains information from 10,913 lawyers including 3,712 associates, 6,236 partners/shareholders (equity and non-equity), 608 active counsels, and 357 staff lawyers working in 187 law firms.

Data are presented nationally, by firm size, by geographic location, by practice area specialty, by population area size, by year admitted to bar, and by years of experience.

This year's survey also includes gender analysis for rates, hours, and compensation for the first time. A companion study, specifically for law firms with 20 or fewer lawyers, will be released this fall.

ALM Legal Intelligence offers detailed business information for and about the legal industry, focused on the top U.S. and international law firms. It says its online research Web service provides subscribers with direct, on-demand access to its extensive database of surveys, rankings, and lists related to law firms and the legal industry.

ALM Legal Intelligence is a division of ALM, a New York City-based integrated media company that provides specialized business news, research, and information, focused primarily on the legal and commercial real estate sectors.

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