Baker & McKenzie profits drop 17 percent

Baker & McKenzie LLP, the world's largest law firm by number of attorneys, said its average profits per equity partner fell 17 percent to $992,000, due to the recession.

Revenue for the Chicago-based firm's fiscal year, which ended June 30, declined 3.5 percent to $2.11 billion, the firm said today in a statement. That ranks it behind top-grossing U.S. law firms Skadden, Arps, Slate, Meagher & Flom LLP and Latham & Watkins LLP.

"Our 2009 fiscal year coincided with the most severe months in the current global economic downturn -- a challenging time for our clients and, therefore, for our firm," Baker & McKenzie Executive Committee Chairman John Conroy said in the statement.

Global demand for legal services is dropping and corporations are pressuring law firms to reduce fees. Many of the largest U.S. law firms fired junior attorneys and staff this year, and Baker & McKenzie joined firms such as Nixon Peabody LLP and Chadbourne & Parke LLP in cutting attorney salaries.

Baker & McKenzie has 3,900 lawyers in 39 countries, including the United Arab Emirates and China. Currency exchange rates contributed to the decline in the firm's profitability, according to the statement.

Baker & McKenzie has taken steps to contain costs, according to Conroy, while continuing to hire partners and invest in products to enhance its efficiency.

Average profit per equity partner at Clifford Chance LLP, one of the five largest U.K. law firms, fell 37 percent to 733,000 pounds ($1.2 million) for its fiscal year, which ended on April 30.

Skadden Arps, the top-grossing U.S. law firm for the 2008 calendar year, reported revenue of $2.2 billion, according to the American Lawyer, a trade magazine. Latham & Watkins reported revenue of $2.18 billion for 2008, the magazine reported.