Many large law firms have witnessed significant, repeated short¬falls in real results compared to budgeted net income from 2007 through 2011. During this period, as enterprises, many firms delivered stagnant or reduced income pools to distribute to their partners, but generated upward reported returns to “partners” through unprecedented cost cutting, salaried attorney and staff dismissals, equity partner de-equitizations, revoked job offers to new law graduates, deferred start dates for new associates, cancelled summer clerk programs, reconfigured equity partner income allocations with widening spreads between highest and lowest paid partners, and aggressive lateral hiring and acquisitive mergers to build gross revenue. (Predatory growth may look “healthy,” but often the costs associated with it can outweigh the short term returns.) And it doesn’t end there.
Was anybody keeping copies of annual budget and forecast income memos, taking notes and comparing management’s promises to actual results for these past five years?
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