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PROFITS FOR NEW YORK LAW FIRMS REACH $3 BILLION AS COST CUTTING BRINGS BACK PROFITABILITY OF LATE 80'S

 NEW YORK, June 22 /PRNewswire/ -- After being buffeted by a severe legal recession which began about four years ago, New York's law firms have returned to record profitability.
 After seeing profits erode by some 6 percent between 1989 and 1990, firms today are reporting profits estimated at $3 billion -- the earnings level registered in 1989, the height of the legal services boom.
 According to an analysis of New York City tax data by The New York Law Journal, heightened profitability has come largely as a result of a drastically downscaled legal services industry coupled with strict cost containment policies at many of the City's firms.
 The New York Law Journal also used the City's unincorporated business tax data to show the extent to which the legal profession's ranks have thinned in the past four years. Last year there were approximately 6,700 firms and solo practitioners doing business in the city, down about 19 percent from 8,300 in 1989.
 The number of law firms declined by 20 percent; the number of solo practitioners dropped by 17 percent.
 Thanks in part to less competition, those practices that remain saw increased profits. Average profits for individual firms rose from $1.9 million in 1989 to an all time high of $2.1 million for last year. During the same period, solo practitioners saw their average profits increase from $85,500 to $95,300.
 Some firms have managed to return to profitability by laying off attorneys, reducing staff and renegotiating office leases. Other firms have garnered additional revenue from expanding their practices into areas like bankruptcy and environmental law, according to management consultants quoted in the article.
 Despite the rosy picture, New York Law Journal editor Ruth Hochberger warns that cost-cutting can only have a limited role in increasing profitability. "If the general economic situation does not improve, the return to record profits will be short-lived," she stated.
 -0- 6/22/93
 /CONTACT: Andrew Plesser or J. Careswell of Andrew P. Plesser Associates, Public Relations, 212-319-8383, for The New York Law Journal/


CO: New York Law Journal ST: New York IN: SU:

MP-OS -- NY062 -- 4629 06/22/93 14:22 EDT
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Date:Jun 22, 1993
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