Paul Schmidt of Baker & Hostetler. Courtesy photo Baker & Hostetler Reverses Profitability Declines But Compensation Pressures Mount
Revenue grew by 7.6% in 2023 to top $971 million, while PEP rose by 3.6% to more than $1.8 million.
March 08, 2024 at 11:26 AM
6 minute read
Law Firm Profitability
What You Need to Know
- Baker & Hostetler continued a steady revenue growth trajectory in 2023 and reversed a decline in profitability it incurred in 2022.
- While the dollar amount of Baker & Hostetler's bottom line grew in 2023, its profit margin has been steadily declining for the past few years due to compensation pressures.
- The firm saw a contraction in the spread of equity partner pay, as the increase in profits allocated to lower-paid partners has grown more substantially than for higher-paid partners.
Aggressive rate increases and a diversified practice mix helped Baker & Hostetler reverse the profitability losses incurred in 2022. But as cost pressures from travel and compensation mount, the firm is weighing its options for how to invest in future growth.
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