Congratulations Am Law 200 firms. You have weathered all the disparaging comments about your cities, your practice, the quality of lawyers that work at your firms. And now, as we stare into the sewage drain of the American legal economy, the Am Law 200 firms are coming out smelling like roses:
Reports of their demise, it turns out, were premature. For years, the regional firms that constitute much of the Second Hundred were told that they were exactly the wrong size: too big to compete with the narrow focus of boutiques and too small to match The Am Law 100′s national footprints and marquee names. But last year, as the financial sector began its meltdown, the Second Hundred’s slow-growth strategies were vindicated.
While average revenue per lawyer at The Am Law 100 decreased by 1.2 percent in 2008 (the first decline since 1991), Second Hundred firms were essentially flat. And when the Second Hundred’s national firms, as well as those in the nation’s biggest money centers–Boston, Chicago, Los Angeles, New York, San Francisco, and Washington, D.C.–are left out of the calculations, average RPL growth was 1 percent. In all, 49 Second Hundred firms posted increases in RPL, compared to 42 Am Law 100 firms.
As Bob Sugar might say: “This is a nice moment for you, I’m going to let you have it.”
After the jump, more ego-shattering news for coastal, prestige conscious associates and partners.
The success of Am Law 200 firms when compared against Am Law 100 firms is even more stark when you remove national Am Law 200 firms from the data set:
What’s more, the firms that outperformed were the ones that pointedly ignored The Am Law 100′s usual recipe for growth–relentless focus on the most lucrative markets, practices, and clients. This time around, it was Second Hundred firms based in middle markets that showed the most growth. Milwaukee’s Second Hundred firms increased their revenue per lawyer by an average of 3.2 percent. Indianapolis’s and Kansas City, Missouri’s showed average RPL gains of 3.1 percent and 7.9 percent, respectively. Snell & Wilmer, the only Phoenix firm with a multiyear presence in The Am Law 200 (a second firm, Lewis and Roca, was added this year), increased its RPL by 8.6 percent.
Firms in these markets increased their profits per partner by an average of 1.5 – 6.4 percent, compared to an average decline of 2.6 percent for the Second Hundred as a whole and 4.3 percent for The Am Law 100.
Yeah, well, I’d rather be BROKE and living in a GUTTER in The City than live large and in charge in Tuscon! It’s called cultural relevance baby! … Yeah! … Because … *sigh* … has the deadline passed for the Arizona bar exam?
Practice diversity was the key to success last year, but we’re not just talking about the requisite balance of corporate, restructuring, and litigation matters. For many Second Hundred firms, labor and employment, trusts and estates, and environmental practices significantly boosted revenue. Kansas City’s Lathrop & Gage increased its RPL by 7.8 percent, in part because of an employment law practice that increased its hours by almost 6 percent and a trusts and estates practice that grew more than 10 percent, says chief executive officer Joel Voran. Those practices, along with equally strong increases in tort and IP litigation groups, bolstered the firm’s performance in a year when its real estate practice was flat and its corporate practice was down about 1 percent, he says.