As we mentioned in Morning Docket, the American Lawyer recently released its highly influential, closely watched Am Law 100 law firm rankings. They say that “slow and steady wins the race,” and with regard to economic recovery, Biglaw firms seem to have taken that up as their new motto.
Yes, partners are still living as large as they ever were, but their success now comes in the form of single-digit returns with regard to key financial metrics. The divide between the “haves and the have-nots” in the world of major law firms has grown to epic proportions, and some Am Law 100 staples have fallen out of the top hundred firms altogether. Welcome to the new normal.
Are you ready to get excited about “modest” and “spotty” gains across the board? Let’s dig in….
First, we’ll start with Am Law’s summary of the latest law firm rankings:
Well, now we know which firms were swimming naked after all. In fiscal 2012, The Am Law 100 … posted modest gains on all our key metrics. For gross revenue, revenue per lawyer, and profits per partners, the top 100 firms notched low single-digit year-over-year increases. But those averages belied the recovery’s unevenness. Only 76 firms reported gross revenue increases last year. And only 66 had profit per partner increases—down from 80 firms and 72 firms, respectively, on last year’s Am Law 100 list.
For the Am Law 100 as a whole, gross revenue rose by 3.4 percent (representing a new record), revenue per lawyer rose by 2.6 percent, and profits per partner rose by 4.2 percent. The firms in the top half of the Am Law 100 saw PPP grow by 8 percent, while PPP for the latter half fell by 3.3 percent.
Here are some quick highlights (from articles included in the issue):
1. There were five newcomers to the Am Law 100: Bracewell & Guiliani (this firm fell off the wagon last year; welcome back), Faegre Baker Daniels, Fragomen Del Rey Bernsen and Loewy, McKenna Long & Aldridge, and Ogletree Deakins Nash Smoak & Stewart. On the other hand, four firms dropped off the list: Barnes & Thornburg, Chadbourne & Parke (ouch; the firm had appeared on the list for nearly three decades), Cozen O’Connor, and Wilson Elser Moskowitz Edelman & Dicker.
2. Thanks to a gigantic contingency fee, Kilpatrick Townsend & Stockton was a firm that struck gold: “Gross revenue shot up to $44.5 million, a 12.3 percent increase. The top-line growth boosted revenue per lawyer to $735,000, a 16.7 percent rise that is The Am Law 100’s largest, while profits per equity partner rose to $860,000, a 36.5 percent jump that is The Am Law 100’s second-largest.”
3. Several firms saw double-digit increases in gross revenue, the largest of which (more than 12 percent) were at the following firms: Paul Weiss, Quinn Emanuel, Arnold & Porter, Baker & Hostetler, Hughes Hubbard, Kilpatrick Townsend & Stockton, Fragomen, McKenna Long & Aldridge (the largest increase of all — 23.4 percent), Bracewell & Guiliani, and Ogletree Deakins.
And now, without further ado, let’s take a look at the most important metrics of all: gross revenue, revenue per lawyer, and profits per partner….