As we mentioned in Morning Docket, the American Lawyer recently released its Am Law 200 law firm rankings — a list that’s still closely watched, but not quite as prestigious as being a ranked member of the influential Am Law 100. Sorry, but being a part of the “Second Hundred” just doesn’t have the same ring to it.
While the Am Law 100 celebrated a year of “slow growth” in 2012, it looks like the Am Law 200 will be known for its “bets on bulk.” When all of the big boys were busy playing it safe, perhaps out of fear of becoming the next Dewey, firms in the Second Hundred were gobbling up talent like there was no tomorrow.
Of course, as could’ve been expected, this kind of aggressive hiring had some pretty major effects on firms’ financial performance. So how did the Am Law 200 stack up? Let’s find out…
First, we’ll start with Am Law’s summary of the latest law firm rankings:
Seldom has the strategic divide between The Am Law 100 and the Second Hundred been so stark. Faced with a tepid economic recovery in 2012, the big boys played it safe—and their smaller competitors gambled on growth. … Second Hundred firms are clearly wagering that, as the economy improves, their lower rates will drive work their way, and that their investment in new partners will pay off. Time will tell.
American Lawyer is calling this a “hiring binge,” because for the Am Law 200 as a whole, total head count increased by a whopping 885 lawyers, representing a 3 percent increase over 2011’s numbers. The number of equity partners increased by 1 percent, and the number of nonequity partners grew by a staggering 10.1 percent. This rapid hiring served as a sucker punch to the Am Law 200’s financials.
Sure, gross revenue in the Am Law 200 may have increased by 3.2 percent to $18.51 billion (a new record), but the hiring binge hangover hit these firms where it counts: in their revenue per lawyer (rising just 0.2 percent, compared to the the Am Law 100’s increase of 2.6 percent) and profits per partner metrics (rising only 2.4 percent, compared to the Am Law 100’s increase of 4.2 percent).
Now for the part you’ve been waiting for: gross revenue, revenue per lawyer, and profits per partner. We’ll provide a chart for the the top 15 firms in the gross revenue rankings, and the top five firms for the RPL and PPP rankings (Am Law didn’t provide separate RPL and PPP charts for only the Second Hundred).
We’ll start with how much cash these firms brought in as a whole (the full chart can be found here). Some things to note before you dig in: Ice Miller had the largest gain (32.5 percent), and Fitzpatrick Cella Harper & Scinto had the largest drop (8.8 percent). Offer a warm welcome to the following firms that recently dropped out of the Am Law 100: Barnes & Thornburg, Chadbourne & Parke, Cozen O’Connor, and Wilson Elser Moskowitz Edelman & Dicker. Here are the numbers:
As for RPL, where we see a relatively accurate picture of a firm’s overall financial well-being, we’ve got five big name players strutting their stuff. The integrated Am Law 200 RPL chart can be found here:
1. Irell & Manella
2. Munger Tolles & Olson
3. Choate Hall
4. Patterson Belknap
5. Fenwick & West
Finally, moving on to PPP, where all of the magic happens, we can see that Irell continues to dominate (perhaps with the help of a dip in equity partner head count), despite its overall rank of #122 on the Am Law 200. The integrated Am Law 200 PPP chart can be found here:
1. Irell & Manella
3. Kasowitz Benson
4. Curtis Mallet-Prevost
5. Munger Tolles & Olson
How did your firm fare in this year’s Am Law 200 rankings? Feel free to discuss in the comments.
The 2013 Am Law 200 [American Lawyer]
The 2013 Am Law 200: The Second Hundred Bets on Bulk [American Lawyer]
The 2013 Am Law 200: Firms Ranked by Gross Revenue [American Lawyer]
The 2013 Am Law 200: Firms Ranked by Revenue Per Lawyer [American Lawyer]
The 2013 Am Law 200: Firms Ranked by Profits Per Partner [American Lawyer]
Irell Enjoys Another Year of Profit Growth [American Lawyer]