Biglaw, Partner Issues, Partner Profits, Rankings

The 2014 Am Law 200: Survival Of The Fittest

Today, the American Lawyer released its Am Law 200 law firm rankings — a closely watched list of the law firms that are rich and prestigious, but not quite rich and prestigious enough to become a member of the elite and influential Am Law 100. If this were law school rankings, you could think of the “Second Hundred” as the institutions that came in just a step below the lauded T14.

As we noted when the Am Law 100 rankings came out in late April, the key takeaway was that the super rich were continuing to get richer. When it comes to the Am Law 200, flat performance is still very much the new up. There were some outstanding performances, though, and 20 firms out of the Second Hundred were designated as “super rich,” just like their Am Law 100 cousins.

While some firms came out on top, others were merely surviving. How did the Am Law 200 stack up?

Before we plunge into PPP, here’s an overview of how the Am Law 200 as a whole performed in 2013:

  • Gross revenue: $19 billion, up by 2.6 percent (a new record).
  • Average revenue per lawyer: $626,784, up by 2.5 percent.
  • Average profits per equity partner: $701,310, up by 0.7 percent.

Focusing on the key metrics of RPL and PPP — which barely moved in 2013 — this is a relatively lackluster performance. Here’s Am Law’s summary of the latest Second Hundred rankings:

Only a year ago news about the Second Hundred—firms number 101 to 200 on The American Lawyer’s list of the nation’s top-grossing firms—focused on personnel growth. The firms were adding head count—partners and associates—and betting that there would be more work for more lawyers. A year later, it looks as though that gamble didn’t pay off across the board. Instead, a small set of firms scored positive financial results that belie their size. For many of the others, in 2013, flat results were the new success story.

The Am Law 200’s “hiring binge hangover” had lasting effects into 2013, and the year-over-year drops were astounding, with 36 firms posting dips in gross revenue, 47 firms cutting head count, 23 firms lagging behind in RPL, and 40 firms watching their PPP tumble. Many other firms in the Second Hundred posted increases of less than one percent in all of these categories. It wasn’t a good year for the Am Law 200.

On the bright side, there were standout performances posted in 2013 by the Am Law 200’s “Super Rich”:

Twenty firms in the Am Law Second Hundred outperformed their peers last year and actually landed amid the top 100 firms in terms of both profits per partner and revenue per lawyer. As with their higher-grossing counterparts, these firms reeled in a disproportionate share of 2013’s earnings. The gross revenue of the Second Hundred’s Super Rich grew by 4.6 percent; the rest of the lot saw their revenue grow by just 1.1 percent on average.

Much like the Am Law 100, the differences between the Super Rich and Everyone Else were stark. While the top 20 firms grew their gross revenue by 4.6 percent, the rest grew by merely 1.1 percent. The top 20’s RPL increased by 4.7 percent, but everyone else gained just 0.8 percent. As for PPP, the top 20 Am Law 200 saw a boost of 3 percent on average, while their peers dropped by 0.8 percent ($5,149 a head).

Now for the part you’ve been waiting for: gross revenue, revenue per lawyer, and profits per partner…

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