The 2015 Am Law 100: Revenues Rising, Profits Popping, And A New #1 Firm

Who's the new top firm by gross revenue, and what obscene new high did Wachtell Lipton profits hit last year?

Law students are getting jobs. Summer associates are acting unprofessionally. The legal recruiters we saw at last week’s NALP conference were in high spirits. Are boom times back for Biglaw?

Based on the latest Am Law 100 rankings, which we mentioned earlier today in Morning Docket, the answer would appear to be yes — but a qualified yes. The pattern that we saw in the 2014 Am Law 100 of the “super rich” law firms pulling away from the merely “rich” continues.

Before we talk about individual firms — and reveal the new leader of the Am Law 100 — let’s review some overall statistics about how the Am Law 100 performed in 2014:

  • Total revenue: $80.96 billion, up by 4.6 percent (a new record).
  • Average revenue per lawyer: $872,000, up by 3.7 percent.
  • Average profits per partner: $1.55 million, up by 5.3 percent.

These financial metrics are significantly stronger than last year, when average RPL fell by 0.4 percent and average PPP grew by just 0.2 percent. But don’t pop the champagne just yet (or, for associates, start dreaming of a $200,000 starting salary). As Am Law’s Chris Johnson points out, these numbers conceal both variation and game playing:

[A] good amount of Am Law 100 growth has been superficial. Some of the firms that saw big increases in revenue did so largely as a result of significant increases in attorney head count, while others that saw a rise in per-partner profits did so through either a contraction in equity partner numbers or an increase in leverage — or both….

Of the 29 firms that saw PPP increases of at least 10 percent in 2014, 13 also reduced their equity partner numbers. Four of these firms trimmed their equity ranks by more than 9 percent. Kilpatrick Townsend & Stockton’s 32.1 percent increase in PPP, to $925,000, was almost entirely due to a change in the way the firm distributes equity among its partnership. The same is true with Vinson & Elkins and Fried, Frank, Harris, Shriver & Jacobson. The pair increased PPP by 12.6 percent and 11 percent, respectively, on the back of 10 percent and 10.1 percent reductions in equity partner numbers.

So while 46 firms grew gross revenue by more than 5 percent in 2014, and 17 achieved double-digit increases, only 21 firms achieved more than a 5 percent increase in RPL. Just four firms (Jenner & Block, Fenwick & West, Latham and Wachtell, Lipton, Rosen & Katz) managed to boost RPL by more than 10 percent.

Latham and Wachtell — let’s talk more about them, shall we? Flip to the next page to view the top firms by gross revenue, revenue per lawyer, and profits per partner….

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