Stats Of The Week: Bigger Is Not Better
Firms with fewer foreign outposts and a smaller proportion of international lawyers tend to have higher profit margins and profits per partner than their "global" peers.
Many Biglaw firms have seized on expanding their geographic footprint — with more attorneys in more offices in more countries — as the key for future success. The sprawling growth of Dentons is the most obvious exemplar. However, the folks at ALM Legal Intelligence have published some data suggesting that “bigger” does exactly translate into greater profits.
ALM parsed the data of the firms on its Global 100 list to show that firms with fewer foreign outposts and a smaller proportion of international lawyers tend to have higher profit margins and profits per partner than their “global” peers:
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Source: ALM Legal Intelligence
The two firms with the highest profit margins, Quinn Emanuel (66% profit margin) and Wachtell (65%), have a strikingly low proportion of foreign lawyers (14% and 0% respectively). Compare to global behemoths Dentons (26% profit margin, 69% foreign lawyers) and Baker & McKenzie (33% and 85%).