The 2016 Am Law 100: Trouble Ahead?
Some firms did exceptionally well, such as Silicon Valley powerhouses and Wachtell Lipton, but for many other firms, danger looms on the horizon.
Gross Revenue
People pay the most attention to profits per partner — we’re all socioeconomic voyeurs, perhaps to an unhealthy degree — but remember that the Am Law 100 is actually a ranking of firms by gross revenue, not by profits. For the 2016 Am Law 100 rankings, the top firm is the same as last year: Latham & Watkins, with a massive $2.65 billion in gross revenue (not changed much from 2014, up just 1.45 percent). DLA Piper and Baker & McKenzie, both former #1 firms, traded places from last year’s rankings; this time DLA is #2 and Baker is #3.
Wondering about that huge 40 percent gain for Morgan Lewis? Remember that it swallowed up Bingham in late 2014 (technically not a merger, but a mass lateral hire of hundreds of lawyers).
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The top 10 firms by gross revenue appear below. You can access the full list here.
Revenue Per Lawyer
Am Law calls RPL “the most reliable measure of a firm’s financial health,” which makes sense. You can’t manipulate it as easily as gross revenue (by growing headcount) or profits per partner (by shrinking the equity partnership).
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In 2015, RPL increased by just 2.6 percent, down from the 3.7 percent growth of 2014. Some 70 firms posted RPL gains, but that was down from 84 in 2014. The biggest gainer: Wachtell Lipton, whose RPL grew by 21.1 percent to a staggering $3.185 million. (Remember, that’s revenue per lawyer, not profits per partner; Wachtell’s RPL was almost twice that of second-place Sullivan & Cromwell, with $1.66 million.)
The top 10 firms by revenue per lawyer appear below. You can access the full list here.
Profits Per Partner
And now, the ranking that everyone loves (and loves to hate): the closely watched ranking of firms by profits per partner or “PPP.”
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Average PPP for the Am Law 100 as a whole grew by 4 percent in 2015 — which seems solid, but represents a slowdown from 2014’s figure of 5.3 percent. Wachtell Lipton once again hit it out of the park: it grew PPP by 20 percent, to a whopping $6.6 million, and became the first firm to break the $6 million mark.
There have been times over the past few years when it looked like litigation powerhouse Quinn Emanuel would overtake M&A powerhouse Wachtell in PPP, but not this year. The gap between WLRK and QE actually widened; Quinn’s PPP dipped by a shade over 10 percent (to a still robust $4.42 million — impressive given the litigation slowdown).
The top 10 firms by profits per partner appear below. You can access the full list here.
Have some thoughts to share on your firm’s financial performance last year? Drop us a line, by email or by text message (646-820-8477).
Congratulations to Biglaw on a slower but still solid year. The sky hasn’t fallen — yet.
The 2016 Am Law 100: Growth Slows for Big Law [American Lawyer]
OVERVIEW: Signs of a Slowdown [American Lawyer]
Earlier: The 2015 Am Law 100: Revenues Rising, Profits Popping, And A New #1 Firm
The 2014 Am Law 100: ‘The Super Rich Get Richer’
The 2013 Am Law 100: A Year of ‘Slow Growth’
The 2012 Am Law 100: Revenue and Profits Continue To Climb
David Lat is the founder and managing editor of Above the Law and the author of Supreme Ambitions: A Novel. You can connect with David on Twitter (@DavidLat), LinkedIn, and Facebook, and you can reach him by email at dlat@abovethelaw.com.
