Am Law 100 News: Elite New York Dominate In Profits And Revenue

The rich keep getting richer when it comes to Biglaw.

While we await the full unveiling of the Am Law 100 tomorrow, we’re getting teased with insights from the publication’s annual cavalcade of Biglaw data confirming what we’ve been saying for some time now — the Biglaw rich are getting richer far faster than anyone else.

New York Law Journal’s Christine Simmons has the lowdown on a sample of 17 elite Biglaw firms that ALM uses as a benchmark when looking at the New York market. Unsurprisingly, they had a pretty good year:

All 17 firms, except Cravath Swaine & Moore, Cadwalader Wickersham & Taft, and Cleary Gottlieb Steen & Hamilton, posted increases in revenue last year, according to ALM reporting.

More than half of the 17 firms saw revenue growth of 5 percent or more, and three saw their revenue soar by more than 10 percent: Debevoise & Plimpton, with a gain of 11.8 percent to $822 million; Fried, Frank, Harris, Shriver & Jacobson, rising 14 percent to $634.9 million; and Willkie Farr & Gallagher, leaping up 11.7 percent to $772 million.

Similarly, all 17 firms saw their profits per equity partner increase, except three: Cleary, Cravath and Davis Polk & Wardwell.

That solidly puts the elite New York firms ahead of the industry as a whole. Indeed, as the Citi Private Bank Law Firm Group numbers demonstrate quarter after quarter, the cream of the crop firms are carrying the industry numbers as a whole right now — with some help from boutiques — with the next tier of firms barely treading water in the face of low demand.

Analysts from both Citi and Wells Fargo Private Bank’s Legal Specialty Group pointed to transactional work, including private equity and mergers and acquisitions, driving firms’ growth.

“For many of these firms that are doing the big transitional work … there’s a lot of elasticity to the rates,” said Joe Mendola of Wells Fargo. Litigation “has continued to be somewhat of a struggle,” he said.

Well, that’s the sign of a growing economy. Don’t worry, when the bottom falls out next year there will be plenty of people eager to sue. And that’s not counting all the bankruptcy litigation we’ll be able to enjoy!

The moral, as always, is that it’s good to be king. In an age of frugality, clients can look to leaner and cheaper alternatives for almost all of their legal work, especially with technology giving boutiques firepower on par with the old factory-system firms. The massive overhead of a Biglaw firm requires big ticket rates, and the only way to pay for that system these days is to back it up with a level of prestige so high that clients can justify the cost to themselves and their superiors.

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Cravath can pull that off. Not everyone else can. So let’s not be surprised when the full Am Law 200 list comes out that the gap between the Am Law 50 and the rest of the pack has grown precipitously.

Again.

New York’s Elite Law Firms Still Lead the Pack on Profits, Revenue [New York Law Journal]

Earlier: Law Firms Finished 2017 Better Than 2016 And Everything’s Still Malaise


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HeadshotJoe Patrice is an editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news.