The Am Law Second Hundred Is Out And Looks Just As Negative As We've Come To Expect

Not a lot of good news down in the rankings.

This is the Am Law 100 walking away from the second hundred.

Let’s start with the positives. Revenue was generally up and profits per partner enjoyed a modest boost.

The bad news, of course, is that this still resulted in the firms losing significant ground to the Biglaw elite:

Start with jealousy, which may result from the impulse at Second Hundred firms to compare their financial results to their bigger brethren. The Am Law 100 continued to pull away last year. In fact, the nation’s 100 largest firms by revenue grew their lead over the Second Hundred by a wider margin than in all but two years in the past decade.

The Am Law 100 grew revenue by 8 percent last year. Subtracting the Second Hundred’s 3.1 percent growth rate creates a delta of 4.9 percent. Wider gaps existed only from 2016 to 2017 (when the delta was 5.6 percent) and from 2014 to 2015 (5.9 percent).

Kirkland & Ellis added more revenue last year than the whole second hundred combined! As one might suspect in a world where the mid-tier firms are falling farther behind, some have sought salvation in the form of mergers. Womble Carlyle Sandridge & Rice, Andrews Kurth, and Gardere Wynne Sewell all departed the second hundred due to merger. And the quest for growth may be the only way up for second hundred firms:

The 25 largest firms by head count in the Second Hundred grew revenue by 4.5 percent and PEP by 3.5 percent. The next 25 largest saw revenue rise 2.8 percent and PEP jump 6.4 percent. Firms No. 151 to 175 boosted revenue by 3.5 percent and PEP by 3.8 percent. The smallest 25 firms increased revenue by 3.8 percent, while PEP was virtually flat, growing by 0.1 percent.

Still, Nicholas Bruch, director of ALM Intelligence, points out that “43 firms saw revenue shrink or grow slower than inflation (2.4 percent). PEP shrank or grew slower than inflation at 41 firms; 42 firms saw RPL grow slower than inflation.” That’s not a blueprint for success. At least the firms are also lagging behind in controlling costs!

Sponsored

Firms 76 to 100 saw costs rise 0.6 percent. Firms 101 to 125 saw costs rise 1.5 percent. Costs rose 3.7 percent at firms ranked Nos. 126 to 150, and 3 percent for firms 151 to 175 and 176 to 200.

The hits just keep on coming. And remember, this is the outlook when the economy is good. When the dark days come — and they will — it’s hard to imagine these firms will have much in the tank.

The Am Law Second Hundred Are Green—With Envy [American Lawyer]


HeadshotJoe Patrice is a senior 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. Joe also serves as a Managing Director at RPN Executive Search.

Sponsored