Monday, April 30, 2007 6:38 AM
The American Lawyer's Am Law 100 issue is out. As always, it is an informative read. Some snippets that I bullet-pointed from online articles on the subject posted at Law.com.
From the article The Am Law 100: A Look Behind the Numbers:
- In 2006, for the first time since The American Lawyer started measuring the financial performance of law firms 22 years ago, a majority of America's 100 top-grossing firms had profits per equity partner of $1 million or more.
- Compared to 2005, average revenue per lawyer went up 7.3 percent (to $779,000, from $726,000), and average gross revenue shot up 11.4 percent (to $567 million, from $509 million). Lawyer head count also grew by 3.9 percent.
- Contingency fees helped fuel the incredible profit growth at Wiley Rein (which posted a 465 percent increase), as well as at Akin Gump Strauss Hauer & Feld (a 34.2 percent increase), Quinn Emanuel Urquhart Oliver & Hedges (a 27.6 percent increase), and Finnegan, Henderson, Farabow, Garrett & Dunner (a 21.8 percent increase).
- For some firms, reducing the size of the equity partnership helped spike per-partner profits. Of the 28 firms that posted profits per equity partner increases of 15 percent or more in 2006, 15 had a decrease in the number of equity partners.
- Paradoxically, some firms that increased their profits per partner and purged their partnerships somehow managed to end up with a net gain in number of equity partners anyway.
As the article sums up, [t]he bottom line: It's a great time to be an equity partner at an Am Law 100 firm. But getting there -- and staying there -- can be brutal.
On the same subject, from the article Lessons of The Am Law 100:
On the surface, at least, it's the same happy story. New records galore: Gross revenue up 11.4 percent, profits per partner up 13.4 percent, revenue per lawyer up 7.3 percent, which is to say, at a clip exceeding the annual hike in billing rates. Times are so good for the men and women who own Am Law 100 firms that those who snared profits of a mere million dollars were below par: The mean was $1.2 million; the average among firms headquartered in New York, an astonishing $2.05 million.
The gleaming top-line numbers tell only part of the story. Amid the glee, here are three lessons worth considering:
- Partnership has changed, irrevocably. The new rules of partnership? Tenure is dead. Produce (at an attractive rate) or perish.
- The rich are richer, and the next tiers are becoming one.
- Firms are on a treadmill paved with gold.
Hit the links above to read the full stories at Law.com