'Profits chasm' widens between most- and least-successful BigLaw firms, Am Law 100 survey finds
Posted Apr 28, 2014 06:40 pm CDT
Overall revenue for the country’s 100 largest law firms last year was a record $77.4 billion, generated by about 94,000 attorneys. That represents a 5 percent increase from the previous year.
But most of those firms are on the wrong side of a growing “profits chasm” between the cream of the large law firm crop and the rest of BigLaw, reports an American Lawyer (sub. req.) article about the magazine’s 28th annual law firm survey. An AmLaw Web page provides links to related coverage.
Twenty percent of the firms surveyed account for a little over a quarter of overall revenue, earned by 18 percent of the attorneys in the survey, the article explains. With average revenue per lawyer of $1.2 million or more and profit per partner of $3 million or more, perennial top-performers such as Boies, Schiller & Flexner; Cravath, Swaine & Moore; and Wachtell, Lipton, Rosen & Katz soared about the rest of the field. (Although they are the highest-paid, Wachtell partners actually saw PPP dip 4.4 percent in 2013, to $4.76 million, notes the New York Times’ DealBook.)
But for the rest of the BigLaw bunch, the numbers painted a less appealing financial picture.
Nearly three quarters of the firms surveyed saw gross revenue rise a little more than 2 percent, on average, to $631.3 million, with a 1 percent increase in revenue per lawyer, to $803,839. Average per-partner profit grew slightly more, going up by 1.2 percent to $1.2 million.
Meanwhile, six global firms organized as Swiss vereins lagged behind the rest, employing 19 percent of the lawyers but bringing in less than 14 percent of the survey group’s total revenue.
Mix the results from all three groups together, and both revenue and partner profit were flat—a disappointment compared to the growth that occurred in 2012, the article notes.
The five top-grossing firms in the Am Law 100 for 2013 were the same as in 2012, the Times reports: DLA Piper earned $2.5 billion, up 1.7 percent; Baker & McKenzie earned $2.4 billion, up 4.6 percent; Latham & Watkins earned $2.3 billion, up 2.7 percent; Skadden Arps, Slate, Meagher & Flom earned $2.3 billion, up 1.1 percent; and Kirkland & Ellis earned $2.1 billion, up 4.1 percent.
Additional and related coverage:
ABAJournal.com (Feb. 2014): “Was 2013 a good year for law firms? It depends on where you’re sitting”
ABAJournal.com (April 2013): “Am Law 100 firms make modest gains in revenue and profits: Is the legal market recovering?”
Pittsburgh Business Times: “K&L Gates moves up in AmLaw 100, Pittsburgh firms prominent in annual ranking”