Top 50 law firms are 'cannibalizing' an increasing share of legal revenue
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The nation’s 50 highest-grossing law firms continue to outpace other higher-earning firms in growth in income, net revenue and demand, according to financial data.
Law.com illustrates the trend with information from ALM Intelligence. In 2000, firms in the Am Law 50 accounted for 52% of the total revenue in the Am Law 200, compared to 62% of total revenue in 2020.
Between 2000 and 2020, collective revenue per lawyer increased by 90% for the Am Law 50, compared to 75% growth at the other firms in the Am Law 200.
“Am Law 50 firms have been cannibalizing an increasing share of revenue among the Am Law 200 since the turn of the century,” Law.com reports.
A new report by the Wells Fargo Private Bank Legal Specialty Group also highlights the trend. It’s “nine-month 2021 check-in survey” found:
• Revenue at surveyed firms in the Am law 200 increased 14% overall during the first nine months of the year. At Am Law 50 firms, revenue increased 17%, compared to 10% for the Am Law 51-100 and Am Law 101-200.
• Net income increased 24% overall, ranging from 27% for the Am Law 50 to 17% for the Am Law 101-200.
• Lawyer demand increased nearly 7% overall. For the Am Law 50, logged lawyer hours increased 9%, compared to 3% for the Am Law 51-100 and Am Law 101-200.
Even though firms in the Am Law 50 outperformed the others on the whole, other firms in the Am Law 200 showed “solid performance” with moderate demand growth, rate growth, realization improvement and expense savings, according to a Wells Fargo Private Bank Legal Specialty Group press release.
The survey is based on results from 120 law firms in the Am Law 200.