April 28, 2011 9:41 AM
The Am Law 100 2011: Back in Black
Posted by Robin Sparkman
After watching partner profits sink in 2008 (down 4.3 percent) and crawl back into positive territory in 2009 (a mere 0.3 percent increase), The Am Law 100 collectively exhaled last year as profits per partner jumped a healthy 8.4 percent.
Firms heeded Obamaphile Rahm Emanuel's advice and didn't let the economic crisis go to waste. They cut overhead, principally by trimming head count at all levels, and reined in expenses. (Lavish retreats in exotic locales gave way to pedestrian events at the home office.) As the economy revived, the country's highest-grossing firms were able to convert modest revenue gains into profits thanks to their prudence. Here are a few other key stats from our rankings:
GROSS REVENUE. The Am Law 100's revenue jumped 4 percent last year, in effect making up for the 3.4 percent loss it posted in 2009. Firms benefited from the nascent recovery in capital markets and M&A. And even with clients' demands for discounts, firms were able to increase their "productivity" or hours worked and raise rates.
It's also critical to note that much of The Am Law 100's revenue growth came from two giants—DLA Piper and Hogan Lovells, a pair of vereins whose worldwide revenues are being included in The Am Law 100 for the first time, because of a change in our methodology. Leaving out those two anomalies, The Am Law 100's average revenue went up a meager 1.4 percent.
HEAD COUNT. Firms continued to trim their lawyer ranks. The Am Law 100's attorney head count fell 2.7 percent in 2010 (or 3 percent if you exclude DLA Piper and Hogan Lovells). This was the biggest drop since we started ranking law firms almost 25 years ago. Equity partner head count alone slipped 0.9 percent last year, after dropping 0.7 percent in 2009.
REVENUE PER LAWYER. Not surprisingly, the cuts in head count and the modest uptick in billing rates led to a 4.4 percent increase in RPL for an average of $807,330.
PROFITS PER PARTNER. The rigorous cost cutting also led to a surge in profits, with Am Law 100 firms reporting an average PPP of $1,366,695.
The rich also got richer last year.
•To access the complete report, including all charts and feature stories, go to: www.americanlawyer.com/amlaw100.
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