The Score

April 30, 2009 5:20 AM

The Am Law 100 2009: Gainers and Decliners in Revenue Per Lawyer

Posted by Ed Shanahan

By Drew Combs and Julie Triedman from the May 2009 issue of The American Lawyer

Want an example of just how much the world changed in 2008? Look no further than The Am Law 100's top revenue-per-lawyer gainers and decliners. Cravath, Swaine & Moore was the year's biggest loser, posting an 18.2 percent drop in RPL, to $1.2 million. A year earlier, Cravath posted a 9.2 percent gain. By contrast, 2008's biggest RPL increase, 15.2 percent, was seen at Howrey; in 2007 that firm's RPL slid 8.5 percent.

What happened? Wall Street's implosion, obviously, and a change of power in Washington, D.C. Here are some new rules for increasing RPL—our most reliable measure of a firm's financial health—in hard times.

• Stay off Wall Street. Not only were seven of our ten biggest decliners New York firms, they were some of New York's shiniest names, including Cravath; Davis Polk & Wardwell; Simpson Thacher & Bartlett; Sullivan & Cromwell; and Wach­tell, Lipton, Rosen & Katz (see Losing Their Balance). The drops were brutal, double-digit in most cases. But let's keep things in perspective. Despite the hits they took, New York capital markets firms still dominate The Am Law 100's RPL rankings. Six of the seven New York firms on our list of biggest decliners still had revenue per lawyer of more than $1 million.

It wasn't just New York bluebloods that got roughed up in the financial industry melee. RPL at Latham & Watkins, which in recent years has expanded its capital markets practice and its presence in New York, dropped 12.4 percent, to $915,000. (Since 2005, Latham's New York office has been the firm's largest.) Latham, founded in Los Angeles, was the only firm with a large West Coast footprint to make our list of biggest RPL decliners.

• Go to court. Howrey chairman Robert Ruyak explains his firm's status as this year's top RPL gainer mostly as an exercise in staying out of trouble. "We are not in any of the areas that suffered significant downturns," he says.

What Howrey does focus on is litigation. Ruyak says that antitrust class action defense work surged in 2008. Revenues from the firm's antitrust group--its smallest practice area by head count--increased 36 percent over 2007.

In addition, Howrey benefited from growth in its five-year-old global services center, which does document review and electronic discovery work for Howrey, but also sometimes acts as a specialized e-discovery counsel in cases for which it is not litigation counsel. Last year, for instance, Anheuser-Busch used it to support its defense of consumer antitrust claims.

Last year the center, based in Falls Church, Virginia, added $48 million to Howrey's top line, $6 million more than in 2007. In 2008 the center was staffed by an average of 175 lawyers--75 staff attorneys and 100 temps. Ruyak says the center has been so successful that Howrey is considering opening a second one, on the West Coast.

• Learn to love the Beltway. Of 2008's top ten RPL gainers, five are Washington, D.C., firms. Their big practices are in such things as litigation (which generally holds up better than transactional practices in a downturn) and regulation (expected to gain in importance during the Obama administration).

• Drop the weight. Akin Gump Strauss Hauer & Feld, where RPL rose 12.9 percent, to $965,000, spent much of 2008 in an austerity program, eventually shedding 56 partners, a 16.9 percent reduction. (Total head count dropped 8.4 percent, to 807 from 881.) "We have been through a difficult restructuring that started in the fourth quarter of 2007 and lasted through the summer of 2008," says chairman R. Bruce McLean. "It stretched our culture, but we are a significantly stronger firm, and our financial results for 2008 demonstrate the moves we made were the right moves." McLean says the reorganization has left about 60 percent of the firm focused on litigation and regulatory work.

Sutherland Asbill & Brennan was another gainer that benefited from reduced head count--RPL rose 8.8 percent, to $740,000. According to managing partner Mark Wasserman, Sutherland's 8.1 percent drop in head count was due in part to "a focused effort to ensure that...staffing is aligned to the anticipated [client] needs."

All indications are that The Am Law 100 is in for a bumpy ride in 2009, but if the firms in 2008's RPL gainers and losers are any indication, the right mix of location, practice areas, and lean staffing might mitigate the damage--unless you make your living on Wall Street.

Access the full Am Law 100 report at

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I know my revenue is down. Not because of client load but because of the economy in general. It's really hard for businesses and citizens to pay out unexpected costs right now. Hopefully it turns around for us all.

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