It’s that time of year again…time when law firms pore through the AmLaw 100 and 200 listings to see how their firm did, how their friends’ firms did, and most importantly, how their competition did. In addition to the quality gossip that can be gleaned from the pages of this edition of American Lawyer (yes, lawyers like gossip too), there are some interesting facts about how law is practiced these days. Indeed, some of the best reading comes from figuring out the reasons firms have done well.
We took a look at the AmLaw 100 and 200 reports and here are a few things we found interesting:
1. It’s still a tough road for the biggest firms – let’s be honest, these firms are huge, have expensive salaries to pay (ahem, Dewey), and fancy offices in many cities around the globe. While profits and headcount increased this year, many of the biggest firms are still trying to figure out how to get back to pre-recession levels of revenue and profits. Some firms are hiring lots of new partners, some are merging with other firms.
2. AmLaw 200 firms are using AmLaw 100 methods to keep costs down – while headcount at the AmLaw 100 went up this year by 3.3%, AmLaw 200 firms actually shrunk by 2.5%. In other words, keeping the overhead cost of having more people (usually associates) in the ranks down allows firms to hang on to more profit from the work they do, thus keeping the almighty figure of profits-per-partner up.
3. Everyone wants to be Fenwick – despite what Facebook’s stock price is today (somewhere below $30 per share, unfortunately), representing Facebook on their IPO is a blockbuster deal for a law firm. While these deals are great, and they do happen, not every firm gets to work on them. So (at least in our opinion) firms might benefit from some long term financial planning that doesn’t involve landing one giant deal and having a banner year because of it.
We’re a big fan of law firms figuring out ways to do things better than they did yesterday. The AmLaw numbers give us a chance to see what improvements might be called for. In our view, it would be great to see firms move towards more fixed fees, transparency around billing, and of course, technology that helps get the work done.