In this week's Law Firm Disrupted, we compare pre- and post-recession revenue growth rates at two of the largest firms in the country. It's like a picture of a celebrity pushing a stroller. They're just like you. But deep down you know: Not really!

I'm Roy Strom, the author of this weekly newsletter on the changing business of Big Law, and I can be reached at [email protected].

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To be sure, I'm not typically a fan of the phrase “new normal.” It's too generic and, in the context of the legal industry, it's a bit stale at this point.

Nevertheless, it is true that the world changed after the 2008 financial crisis. The topics I write about in this column and newsletter are often a reflection or result of that change. And, believe it or not, that change can even be seen in the historical financial data of the world's most successful law firms.

Take Latham & Watkins, for instance. The law firm just became the first in the history of the Am Law 100 to reach $3 billion in gross revenue. It is a financial juggernaut whose leading partners believe that Latham has only just begun to capitalize on the global breadth and depth of legal talent the firm has spent the past decade or more amassing.

If you take the Am Law 100 figures from 2009 as the general year where most law firms saw the most pain from the financial crisis (that is fiscal year 2008), you can see that growth rates since then have been dramatically lower than the same time period leading back from 2009—even for the highest performing law firms.

With $3.06 billion in 2017 revenue, Latham has seen impressive gross revenue growth of 59 percent from 2009, when the firm brought in $1.92 billion. In the nine-year period leading up to 2009, however, Latham's revenue grew 230 percent—from $582 million in 2000.

Kirkland & Ellis' post- and pre-recession growth rates tell a similar story. The Chicago-founded firm grew revenue 89 percent from 2009 through fiscal year 2016 (The American Lawyer has not yet reported the firm's figures for 2017). In the pre-recession era from 2001 to 2009, Kirkland's revenue grew 198 percent.

This is by no means meant to scoff at the performance of these two firms—neither of whom have Wall Street roots —from 2009 to their most recent results. Make no mistake: Latham and Kirkland are now leading the industry.

Both firms dramatically beat the overall revenue growth scale during both time periods for the Am Law 100 as a whole. From 2009 to 2017, the revenue of Am Law 100 firms grew 29 percent. From 2001 to 2009, that figure grew 117 percent.

One thing Latham and Kirkland have done that others have not, however, is keep profits per partner increasing at a similar pace over both time periods. In short, the recession didn't much dent those firms' ability to return ever-higher profits to their shareholders.

Latham, with profits per partner last year of about $3.25 million, has grown that figure 71 percent since 2009. PPP grew 79 percent from 2001 to 2009 at Latham. Not much difference. In the post-recession period, Kirkland grew PPP by 66 percent. That metric was 76 percent in the run-up to the 2008 recession.

The Am Law 100 is a much different story. After growing PPP by 69 percent as a group from 2001 to 2009, the average profits per partner (all of the Am Law 100's net income divided by all its equity partners) rose just 32 percent from 2009 to 2017.

Kirkland and Latham are operating, just like all large firms, in a legal market of lessened expectations. Don't shed a tear for them. Partners from most other firms will need to steel themselves if they want to run a similar analysis on their firm.

A PERSONAL NOTE: I'd like to give a shout out to the people at ALM Intelligence who developed a new tool called Legal Compass that makes this sort of historical financial analysis much easier to do than in the past. I pulled all this data myself (in an amount of time I don't want to be too upfront about for fear of a greater workload from my editors). In the past I would have had to make requests to our data group. Hopefully, the easy access to this data makes our reports by The American Lawyer and other publications more valuable to readers interested in financial analysis.

Roy's Reading Corner

Bloomberg on Legal Tech: Bloomberg Big Law Business had two stories this week on two different New Law-type topics: The blockchain and law firms recruiting tech-savvy lawyers.

From their report on tech-savvy recruiting: Law firms are scouring for lawyers with expertise in computer science or cryptography to advise corporate and government clients implementing technology and navigating nascent case law in these areas, executives and attorneys told BLB. Law firms trailing in technology know-how risk losing business from all sectors of the economy, lawyers told BLB. More states, in their attorney competence standards, are telling firms to boost their lawyers' tech expertise, or run the risk of possible sanctions or penalties.

And from a BLB report on how blockchain could impact lawyers: Blockchain technology is now being used to build tools and infrastructure that help lawyers draft contracts, record commercial transactions and verify legal documents. Two examples of such tools and infrastructure are OpenLaw and Integra Ledger. OpenLaw allows lawyers to automatically generate legal agreements and embed smart contracts that can be executed via blockchain. Integra Ledger provides a permissioned blockchain to increase the integrity of legal documents.

LegalWeek on PwC: My colleague Alex Berry from Legal Week in the U.K. writes that PwC's Flexible Legal Resources program—is taking off. Peter Workman, managing director of Flexible Legal Resources (FLR), told Berry that the on-demand legal staffing offering has received 500 applications from would-be FLR lawyers within two weeks and now boasts a pool of more than 1,000 contractors.

From Berry's report: Workman is of the belief that the flexi-working model should not just apply to lawyers, and that in the future PwC should be able to provide contract-based resources in all professional services sectors. “We do not see this as just a U.K. offering,” Workman said. “I have had enquiries from Asia and we see that as a key market for this offering. I don't think there is a limit on growth.”

On Rate Rises: Go ahead, bilk your clients. That is apparently the message of this report from Citi Private Bank's Law Firm Group that states law firms do better when they raise rates even if those raises are met with bigger discounts. One anecdotal reason this may be happening: Some general counsel have financial goals set for them that are described in percentage-savings terms. Law firm partners have told me stories of clients who want discounts from billable rates because they are easy savings to communicate up the line. Never underestimate the manipulative power of immediate incentives.

That's it for this week! I'm not a celebrity, so I do e-mail just like you. Reach out here: [email protected]. You can also sign up for this newsletter/column here.