They were casualties of the high cost of doing business: In a year when The Am Law 100 posted tepid year-over-year financial gains, Second Hundred firms bested their bigger rivals in most metrics but still came up short on the bottom line. While the Second Hundred’s revenue per lawyer jumped 5.3 percent and value per lawyer rose 4.7 percent, profits per partner increased just 2.2 percent, a bit less than The Am Law 100′s 3.0 percent. The culprits? Steep expenses and a sharp drop in leverage.
The Second Hundred’s total gross revenue in 2011 was $17.93 billion, a 2.7 percent increase that was outpaced by The Am Law 100′s increase of 5.3 percent. Each group had roughly equivalent profit margins (37 percent for the Second Hundred and 38 percent for The Am Law 100, both unchanged from 2010). But the Second Hundred was much less adept than its bigger counterparts at translating top-line growth into profits: While The Am Law 100′s growth in profits per partner (3.0 percent) exceeded its growth in revenue per lawyer (1.9 percent), the converse was true for the Second Hundred, where average profits per partner grew 2.2 percent, and average revenue per lawyer increased 5.3 percent.
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