Back in black - key trends and figures from The Am Law 100 results

After watching partner profits sink in 2008 (down 4.3%) and crawl back into positive territory in 2009 (a mere 0.3% increase), The Am Law 100 collectively exhaled last year as profits per equity partner (PEP) jumped a healthy 8.4%. Major US law firms certainly didn't let the economic crisis go to waste. They cut overhead, principally by trimming headcount 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:

May 25, 2011 at 07:03 PM

5 minute read

The market was hardly booming but a close eye on costs meant most Am Law 100 law firms were able to improve profitability in 2010. Robin Sparkman reports

Major US law firms certainly didn't let the economic crisis go to waste. They cut overheads, principally by trimming headcount 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% last year, in effect making up for the 3.4% 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. Still, Citi Private Bank's law firm group estimates that rate increases in 2010 were roughly half the size of the annual rate increases in the boom years prior to 2008.
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 meagre 1.4%.

Headcount. Firms continued to trim their lawyer ranks. The Am Law 100's lawyer headcount fell 2.7% in 2010 (or 3% 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 headcount alone slipped 0.9 % last year, after dropping 0.7 % in 2009. (There were exceptions, of course. Quinn Emanuel Urquhart & Sullivan's total headcount jumped 14.8%, and its equity partner ranks grew 22% – the largest increases in The Am Law 100. Moreover, the spike in equity partner headcount didn't weigh down the litigation powerhouse's PEP, which jumped almost 16% last year.)

Resources