The AmLaw 100 for 2007: "Flash Report"

The American Lawyer not only has a spiffy new website, but this afternoon @ 3pm NY time they offered their first-ever webinar, hosted by Aric Press,  offering a preview of the AmLaw 100 for 2007.   The full results will be released tonight (look for a link here on "Adam Smith, Esq.") but first, a "flash report" from the webinar.

• Total combined revenue of the AmLaw 100 in 2007 totaled $64.5-billion, up 13.6% year over year.
• Revenue per lawyer, one of my favorite statistics (and apparently one of Aric's as well) grow 6.4% to an average of $820,000.
• Lawyer headcount was up 7% to 78,000 lawyers.
• But the slowest-growing component of that headcount, equity partners, comprised barely 23% of total headcount.
• At current rates, nonequity partners will outnumber equity partners in a mere 7 years; they already do at 21 firms (and across the entire AmLaw 100 they comprise 35% of all partners).
• The ranks of equity partners grew just 2.6% last year (about 5 partners for the "average" firm), and for the past five years the growth rate has surpassed the 21-year average growth rate of 3.2% only once (in 2003)
• Moreover:
  • 37 firms actually shrank the number of equity partners last year;
  • 4 showed no change; and
  • 8 firms added only 1 or two. 
• Skadden and Latham have both broken the $ 2.0-billion revenue/year barrier.
• In terms of PPP, 19 firms are now at $2-million or above, a gain of four firms over 2006.
• Wachtell (what a shock) remained king of the PPP hill at $4.9-million.
• Average PPP for the 100 is now $1.3-million, and median PPP is $1.2-million.
  • This means, rather insultingly, that a full dozen firms with a PPP number >$1-million find themselves in the bottom half of their peer group on this metric.
• New York continues to be a special place.  The difference between RPL for historically New York-based firms vs. non-New York firms is 41% ($1.1-million RPL for NY, $780,000 for non-NY).   Note that because this is calculated using "historic headquarters," firms such as Latham and Kirkland are, statistically, "non-NY" firms, so the "real" divergence is certainly greater.
• But overall, we have been, as Aric puts it, in a golden age, with five years in a row of growth in both RPL and PPP exceeding the historic averages.  To be specific:
  • In the five years starting in 2003, RPL has grown $205,000:  It took 10 years for it to grow by the same amount before 2003.
  • And as for PPP, since 2003 it has grown $438,000:  It took fully 15 years to grow by that amount before 2003.
• Is the great run now over?  By all current indications, it seems to be.  Deal volume is sharply down and, so far at least, litigation, restructuring, and bankruptcy have not yet stepped fully up to the plate. 
• Yet simplistic year-on-year comparisons can be misleading.  So, for the first time ever that I'm aware of, The American Lawyer explicitly ranked firms over the past ten year period based on their RPL—not total revenue and not PPP.  The results?  Absolutely fascinating:
  • 41 firms more or less ended where they began on this "relative RPL" ranking.
  • Of the remaining 59:
    • 12 dissolved or were absorbed by merger;
    • 20 improved their RPL by double digits;
    • 15 saw their RPL drop by double digits:
    • 7 moved from the bottom half of the distribution to the top half; and
    • 5 slid from the top half to the bottom half.
• The biggest movers on the ten-year RPL ranking were:
  • Dechert, up 35 slots.
  • Akin Gump, + 34.
  • DLA, + 31.
  • Chadbourne, down 44 slots,
  • And each of Dewey, King & Spalding, and White & Case down 20 slots.

What else do Aric and his colleagues at TAL foresee?

In many ways, their vision is aligned with what I would predict:

• Despite the current economic challenges (including the fact that the new and improved level of associate salaries will be with us for the full  2008 fiscal year, pushing costs to a permanently high new plateau), in the long run the increasing complexity of the economy, the rise of globalization and cross-border trade, and the increasing sophistication of our clients all argue that the long-run demand for high-end legal services will be perfectly healthy.  Indeed, in his keynote at the recent Georgetown symposium on "The Future of the Global Law Firm," Ralph Baxter, CEO of Orrick, prophesied that we would need more, not fewer, lawyers in the future.  ("Too few lawyers?!") 
• And yet the gap between richer and poorer is growing ever-wider. 

Again, look for full coverage after the entire list is released tomorrow.