It’s A-List season at The American Lawyer. For the sixth year, we applied the A-List algorithm to The Am Law 200 to determine the firms that best embody what it means to be a success in the legal community. As always, there were surprises. There’s a new A-List champ, Munger, Tolles & Olson, which replaced Debevoise & Plimpton. Some firms fell completely off the list (Howrey; Robins, Kaplan, Miller & Ciresi; Wilmer Cutler Pickering Hale and Dorr). Others climbed back on (Sullivan & Cromwell and Covington & Burling), or made their A-List debut (O’Melveny & Myers). But what is most notable about the 2008 A-List rankings is just how difficult it has become for newcomers to land one of the 20 coveted spots. The 2007 rankings featured seven new firms; the 2008 A-List, just three, and none finished higher than sixteenth place.
Our methodology for determining the A-List is relatively simple. We rank firms in four categories: revenue per lawyer, pro bono hours, associate satisfaction, and diversity representation. The higher the rank, the more points a firm scores. Revenue per lawyer and pro bono scores count double. For would-be A-listers, our rank-based scoring presents a challenge. To move up, they must not only do better, but do better than their competitors. Consider Cleary Gottlieb Steen & Hamilton, where revenue per lawyer increased to $980,000 in 2007, from $975,000 the year before. The firm actually fell three spots in the revenue per lawyer category when measured against the rest of The Am Law 200. Slight declines in the other A-list categories contributed to a slip on this year’s roster, from seventh to a still impressive tenth place.
Another hurdle: No firm can climb to the top by virtue of blowing everyone else out of the water in a single category. The most points a firm can obtain in the revenue per lawyer category, for example, is 400–no matter if it beats out the second-place firm by $1 or $1 million.
That doesn’t mean wannabe A-listers should give up. The firms in the top 20 have learned what it takes to hold on to their positions, but that stability does not extend to the 30 firms right below them–they still bounce around like ping pong balls in a lottery drawing. These firms moved up or down in our rankings an average of 12 places in 2008, more than twice the change in position of the average A-List firm. And most of the firms just outside the top 20 have at least one glaring weakness–a single score, such as weak pro bono hours, that doesn’t measure up to those of the elite.
We attempt to answer some of the questions that arose after scoring the field. For these stories, and our welcome to new A-Lister O’Melveny, read on.
THE DEBEVOISE ERA ENDS
After a four-year reign, Debevoise surrendered its crown in 2008, falling to fifth place on the A-List. Despite the drop, the New York-based firm had its richest year ever in 2007. Revenue per lawyer increased to $1,195,000, from $1,005,000 the year before, and the firm finished eighth in this category among The Am Law 200. (In 2006, Debevoise was nineteenth in revenue per lawyer.) The firm also increased its diversity ranking in 2008.
So what went wrong? Blame the associates. Some Debevoise associates, according to our annual Midlevel Associates survey [August 2007], were burned out. Common complaints included “intense client demands,” “heavy workloads,” and “stressful atmosphere.” A handful also mentioned that they were tired of working on internal investigations, a Debevoise specialty. (The Siemens AG fraud investigation was particularly taxing [See "Trendsetter" in our May 2008 issue].) Those concerns translated into particularly low scores on two of our questions. When asked if they expected to be at the firm in two years, 21 of the 53 third-, fourth-, and fifth-year associates who answered the survey indicated that they expected to work somewhere else by then. (Only eight respondents gave Debevoise the highest score in that area, suggesting that they strongly believed they would stay at the firm.) The associates also gave Debevoise poor marks in an area that tends to be a bugaboo for most law firms: “how clearly your firm communicates what it takes to make partner.” On a scale of 1 to 5, the average response to this question was 2.7. In an e-mail to The American Lawyer, Debevoise presiding partner Martin Evans wrote: “We are committed to excellence in all aspects of the professional experience of our lawyers, including fostering associate development and clear communications among our lawyers.”
Still, with revenue up and a top-five finish, we don’t think anyone at Debevoise should be too worried.
Debeoise & Plimpton: Associates Survey Rank
In 2008 O’Melveny was the sole A-List newcomer. The firm, which lurked just outside the A-List last year, finishing twenty-first, saw modest gains in its associate score and its revenue per lawyer, but not as much as competitors (revenue per lawyer increased to $855,000 from $830,000; however, the firm dropped to forty-eighth place from forty-first on The Am Law 200). But the biggest mover was pro bono hours. O’Melveny lawyers in the United States averaged 90 hours of pro bono work in 2007. That’s up from 73 the year before. Pro bono director David Lash, of counsel at the Los Angeles-based firm, credits the increase to the “formalization” of the firm’s pro bono program. Every first-year lawyer is now required to handle a pro bono case, and every O’Melveny lawyer is asked to devote at least 50 hours a year to pro bono. The firm also streamlined the approval process for a pro bono case to two days, down from a week or more. The only weak mark on O’Melveny’s record this year was a diversity score that dipped slightly, as the firm fell to twentieth place from fifteenth on our Diversity Scorecard, which measures the number of minority lawyers at the firms.
O’Melveny & Myers: Pro Bono Rank
For Sullivan, returning to the A-List, in nineteenth place, was about returning to form. When our rankings debuted in 2003, Sullivan was eighth on the list. Each year after that, however, the firm slipped a little. Revenue wasn’t the problem: Sullivan is now, as it was then, the second-best revenue-per-lawyer firm in The Am Law 200. But pro bono hours and diversity representation, long strong suits of the New York-based firm, suffered a decline.
Things have started to turn around. To address the lagging pro bono effort, last fall the firm hired Hofstra University School of Law professor Marcia Levy as special counsel for pro bono initiatives. Sullivan is now partnering with the Legal Aid Society of New York on a project to train associates to represent juveniles in family court on delinquency issues. The early result: Sullivan lawyers averaged 59 pro bono hours in 2007, up from 44 hours in 2006.
Sullivan also hired Alphonzo Grant, Jr., as director of diversity. Grant says Sullivan is attracting more minority associates because the firm is sending more attorneys on the law school recruiting circuit, and trying to make sure that once hired, minority associates don’t feel lost in the system. To that end, the firm has started affinity groups for black, Asian, and Hispanic associates to share advice and experiences. Grant says these efforts have been good for morale, which helps explains the change in another A-List scoring category. Sullivan’s associate satisfaction rank was way up in 2007. The firm finished forty-eighth, up from 153rd.
Sullivan & Cromwell: Associates Survey Rank
Last year we trumpeted the return of Robins, Kaplan to the A-List and credited its reemergence to happier associates. It appears that we spoke too soon. Robins, Kaplan is one of the three firms that fell off the A-List this year, finishing thirty-second in our rankings. Once again, associate feedback played a role. Associates graded the Minneapolis-based firm lower than they had in either of the previous two years. The firm’s associate satisfaction score dropped in 2007, and its ranking against other firms fell to ninety-third, down from twelfth place the year before. Associates graded the firm lowest in response to two questions: how clearly the firm communicates what it takes to make partner, and the likelihood that they will be at the firm two years from now.
Wilmer can also blame less satisfied associates for knocking the Washington, D.C.-based firm off the A-List. (The firm just missed, falling from eighth place in our rankings to twenty-second.) Wilmer’s associate satisfaction rank fell to 124th from fiftieth. Its associates said the firm needs to do a better job communicating what it takes to make partner, and they gave low marks to the firm’s billable hour requirements. (The firm’s pro bono rank also fell, to thirteenth, from seventh.) Wilmer and Robins, Kaplan declined to comment.
Poor performance in three out of the four scoring categories sent Washington, D.C.-based Howrey plummeting to forty-eighth place in 2008, from nineteenth place on the A-List last year. Revenue per lawyer fell to $755,000 in 2007, down from $825,000 the year before, which sent the firm’s rank in this category tumbling 38 positions. The firm’s diversity rank was lower (though still high) at twenty-sixth, down from seventeenth, and the associate satisfaction rank tumbled from marginal (ninety-first place) to basement dweller (148th). Robert Abrams, cohead of Howrey’s litigation department, says the revenue per lawyer fall is misleading, because billings last year were up 12 percent, and that the drop is attributable to investments, including $18 million spent opening three new offices. The firm also employs 80 staff attorneys, who bill at a lower rate and drag the number down, Abrams says.
Robins, Kaplan: Associates Survey Rank
Wilmer: Associates Survey Rank
Howrey: Associates Survey Rank
Three To Watch
Who might climb on board the A-List next year? Here’s an early look at three 2009 contenders.
- Fenwick & West: Fenwick, which represents life sciences and technology companies, made a terrific jump up the A-List leaderboard in 2008, climbing 31 rungs to the thirty-third spot. Fueling the move were gains in revenue per lawyer (up to $815,000, from $710,000), pro bono (hours increased to 54 per lawyer, from 49), and associate satisfaction (it scored thirty-sixth best in 2007, way up from 142nd in 2006).
The midsize Silicon Valley and San Francisco firm does litigation, corporate, and tax work for giants like Cisco Systems, Inc., and Apple Inc., but at least half of its clients are smaller tech companies and start-ups. Fenwick was “busy across the board” in 2007, says firm managing partner Kathryn Fritz. As for other moves up the charts: Fritz says pro bono gains can’t be chalked up to any one case, but rather a policy that encourages lawyers to take on unusual matters around the world. (One example: Partner Victor Schachter worked with Indian courts to help develop alternative dispute resolution procedures as a way to bypass overburdened court dockets.) Fritz says the associate score may be a reaction to a popular flex program, which allows associates to choose between a 1,950-hour track and a 1,800-hour track.
She reports that business is just as strong this year as last. (The same cannot be said for at least some of the firms ahead of Fenwick in the A-List rankings-particularly firms with big M&A and private equity practices.) Also, while Fenwick increased its pro bono ranking over last year, at seventy-first-best there is still ample room to grow. If the firm continues to score near the top in diversity-it already stands out even among Northern California firms, which are traditionally strong in this area-and keeps its associates happy, the A-List is in reach.
Fenwick & West: Associates Survey Rank
- Cooley Godward Kronish: Cooley is in a boat similar to Fenwick’s. A 2005 A-Lister, the firm has struggled to get back on the list since, and in 2008 came in at number 24. Like Fenwick, the Silicon Valley firm took a nice big step up the revenue per lawyer chart in 2007, to forty-eighth place on The Am Law 200. “The consistency of demand across practice groups was as good as it’s been in recent memory,” says Cooley CEO Joseph Conroy. He says the firm is more balanced geographically, after expanding on the East Coast, and practicewise too. Cooley is best known for handling corporate transactional work, but “perception hasn’t kept up with reality,” Conroy says. He says litigation now accounts for about 45 percent of revenue, and that six of ten major matters last year were pure litigation.
The firm also did better in pro bono, which Conroy credits to the addition of 110 lawyers in August 2006 from the former Kronish Lieb Weiner & Hellman. Kronish, Conroy says, had a rich tradition of pro bono, which helped boost the firm’s overall score. (Cooley attorneys averaged 65 hours of pro bono in 2007, up from 51 the year before.) Cooley’s path to the A-List is clear: If it increases its scores across the board even a modest amount, or if a handful of firms above it see a decline, 2009 could be Cooley’s year.
Cooley Godward: Rank By Revenue Per Lawyer
- Schulte Roth & Zabel: Gamblers looking for a dark horse could do worse than place a wager on Schulte. The firm rocketed up 25 places in 2008, to forty-fifth on the A-List scorecard, and it has a built-in advantage over many of the other firms fighting to make the top 20. Namely: It makes a lot of money. Schulte scored twenty-fourth-best in revenue per lawyer on The Am Law 200 in 2007, up five spots from the year before.
Schulte has also seen a remarkable pro bono turnaround. Daniel Greenberg, special counsel for pro bono, asked lawyers to take on several ambitious projects, including a lawsuit against the state of New York over inadequate indigent defense in several upstate counties, which claimed 6,000 hours of lawyer time last year. That helped push the firm’s pro-bono-per-lawyer average to 52 hours in 2007, up from 33 the year before. The firm scores high on diversity, too, which begs the question: Why isn’t Schulte on the A-List already? Answer: morale. Associates consistently give the firm low grades in our satisfaction survey. So, Schulte partners, if you show your associates a little love (the occasional weekend off), and continue to press pro bono, a 2009 A-List showing is very much within reach.
Schulte Roth: Pro Bono Rank
A Firm of Equals
- The A-List 2008 1-20
- The A-List 2008 21-50
- The A-List 2008 51-200