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Law firm profitability is at a record high. The average equity partner, at an Am Law 200 firm, received $1.8 million in profit sharing compensation last year. This is higher than any point in recorded history (the Am Law 200 data goes back to 1984). Average profits per equity partner are nearly $500k dollars more, in nominal terms, than they were at the peak in profitability experienced before the past downturn. Even after adjusting for inflation, profits per equity partner are $125k per year more than they were a decade ago. Not bad if you ask me.

Given the myriad of obstacles law firms are facing, such increases in profitability seem striking. If clients are becoming more discerning buyers, profitability should be coming under pressure. Rising competition from alternative service providers and the ever-forward march of technology adoption should be having a similar, negative, effect on profitability. This raises an obvious question – how are law firms doing it?

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Nicholas Bruch, Director, ALM Intelligence

Nicholas is a Director at ALM Legal Intelligence. He is ALM’s principle analyst for the legal market and is the Director of the ALM Intelligence Fellows Program. Nick’s research on the legal market is regularly featured in The American Lawyer and other industry leading media outlets. Nick also speaks extensively on the legal market, keynoting major industry events and speaking at partner retreats for large and mid-sized law firms. Prior to joining ALM Legal Intelligence, Nick was part of Huron Consulting’s Law Firm Strategy Practice in the firm’s New York and London offices. Nicholas’s experience includes advising law firms and law department in developing and developed markets on issues related to strategy, business development, market intelligence, and operations. Nick holds a Masters of International Business from the Fletcher School at Tufts University and a BA in Economics and Philosophy from DePaul University.

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