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We present our Corporate Scorecardreport this month, our annual review of high-level corporate practices. Familiar names lead the pack, as the chart below suggests. And there is much joy in those precincts about the return of the deal economy. But there is also room for caution. Our initial look at last year’s financials, which we will report in detail over the next two months, suggests a patchy performance last year by both the Am Law 100 and Second Hundred firms. And a new report from Citigroup on billable hours is hardly a cause for celebration. At a recent Legal Works conference, Citi’s Dan DiPietro reported that, last year, growth in gross hours among the firms to which he has access had slowed compared to 2004. And hours per lawyer actually dipped slightly. According to his records, billable hours still haven’t returned to 2000 levels. (Citi tracks a bit more than half of the Am Law 200 firms.) Also, partners at Citi’s 30 most profitable firms reported billable hours at roughly the same level as associates; at the other firms, the partners were trailing their flogged youngsters. One possible explanation for why the higher-priced partners were doing better, according to DiPietro, was that clients were seeking out “senior trusted advisers” and paying their top rate when they needed them. So we’re mired in a best-of-times, it-could-be-worse-of-times market segmentation. Our Scorecard shows great breadth of top-level corporate practices. In all, 117 firms won at least one mention on our league tables. But not all practices turn out to be equal: There is just less money and market resistance in securitization, say, than in M&A. And of course, even within the securitization business, there are firms doing top-of-the-market work and others bundling mortgages for a living. As I’ve argued before in this space, law firms need to track the percentage of their work that is price-insensitive. This high-value ratio, obviously, will vary. One measure of economic health is how high a firm can push its HVR. In its way, Citi takes a cut at this issue by measuring realization rates. DiPietro found that overall the rate hovers around 90 percent, with the 30 most profitable firms running a couple percentage points ahead of the rest. The surprise came when he found that the top 15 firms were collecting their fees at a 95.9 percent rate, while the second 15 were several points behind, at 89.2. The collection rate at the second 15 was slightly behind Citi’s group. Why? Bruce McLean, the chair at Akin Gump Strauss Hauer & Feld, surmised that Citi’s top 30 was heavily concentrated in New York, but the New York market, too, had segmented. If that’s correct, he suggested, the second half of the top 30 could charge like the big boys, but they couldn’t collect. Even at the high end, misery loves company. There’s more to be said on the Am Law 100, and we will do so next month. Firms with the Most Top-Ten Rankings Firm Number of Top-Ten Rankings Latham & Watkins 15 Skadden, Arps, Slate, Meagher & Flom 15 Simpson Thacher & Bartlett 12 Sidley Austin 10 Shearman & Sterling 9 Sullivan & Cromwell 8 Clifford Chance 7 Dechert 7 Mayer, Brown, Rowe & Maw 7 Cadwalader, Wickersham & Taft 6 Cleary Gottlieb Steen & Hamilton 6 Davis Polk & Wardwell 6 Orrick, Herrington & Sutcliffe 6 Vinson & Elkins 6 Source: The Corporate Score Card 2006 Firms with the Most Top-Ten Rankings

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