Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Like appraising closely held businesses, gauging the financial worth of law firms isn’t an exact science, and each year we ask readers to read this report with a few caveats in mind. Law firms traditionally keep their finances to themselves, and if they cooperate with a press survey such as this, they do it informally. All of the firms listed among the Top 20 provided at least raw data — such as billing rates, hours billed and non-hourly fee structures — from which we could make informed estimates of gross revenue. Information about salaries and other overhead helped us calculate net income. Some partners went further to give us actual gross and net income (though “off the record”). Still others were willing to guide us with our informed estimates, making sure they were within acceptable margins of error. We also checked with secondary sources, such as a firm’s former partners and associates. To avoid signaling where we got numbers firsthand and where we didn’t, we rounded gross revenue and net income to the nearest $1,000 and revenue per lawyer and profits per partner to the nearest $100. Gross revenue is all fees collected by the firm during the fiscal year, including billings for legal professionals on staff. Net income is the profit left for equity partners after paying all expenses. It does not include compensation for nonequity partners, who have guaranteed incomes, plus some form of bonus arrangement, all of which are part of overhead. The ratio of revenue per lawyer to profits per partner is the Am Law Profitability Index (API), devised by The American Lawyer magazine, an affiliate of the Law Journal. The higher the API, the more successful the firm is at turning revenue into profits. The financial figures for each firm are for the most recently completed fiscal year, which ended in 2001 for most firms. However, the survey lists the numbers of lawyers and partners as of Aug. 31, 2001, excluding the new class of associates who start in the fall but don’t start generating revenue immediately. For Fox, Rothschild, O’Brien & Frankel and Drinker Biddle & Shanley — both being branches of Philadelphia-based firms — we counted only those lawyers who, according to the firms, were principally based in New Jersey as of the date we counted. In obtaining revenue figures, we asked for actual receipts, even though some firms’ accounting systems operate on an accrual basis.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.