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In the four years that we’ve been tracking the finances of The Am Law Second Hundred ( see related charts), you’d think we were compiling a list of the damned instead of reporting on Nos. 101 to 200 of the nation’s highest-grossing firms. Year after year, consultants warn that the Second Hundred firms are the wrong size, that their options are merger or slow death. Is it any wonder that managing partners of some Second Hundred firms face the designation with unease? So how is it that the Second Hundred — Pepsi to The Am Law 100′s Coke — marches on, posting solid financial results? The truth is, there’s plenty of money to be made by the Second Hundred. But it takes focus. The stars of the Second Hundred aren’t scaled-down versions of full-service Am Law 100 firms. They’re more specialized — so much so that they nab the sort of premium work that elite Am Law 100 firms do. Seven Second Hundred firms are among the nation’s 50 most profitable firms, and each is known for a dominant practice area, be it litigation (Crowell & Moring; Kramer Levin Naftalis & Frankel; Munger, Tolles & Olson; and Williams & Connolly), media law (Dow, Lohnes & Albertson), bankruptcy (Howard, Rice, Nemerovski, Canady, Falk & Rabkin), or intellectual property (Pennie & Edmonds). Six of those firms — all except Kramer Levin — are also among the nation’s 50 firms with the highest revenue per lawyer, along with three IP shops (Fish & Neave; Fish & Richardson; and Townsend and Townsend and Crew); litigation-heavy Robins, Kaplan, Miller & Ciresi; entertainment-oriented Loeb & Loeb; and Irell & Manella, a high-end corporate firm focusing on Southern California. Financially speaking, premium work is like a shot of adrenaline at Second Hundred firms because they carry less baggage than Am Law 100 firms. They don’t have to maintain the networks of branch offices and armies of associates that most Am Law 100 firms do. In 2001 Am Law 100 firms increased their head count by an average of 11.3 percent and their equity partnerships by 5.8 percent, as compared to 6.4 percent and 1.7 percent, respectively, at Second Hundred firms. Average leverage at Second Hundred firms was 2.93 in 2001, as compared to 3.81 at Am Law 100 firms. Where does this leave Second Hundred firms that focus geographically, offering a full slate of services in a secondary financial center? Those sorts of firms, based in such midsize markets as Omaha, Neb., Memphis, Tenn., Columbus, Ohio, Indianapolis, Cincinnati, Denver and Portland, Ore., land in the bottom quarter of The Am Law 200′s profits per partner rankings, thanks to their lower-than-premium billing rates. (Fortunately, they also enjoy lower-than-Manhattan overhead.) There’s still growth in those geographic niches. For instance, the least profitable firm in The Am Law 200, the Second Hundred’s Holland & Hart, posted average profits per partner of $260,000 in 2001 — an increase of 4 percent from 2000. But can such firms continue to grow as the economic downturn drags on? For this year and beyond, that will be the task facing managing partners at regionally focused Second Hundred firms. Call it their Pepsi Challenge. Related charts: The Am Law 200 Firms A streamlined version of the full Am Law 200 rankings, showing law firms and revenues. Firm Gains & Losses Firms that gained — and lost — the most ground. The Am Law 200 Breakdown The top 50 firms account for about half of the 2001 Am Law 200 pie in almost every category. Comparing the First & Second Hundred How the top tiers stack up against one another. Average Growth by Category Average growth in all categories for Am Law 100 and Second Hundred firms.
Click here to purchase a searchable spreadsheet containing the complete Am Law 200 list. Click here to purchase a print edition of The American Lawyer, containing the Am Law 200.

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