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To mark our 30th anniversary, we’ve reached into our archives to highlight key events and players who made a difference since we made our debut. A version of the following article appeared in the July 21, 1986, edition…
With an average profits-per-partner figure of $350,000, the 131-lawyer Washington, D.C., office of Dallas’ Akin, Gump, Strauss, Hauer & Feld far outpaces other local law firms, according to a Legal Times survey rating the 10 highest grossing firms in the District. Covington & Burling, at 225 lawyers the city’s largest firm, ranks No. 1 in terms of gross revenues, with $56 million. The Legal Times survey was conducted in conjunction with The American Lawyer, which published a report of the 75 highest grossing firms in the country in its July/August issue. Only three D.C. firms — Covington, Arnold & Porter, and Hogan & Hartson — ranked in The American Lawyer‘s top 75. In terms of gross revenues, they were ranked 41st, 48th, and 56th, respectively.

Akin, Gump’s $350,000 average per-partner profits puts the firm’s D.C. office in the same league as much larger firms in New York and Los Angeles, far beyond the reach of its D.C. competitors. The runner-up in average per-partner profits, 153-lawyer Shaw, Pittman, Potts & Trowbridge, registered $270,000. Both firms are highly leveraged. Akin, Gump’s partner-to-associate ratio is 1-to-2.5, while Shaw, Pittman’s is 1-to-3. The two firms also rank highest in another category, the Legal Times Profitability Index. This figure represents the ratio of a firm’s profits per partner to its revenue per lawyer and serves as a measure of a firm’s efficiency because it factors in leverage — the number of lawyers per partner — and profit margin. (It can also be expressed as leverage times profit margin.) An LTPI rating of 1 means that a firm produces as much profit per partner as revenue per lawyer. Akin, Gump ranks first in LTPI; Shaw, Pittman is second. While D.C.’s two largest firms — Covington and Arnold & Porter — are the local leaders in gross revenues, they register relatively modest per-partner profits and rank low in LTPI. With partner-associate ratios of 1-to-2, both firms are far less leveraged than Akin, Gump or Shaw, Pittman. In the category of revenue per lawyer, which is an index of individual lawyer productivity, Covington and Arnold & Porter are outpaced not only by Akin, Gump but also by 141-lawyer Wilmer, Cutler & Pickering. It appears that size is the critical factor, rather than productivity or profitability, accounting for Covington and Arnold & Porter’s high ranking in gross revenues. Steptoe & Johnson, with 176 lawyers, ranks lowest in revenue per lawyer and profits per partner. It is also one of the only large D.C. firms to have shrunk in size last year. Steptoe has been plagued by overhead problems since 1984, when the firm moved to a new building it purchased. Unlike other published rankings of law firms, the Am Law 75 and Legal Times surveys are based on revenues, not number of lawyers. Together, the surveys involved an initial sweep of more than 130 firms. In all cases, revenues and profits listed are for the firm’s most recently completed fiscal year. The cutoff for fiscal years was April 1, 1986. In most instances, our results are based on the accounting method used by the firm.

Update: It’s been 22 years since Legal Times published its first list of the top-grossing Washington law offices. Since this initial D.C. 10 report, the size of revenue being pulled in by top-tier firms has increased tenfold for most. In 1986, the D.C. 10 totaled $374 million in gross revenue. For 2007, Hogan & Hartson and Wilmer Cutler Pickering Hale and Dorr each topped that number in gross revenue — $435 million and $391 million, respectively. Two other firms came close. All told, the top 10 firms in the D.C. 20 this year totaled more than $3 billion. Yet eight of the firms on the 1986 list remain in the D.C. 20 — five of those are still in the top 10. But two of them — Wilmer and Shaw, Pittman — had to go through massive mergers to stay competitive.

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