HOW WE REPORT LAW FIRM FINANCIALS

The Am Law 100 is reported by staff members at ALM’s publications throughout the United States, including The American Lawyer, The Connecticut Law Tribune, Daily Business Review (Miami), Fulton County Daily Report (Atlanta), The Legal Intelligencer (Philadelphia), The National Law Journal/Legal Times, The New Jersey Law Journal, The Recorder (San Francisco), and Texas Lawyer.

Most law firms provide their financials voluntarily for this report. Some choose not to cooperate, so we make estimates based on our reporting. But all data is investigated by our reporters. In the event that an error in reporting a previous year is discovered, we will correct the numbers and base the percentage changes in future years on restated numbers.
 

DEFINITIONS

GROSS REVENUE is fee income from legal work only. It does not include disbursements or income from nonlegal ancillary businesses.

NET
is compensation paid to equity partners.

EQUITY PARTNERS
are those who receive no more than half their compensation on a fixed-income basis. 

NONEQUITY PARTNERS
are those who receive more than half their compensation on a fixed-income basis.

LAWYER COUNTS
are average full-time-equivalent (FTE) figures for the 2012 calendar year. Retired partners and of counsel are not counted as partners, nor are payments made to them counted in net operating income. Temporary and contract attorneys are not included.
 

HOW WE CRUNCH THE NUMBERS

REVENUE PER LAWYER is calculated by dividing gross revenue by the number of lawyers.

PROFITS PER PARTNER
is calculated by dividing net operating income by the number of equity partners. 

COMPENSATION–ALL PARTNERS
is calculated by adding net operating income to compensation paid to nonequity partners.

AVERAGE COMPENSATION–ALL PARTNERS
is the net operating income plus compensation to nonequity partners, divided by the number of equity and nonequity partners.

VALUE PER LAWYER
is calculated by dividing compensation–all partners by the total number of lawyers. We then divide that figure by $10 million to determine how many lawyers it takes to generate that amount.

PROFITABILITY INDEX
includes leverage, which is the ratio of all lawyers (minus equity partners) to equity partners, and profit margin, which is the ratio of net operating income to gross revenue multiplied by 100. It can also be obtained by dividing profits per partner by revenue per lawyer.
 

OUR CONVENTIONS

On the poster and the A to Z chart, full firm names are used. On all other charts we publish shortened firm names.

We round gross revenue and net operating income to the nearest $500,000. Profits per partner, revenue per lawyer, value per lawyer, and average compensation–all partners are rounded to the nearest $5,000. 

Firms that are tied in the rankings are ­listed in alphabetical order.
 

HOW WE DESIGNATE LOCATION

Firms are placed in the “international” or “national” categories according to the distribution of their lawyers.  

Vereins are broken out separately because their structure, particularly regarding profit sharing, differs significantly from that of other Am Law 100 firms. 

If 40 percent or more of the firm’s lawyers were located outside the United States, we identify the firm as international. If no more than 45 percent of the firm’s attorneys were located in any one region of the country, we identify the firm as national. Otherwise, we determine the firm’s largest market and then the largest city within that market and use that as the location.
 

DESIGNATION OF REGIONS AND MARKETS 

We use the following classifications for identifying the geographical concentration of a firm’s offices and attorneys:
  • NEW ENGLAND Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont
  • NEW YORK CITY
  • MID-ATLANTIC Delaware, Maryland, New Jersey, New York State (excluding New York City), Northern Virginia, and Pennsylvania
  • WASHINGTON, D.C.
  • SOUTH AND SOUTHEAST Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Southern Virginia, Tennessee, and West Virginia
  • MIDWEST Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and ­Wisconsin
  • WEST AND SOUTHWEST Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Oklahoma, Texas, Utah, and Wyoming
  • WEST COAST/PACIFIC RIM Alaska, California, Hawaii, Oregon, and Washington State
Contact research editor Russell Miskiewicz at rmiskiewicz@alm.com.