Seldom has the strategic divide between The Am Law 100 and the Second Hundred been so stark. Faced with a tepid economic recovery in 2012, the big boys played it safe—and their smaller competitors gambled on growth. After a disappointing 2011, the Second Hundred took in a combined total of $18.51 billion in gross revenue. But almost all that top-line growth was achieved through leverage. Total head count grew by 885 lawyers, a 3 percent increase that more than reversed a 2.5 percent drop in head count in 2011, while the total number of equity partners rose 1 percent, and the nonequity partnership ranks swelled 10.1 percent. The result: weak growth in per-lawyer and per-partner metrics. Compare that to The Am Law 100, where total head count increased just 0.8 percent, the total number of equity partners was flat, the number of nonequity partners grew just 2.5 percent, to 12,909, and growth in per-lawyer and per-partner metrics was more robust. Second Hundred firms are clearly wagering that, as the economy improves, their lower rates will drive work their way, and that their investment in new partners will pay off. Time will tell.
INFOGRAPHIC: Click here for an interactive chart comparing The Am Law 200 firms to those in The Am Law 100, based on four key metrics of law firm economics.
One thing is clear: Second Hundred firms are on a hiring binge. What’s not certain is when—or whether—it will pay off.
Some firms took a beating during the recession; others were barely fazed. Who thrived, who merely survived—and why?
Will expanding its health care practice to high-cost markets like Washington, D.C., and Los Angeles harm the firm’s midwestern price advantage?
Munger Tolles & Olson marks its 50th anniversary with a second year of double-digit profit growth
A double-digit boost keeps Irell & Manella’s profits per partner among The Am Law 200′s highest.
A contingency payout from a pesticide case fed a 22 percent increase in the Denver-based firm’s gross revenue.
After a turbulent 2008, Miami’s Akerman Senterfitt is now basking in the sun.