The Am Law 100 posted solid gains in gross revenue and profits in 2016, but the revenue per lawyer figure dropped on stronger growth in head count. Analysts are split on whether this change means firms are gearing up for an expected increase in demand or are setting themselves up for an overcapacity problem. The results show continuing stratification among the top and bottom of the list as well as more volatility, with more firms seeing key financial metrics dip one year and rise another. This year the list saw three new entrants and some changes at the top: For the first time in years, no global verein occupies the first or second spot.
FEATURES & ANALYSIS
ALM Intelligence senior analyst Nick Bruch offers his perspective on what the numbers really show when you remove the noise, what the biggest takeaways are and some interesting thoughts on whether we might see a Magic Circle that includes U.S. firms.
On average, revenue per lawyer, the metric that we’ve long regarded as the most reliable measure of a firm’s financial health, increased by 1.5 percent, lower than the 2.6 percent increase at Am Law 100 firms in 2015. For 2016, 65 firms posted a gain in RPL, compared with 70 in 2015.
Wachtell, Lipton, Rosen & Katz remains at the top of the list with $5.8 million in profits per equity partner. Quinn Emanuel Urquhart & Sullivan also exceeded $5 million in PPP. For the Am Law 100 as a whole, average profits per partner were up by 3.0 percent in 2016, coming in lower than the 4.0 percent increase of 2015.Twenty firms had growth rates of at least 10 percent, while five firms had double-digit declines.
This chart maps year-over-year changes in revenue per lawyer and profits per partner for every firm in The Am Law 100. Baker Botts, Crowell & Moring, and Nelson Mullins saw the biggest increases in both RPL and PPP last year.
Average Compensation-All Partners rose by 1.6 percent in 2016, compared with an increase of 3.7 percent in 2015. Seventy-one firms posted increases, compared with 70 the previous year. Fifteen firms posted double-digit gains, while six posted double-digit losses.
How we report law firm financials.