ALM Intelligence has previously examined the impact of lawyer headcount on firms that have experienced significant gross revenue growth in the years since the Great Recession. A finer focus on revenue per lawyer (RPL), however, reveals a still more complicated dynamic of law firm financial performance.
A firm’s RPL is broadly reflective of its rate structure as determined by the markets and clients it serves. RPL does not take into account costs or margins. Consequently, it isn’t necessarily the case that high RPL is good and low RPL is bad. A firm can be profitable at either end of the market. However, growing RPL can be interpreted as a sign of healthy activity, as it is important to maximizing top line growth.