FOR YEARS THE AM LAW 200 RESULTS HAVE SHOWN A
deepening chasm between the most elite firms and the rest,
and 2016 was no different. But this spread is posing a particular challenge for the firms that rank just below the largest
and richest firms. The Am Law 51-100 is at a crossroads. In a
legal services climate where standing out from the pack is the
key to success, this varied group of firms share some common
elements that make differentiation difficult to achieve.
These firms often don’t offer international services, but have
enough overhead to push their rates higher than those of the
group below them. They can at times
be too large to be an attractive merger
partner because of the risk of profit dilution. Their ability to innovate is hampered because The Am Law 51-100
have more stakeholders to get on board
than smaller firms do. And they don’t
have as much money to invest in innovation as the group above them, because maintaining their PPP is crucial
to their ability to attract lateral talent.
The financial data from 2016 show
that all of these strains are taking their
toll. The Am Law 1-50 grew gross revenue an average of 4. 5
percent in 2016. The second 50 grew gross revenue at about
3. 6 percent. Each group had seven firms with double-digit in-
creases in revenue, but the second half saw 11 firms decline in
revenue while the top half only had seven firms dip in revenue.
Revenue per lawyer (RPL), profits per equity partner
(PPP) and profits per lawyer (PPL) tell an even bleaker tale.
The Am Law 100 as a whole experienced a slowdown in RPL
in 2016, growing the key metric only 1. 5 percent. But the top
50 saw that metric rise 3. 6 percent, while the second 50 expe-
rienced a decline of 1. 3 percent.
Equity partner profits among the
Am Law 100 rose 3.0 percent in 2016.
That average was boosted by results
from the top 50, who grew PPP 6. 1
percent, and pulled down by the bot-
tom 50, who saw PPP fall 1. 7 per-
cent. Profits per lawyer saw a similar
spread. Among the Am Law 100, PPL
grew 2. 5 percent. That metric rose
4. 3 percent within the top 50 and
dropped 3. 3 percent among the bot-
tom 50 firms.
THE SECOND HALF OF THE AM LAW 100 HAS SOME SOUL-SEARCHING TO DO.
Distinct or Extinct?
WHAT ROAD SHOULD
A FIRM TAKE TO
“IT’S AN EXISTENTIAL
BY GINA PASSARELLA
THE AM LAW 51-100