This post was originally published by Content Pilot’s Patrick Fuller on the Deductive Intelligence blog. This is the fifth year that he’s published, through various sources, his take on the AmLaw 200 trends.
The 2013 AmLaw 200 was released in early June, and to borrow a line
from Led Zeppelin, the song remains the same. Numbers, data, and
statistics do not subscribe to, nor push, any specific ideology, but
they sure can tell a fascinating story.
First, a quick
disclaimer. This is very much a macro analysis, and therefore will deal
in some generalities. To be very fair, there are firms that are
included in various segments that are both outperforming that segment,
or conversely, under-performing against their immediate segment. While
I will normally refrain from naming individual firms, it’s easy to look
at firms like Irell & Manella, Munger Tolles, Williams and
Connolly, or Cahill Gordon (to name just a few) that are in the “bottom
150″ of the AmLaw 200, but are clearly outperforming the averages for
With that said, we’ll stay with the classic rock theme and kick off the analysis with a nod to the band with a law firm name, Emerson Lake & Palmer:
Welcome back my friends to the show that never ends
We’re so glad you could attend
Come inside! Come inside!
Year-Over-Year Quick Observations
First, let’s look at the KPI’s (Key Performance Indicators) from 2012 and 2013 to see where the changes took place.
give some perspective of the breadth and depth of change over the past
10 years, I’ve included the 2003 number as a point of reference, and
will address the 10 year trends in greater detail below.
The total collective revenue growth for the AmLaw 200 was outpaced by
the net operating revenue by a little more than half a percentage
point. Total collective revenue was nearly $92 Billion, and net
operating income as essentially doubled since 2003, finishing 2012 just
shy of $35 Billion.
All segments posted FY 2012 revenue gains over
FY 2011, with the bottom fifty firms (numbers 151-200) collectively
well off the growth pace of the AmLaw top 150.
Like revenue, total
headcount was up across all segments, with the bottom 150 showing the
most growth. A closer look at the numbers, however, reveals a stark
contrast in growth over the past 10 years. While the top 150 has seen
considerable growth in their total headcount, the bottom 50’s 2012 bump
actually pushed them back over their 2003 average.
Equity Partner headcount was a different story. The only segment
showing growth was the middle 100, with top and bottom 50 each
decreasing by roughly 2.5%. Once again, the bottom 50 is back below
their 2003 equity partner average.
Profits Per Equity Partner saw a solid 3% overall gain in 2012, but the
number was driven by the nearly 11% growth of the AmLaw top 50. Since
2003, the AmLaw top 50 has doubled their PPEP, with the other segments
well behind the growth curve but still posting solid gains over the past
should be noted that this is the first year since 2009 that the AmLaw
top 50 had collective growth in both PPEP and RPL. In FY2012, the AmLaw
top 50 was the only segment that saw their RPL increase over FY 2011.
As has been mentioned previously, strong Q4 collections may have contributed to the resurgence of the AmLaw top 50. According to Mark Medice, Senior Director & head of Peer Monitor,
collections for all monitored firms in Q4 2012 was up over 9% from the
previous year. Medice also mentioned that the strong 2012 Q4
collections had a substantial impact on the soft Q1 2013 revenue.
A Decade of Trends
mentioned above, the overall collective revenue of the AmLaw 200
continues to rise, climbing 84% since 2003 to an all-time high of nearly
$92 Billion. Only once in the past 10 years has there been a dip in
As strong as the revenue growth has been, the collective
net operating income has been even more impressive, increasing 98% since