The American Lawyer published results from its annual Am Law 200 report, which includes data and rankings for the nation’s Second Hundred highest grossing law firms. Overall, gross revenue decreased on average by 0.2 percent, net income decreased by 1.4 percent, profit per equity partner decreased by 1.4 percent, revenue per lawyer decreased by 0.3 percent, and headcount rose 0.1 percent.
Although the group as a whole declined in all major metrics, the report revealed that eight Second Hundred firms saw double-digit revenue growth and 22 firms had growth of 5 percent or more. Among the Second Hundred firms, Kobre & Kim had the largest increase in revenue, up by 49 percent. According to the report, one firm dropped from the Am Law 100 to the Second Hundred this year: Pepper Hamilton. Meanwhile, six firms moved onto the Am Law 200. They were Buchalter; Cole Schotz; Eckert Seamans; Goldberg Segalla; Herrick Feinstein; and Marshall Dennehey Warner Coleman & Goggin, (as quoted in The American Lawyer).
“The 2018 Am Law 200 data reflects a stark contrast to this year’s Am Law 100,” notes Gina Passarella, Editor-in-Chief of The American Lawyer. “The declines in key financial metrics among the Am Law Second Hundred were more to do with the firms who fell off the list via merger or closure than an overall decline in financial health of the group as a whole. These stats show there is much more volatility in the Second Hundred when it comes to who is on or off the list than we saw with the Am Law 100.”
Senior Analyst at ALM Intelligence, Nicholas Bruch adds, “Two important findings emerge from the Am Law 200 data. First, many firms within the Second Hundred are struggling with the transition the legal market is undergoing right now. Am Law Second Hundred firms fared less well, on average than their larger peers. The second finding is more hopeful. Many firms within the Second Hundred produced strong years. This points to a fact we see very clearly in the Am Law data: that some firms are finding ways to manage difficult market conditions and outperform the market.”
See more highlights from The Am Law 200 on The American Lawyer.
Contact Bill Sugarman for more information.
Legal industry professionals say prospects for their future legal business look bright, but cite pricing pressures and cybersecurity as the biggest challenges their firms face, according to a recent survey published on The American Lawyer. The survey, conducted by legal software company Aderant, indicated that law firm professionals have a rosy view of their potential business. More than half of the survey’s respondents—some 57 percent—reported that business was “better” or “much better” at their law firms than it was over the prior year.
Beyond the survey’s findings about law firms’ business optimism, Aderant also asked respondents to name the most significant challenges facing their firms. According to the survey, the top five challenges facing law firms included pricing pressure, cybersecurity, operational efficiency, technology adoption and competition. Among respondents polled from US firms, cybersecurity jumped from sixth place in this survey the previous year to tie for the top spot with pricing in 2018, (as quoted in The American Lawyer).
The survey also included questions about innovation and new technology. While innovation is a hot topic in the legal industry, Aderant reported that more than 70 percent of respondents said their firm does not have anyone on staff specifically dedicated to innovation. But that response changes as law firm size grows, according to the survey. Just shy of 56 percent of respondents from firms with more than 500 lawyers said their firm had a staff member focused on innovation and new technology issues, (as quoted in The American Lawyer).
See highlights from the full report and article on The American Lawyer.
Contact Bill Sugarman for more information.
The American Lawyer released their 31st annual Am Law 100 report, which includes data and rankings for the nation’s 100 highest grossing law firms. Overall, gross revenue increased on average by 5.5 percent, net income increased by 6.1 percent, profit per equity partner grew by 6.3 percent, revenue per lawyer moved up 3.2 percent, and headcount rose 2.2 percent.
According to the report, thirty-one firms posted gross revenue over $1 billion in 2017, four more law firms than in 2016. Additionally, eighty-five firms reported gains in revenue, up from 82 firms last year. Kirkland & Ellis landed the No. 1 spot as the highest grossing firm in 2017, with $3.165 billion in revenue, up 19.4% from the previous year. Latham & Watkins, who had been on top for the last three years, dropped one spot to No. 2 with a record $3.064 billion in revenue. Baker & McKenzie remained in the No. 3 spot, with $2.670 billion in revenue. DLA Piper advanced one spot to No. 4 this year, after a 6.6% increase in revenue, knocking Skadden Arps down to the No. 5 spot.
“Despite increasing pressures on price and demand, more firms saw growth in revenue and profits in 2017 than they did in the prior year. A closer look at the data shows the firms toward the top of the 100 are growing at faster rates than the bottom half of the list, continuing a trend of stratification we have seen building over years. But all in all, most firms figured out a way to show increasing returns in 2017,” notes Gina Passarella, Editor-in-Chief of The American Lawyer.
See highlights from the full report and article on The American Lawyer.
Contact Bill Sugarman for more information.
Law firm mergers remained robust during the first quarter of 2018, with a strong outlook for cross-border combinations, according to a recent report by legal consultancy firm Fairfax Associates. In the first quarter of 2018, Fairfax tracked 20 completed mergers, which counts combinations once they are completed. According to the report, this number is slightly lower than the 22 mergers completed during the same time last year, however, is still on par with historical averages.
Despite a fairly quiet cross-border merger market in the first few months of 2018, Fairfax principal Lisa Smith notes that there continues to be a lot of interest in combinations that transcend national boundaries. “We see an awful lot of interest from particularly U.K. firms continuing to look at the U.S. market, but U.S. firms also continuing to look at their international strategies,” Smith said. “I think that’s a continuing big trend,” (as quoted in The American Lawyer).
On the domestic front, many mergers completed within the first quarter were smaller or at the regional level. Nearly 75 percent of the firms involved had between five and 20 lawyers, according to Fairfax, with the largest purely domestic tie-up being between Ballard Spahr and Minneapolis-based Lindquist & Vennum, a union that became effective on Jan. 2. “We see a mix of a lot of smaller firm acquisitions, many of which are smaller mid-sized firms combining with other smaller mid-sized firms,” Smith said (as quoted in The American Lawyer).
See highlights from the full report and article on The American Lawyer.
Contact Bill Sugarman for more information.
Frustration with high legal fees and demand for local regulatory knowledge may give small and medium-sized law firms an edge with larger clients, according to a survey reported by The American Lawyer. The survey, released by the Economist Intelligence Unit and business-to-business marketplace Globality, found that multinational companies are seeing benefits in working with small and medium-sized firms because they can offer the same quality of legal advice at more reasonable prices.
According to the report, smaller firms can be more cost-effective because they have lower overheads, allowing them to charge more moderate rates. As a result, they are able to provide the same legal expertise at a lower cost. They can also often provide regional or specialized expertise because they focus on providing services in a specialized community or area of the law. That can be appealing for multinational organizations that may have legal issues in different international jurisdictions [as quoted by Globality].
“Companies often highlight that they like the personalized experience and top-level attention from senior lawyers that smaller providers can bring to them, which is something that larger law firms need to determine how to emulate,” notes Stefan Zorn, Vice President of Customer Success at Globality.
See highlights from the full article and survey on The American Lawyer.
Contact Bill Sugarman for more information.
In the latest March 2018 issue, Chicago Lawyer published results from their 16th annual survey of Illinois’ largest law firms and spoke with managing partners at Chicago firms that have seen strong growth in recent years, including two of our clients Faegre Baker Daniels and Akerman.
Faegre Baker Daniels, for example, has proven that they have the right approach for Chicago growth, successfully growing their seven-attorney starter office to over 60 in just eight years. According to Chicago Lawyer’s latest survey results, Faegre Baker Daniels is the 58th largest firm in Illinois, up from 67th last year, and plans to have more than 100 lawyers in the Chicago office over the next few years. “We’re cognizant of the fact that the growth is primarily not going to come from our main markets, so we’re looking to grow in other markets,” notes Chicago managing partner, Rick Michaels. “There’s no limitation or desire to have a limited presence here. Our goal is to have [Chicago] be one of the growth vehicles for the firm as a whole.”
For Akerman, a mid-sized, full-service firm based out of Miami, growth has been a response to client demand. Chicago managing partner Scott Meyers discussed with the publication how client demand has continued to shape Akerman’s growth in Chicago, after firm headcount increased from eight to 51 lawyers since opening its doors in 2014. According to Chicago Lawyer’s recent survey, Akerman is the 67th largest firm in Illinois, up from 86th in 2017. “We did not come to Chicago just because we wanted to grow. We came to Chicago because our clients wanted us to be here. We have always worked backwards from ‘What do our clients need? What do our clients want? What do our clients expect us to be?’ rather than a strategy of ‘If we build it the clients will come,’” Meyers notes.
See highlights from the full article and survey on Chicago Lawyer.
Contact Bill Sugarman for more information.
The American Lawyer released a recent report, conducted by LexisNexis’ legal pricing data service, CounselLink, which revealed the gap between partner hourly rates for firms with 750+ lawyers and firms with 501-750 lawyers continues to grow. According to the report, the gap between the two groups widened by 11 percent over 2016, with the bigger firms now demanding a whopping 45 percent higher rate on average than their less gigantic counterparts.
The report also revealed rate increases were higher and more widespread than in previous years. The report showed that Seattle, Chicago, Los Angeles and Boston all rivaled New York for partner billing rate increases. The Big Apple firms still led the pack, with a 5.7 percent growth rate. But firms in those other cities experienced greater than 4 percent annual growth in their rates. Nationwide, partner rates increased an average of 3 percent, with Minnesota, Georgia, Oregon and California seeing the highest increases on a statewide basis, (as quoted in The American Lawyer).
See highlights from the full article on The American Lawyer.
Contact Bill Sugarman for more information.
The American Lawyer released results from its annual Lateral Report, which tracked lateral movement strategies among the nation’s largest and most successful law firms. The report, conducted by ALM Intelligence, reported 2,895 lateral moves among Am Law 200 firms in 2017, decreasing 2.3% from 2016. According to the report, law firm leaders reported a variety of strategies aimed at improving lateral hiring such as geographic expansion, spending top dollar on superstar partners, hiring lateral groups, recruiting experts in other fields, and expanding lower cost-firms in larger markets.
Chicago-based Winston & Strawn hired the most lateral partners of any Am Law 200 firm, the report revealed. The firm brought on 73 partners, representing nearly 22 percent of its partner ranks. DLA Piper hired the second-most partners, 69—a mere 5.7 percent of its partnership. The next three firms to grow their partner ranks by more than 10 percent through lateral hiring included Cozen O’Connor, Fox Rothschild and Hogan Lovells opening new offices in Pittsburgh, Los Angeles and Seattle, respectively (as quoted in The American Lawyer).
Kansas City, Missouri-based Polsinelli is another firm to see recent growth in the lateral partner market. Much of the firm’s recent growth has been in Chicago, where it has grown from just six lawyers in 2006 to 99 as of last December. The firm has found success recruiting from some of the city’s legacy firms, many of which have pursued a more international, higher-profit model (as quoted in The American Lawyer).
See highlights from the full article on The American Lawyer.
Contact Bill Sugarman for more information.
Law firm financial performance finished 2017 on a positive note, with a larger segment of the legal market contributing to upward trends in revenue and profits than in recent years, according to a new report by Wells Fargo Private Bank’s Legal Specialty Group.
The report, drawn from a survey of 160 firms, reported that law firm revenue and profits were up between 3 percent and 4 percent for the legal market overall. Firms in the Am Law 50 reported revenue growth of 6.8 percent in 2017, while the Am Law 100 as a whole reported a 5.26 percent increase in revenue. Firms in the Am Law Second Hundred saw a smaller revenue uptick of 2.33 percent in 2017, the report revealed (as quoted in The American Lawyer).
“The enthusiasm is derived from a slight-to-moderate improvement in transactional activity,” the Wells Fargo report said. “Most believe the corporate tax changes and a general improvement in our economy will buoy corporate, M&A, capital markets, and other transactional work.”
See highlights from the full article on The American Lawyer.
Contact Bill Sugarman for more information.