The AmLaw 200 (it’s actually the AmLaw 101—200, but that’s nitpicking)
is out and
if "a few anecdotes make a trend," let us be among the first to claim
such an insight: The AmLaw 200 is no longer a ghetto for small
firms in big markets or big firms in small markets, but instead is announcing
through the very conspicuous number of $1-million+ profits-per-partner
members that you don’t have to be big to be rich. To be specific,
in the past four years of publishing the AmLaw 200, only one firm broke
that threshold; this year seven did (vs. 32 firms in the AmLaw 100).
How did they do it? I’m actually going to be working on some
regression analysis of the numbers in the near future to see if anything
statistically significant can be said, but for now one strategy seems
to be, "Specialize." (Of course, as many mutual fund
managers learned to their dismay ca. spring of 2000, picking the wrong
specialty horse—say, dot-coms and telecoms—can demonstrate
the power of that strategy in an unintended direction.)
Another factor that is highly suggestive (again, we await statistical
analysis) is not having a two-tiered partnership, with
equity- and non-equity partners. Counterintuitive as this appears
at first (isn’t leverage always good?), there may be cultural and psychological
factors distinct to sophisticated law firms that make the value of unity
and cohesion superior to the financial-ratio advantage a two-tiered system
would introduce.
In the meantime, here’s the revenue distribution graphically. Note
how much smoother it is (what a surprise!) than the AmLaw 100’s.
