The Economist has an infuriatingly brief article referencing
the annual ranking of the 50 "global elite" law firms by the British
publication Legal Business. First, to the article, second,
to the first ever "Adam Smith, Esq."-faithful-reader-awards contest.
Legal Business’s methodology in selecting its cadre of the
"global elite" is a bit obtuse, but its key elements seem to include:
- being among the world’s 50 most profitable (why not end the discussion
right there?; for that matter, how can there be any criteria beyond
this one if this one is taken at face value?); - have a "disproportionately high number of Fortune 250 or FTSE-100
clients" (and who among these firms does not have a very high proportion
of such clients, making the notion of "disproportionality" somewhat
confounding); - "be a leader in its home jurisdiction" (see above);
- "be regarded as serious competition in [key practice areas] by the
top firms on both sides of the Atlantic" (see above), - etc.
Among other things, these perverse criteria succeed in excluding Wachtell-Lipton
from the listing altogether, since it has only one office, in New York.
In any event, the faithful Economist scribe
endeavors to do what he can with the resulting list and ventures two
hypotheses about what characteristics might equate to, or at least correlate
with (there is a difference, of course) higher profits-per-partner:
- being "relatively" small, in this case < 850 lawyers (cf. the
Magic Circle at 2,300—3,000 lawyers); and/or - keeping your international headcount relatively low: Evidence
for this is that Slaughter & May, the most profitable of the Magic
Circle, has fewer than a quarter of its lawyers outside the UK, whereas
Clifford Chance, the least profitable, has nearly two-thirds abroad.
What does this all add up to?
First of all, let’s again hear it for the home town! Of the top
10, 8 are New York powerhouses (in rank order: Cravath, Sullivan
& Cromwell, Simpson-Thacher, Davis-Polk, Skadden, Cleary, Shearman &
Sterling, and Latham & Watkins [OK, New York-centric, I would argue]). Only
two UK firms make the top 10: Slaughter and May at #8 and Herbert
Smith at #10.
Second, I don’t have a clue how to analyze or gain insight into this
further without being able to read the actual article and, with any luck,
its source material.
This brings me to The First-Ever "Adam, Smith, Esq." Reader
Awards Challenge.
The key publication at issue, Legal Business, is not available
on-line (trust me, I’ve tried) and a one-year print subscription costs
a lofty £495, for 10 issues. For that price, I could take
my wife to dinner 10 times, even in New York (Econ. 101 labels this my “opportunity cost” of a subscription; I label it a vastly preferable way to spend the money).
Thus the Reader Award Challenge: Any reader who subscribes to Legal
Business and is willing to forward copies they’re finished with
to me wins:
- an "Adam Smith, Esq." T-shirt (design of which is in development);
and - drinks on me next time you’re in New York.
There will be only one winner, to wit the first respondent. All
decisions of the judges, as they say, are final.
