It’s official, according
to The Lawyer: For Skadden and six other firms,
2005 was indeed, as Skadden’s New York-based M&A partner Tom
Kennedy put it, "a very good year."
For the first time ever, seven US firms topped
$1.0-billion in revenue, Skadden first among this august pack at
$1.58B, and Weil-Gotshal at $1.00B (the suspiciously round number
doubtless making some wonder if they’ve been taking accounting
lessons from Jack Welch (and see this),
but at "Adam Smith, Esq." we tend to take these reports at face
value absent insider info to
the contrary—which
we utterly lack here). Here’s the breakdown of the top 20
US firms by revenue:
| US TOP 20 FIRMS |
| Rank | Firm | Location | Rev 2005 | Rev 2004 |
% change
|
PEP 2005 | PEP 2004 |
% change
|
||||
| ($m) | (£m) | ($m) | (£m) | ($K) | (£K) | ($K) | (£K) | |||||
| 1 | Skadden | New York | 1,580.0 | 903.7 | 1,440.0 | 823.7 |
10
|
1,850 | 1,058 | 1,735 | 992 |
6.5
|
| 2 | Latham & Watkins | Los Angeles | 1,400.0 | 800.8 | 1,206.0 | 689.8 |
16
|
1,600 | 915 | 1,405 | 804 |
14
|
| 3 | Baker & McKenzie | Chicago | 1,352.0 | 773.3 | 1,228.0 | 702.4 |
10
|
750 | 429 | 655 | 375 |
14.5
|
| 4 | Jones Day | National | 1,309.0 | 748.7 | 1,190.0 | 680.7 |
10
|
808 | 462 | 735 | 420 |
10
|
| 5 | Sidley | New York | 1,124.0 | 642.9 | 1,029.0 | 588.6 |
9
|
1,235 | 706 | 1,020 | 583 |
21
|
| 6 | White & Case | New York | 1,050.0 | 600.6 | 953.0 | 545.1 |
10
|
1,240 | 709 | 1,220 | 698 |
2
|
| 7 | Weil Gotshal & Manges | New York | 1,000.0 | 572.0 | 905.0 | 517.6 |
10.5
|
1,850 | 1,058 | 1,700 | 972 |
9
|
| 8 | MBR&M | Chicago | 979.0 | 560.0 | 911.0 | 521.1 |
7.5
|
968 | 554 | 905 | 518 |
7
|
| 9 | Kirkland Ellis | Chicago | 935.0 | 534.8 | 835.0 | 477.6 |
12
|
2,170 | 1,241 | 1,975 | 1,130 |
10
|
| 10 | Sullivan & Cromwell | New York | 916.0 | 523.9 | 833.0 | 476.5 |
10
|
2,590 | 1,481 | 2,350 | 1,344 |
10
|
| 11 | Shearman & Sterling | New York | 830.0 | 474.7 | 775.0 | 443.3 |
7
|
1,380 | 789 | 1,150 | 658 |
20
|
| 12 | Wilmer Hale | Washington DC | 815.0 | 466.2 | 750.0 | 429.0 |
8.5
|
915 | 523 | 870 | 498 |
5
|
| 13 | Cleary Gottlieb | New York | 813.0 | 465.0 | 695.0 | 397.5 |
17
|
1,970 | 1,127 | 1,715 | 981 |
15
|
| 14 | O’Melveny & Myers | Los Angeles | 808.0 | 462.2 | 697.0 | 398.7 |
16
|
1,610 | 921 | 1,310 | 749 |
23
|
| 15 | Morgan Lewis | National | 805.0 | 460.4 | 723.0 | 413.5 |
11
|
1,002 | 573 | 900 | 515 |
11
|
| 16 | McDermott | Chicago | 799.5 | 457.3 | 745.0 | 426.1 |
7
|
1,190 | 681 | 1,119 | 640 |
6
|
| 17 | Greenberg Traurig | National | 860.0 | 491.9 | 712.0 | 407.2 |
21
|
N/A | N/A | 985 | 563 |
N/A
|
| 18 | Gibson Dunn | Los Angeles | 746.0 | 426.7 | 693.0 | 396.4 |
8
|
1,635 | 935 | 1,516 | 867 |
8
|
| 19 | Simpson Thacher | New York | 730.0 | 417.5 | 691.0 | 395.2 |
6
|
2,400 | 1,373 | 2,330 | 1,333 |
3
|
| 20 | Hogan & Hartson | Washington, DC | 690.0 | 394.7 | 630.0 | 360.3 |
9.5
|
900 | 515 | 825 | 472 |
9
|
The indubitable Financial Times, which has always covered
law-land better than the WSJ, also has the
story.
As you can see, more than half recorded revenue jumps in the
double-digit percentages, and PPP increases were even better.
More impressive still? What I call the "Complexity Quotient"
of managing a sophisticated professional services firm. According
to my friends in management-consulting ranks, the rule of thumb
they employ when estimated the challenges facing leaders of a professional
services firm as contrasted to those facing management of a retail,
manufacturing, or construction firm (say) is that $1.00 of professional
service revenue is 5 times more complicated than $1.00 of garden-variety
revenue.
Which means Skadden isn’t strictly comparable to a $1.5-billion/year
"regular economy" firm, but rather to a $7.5-billion/year firm
in more conventional sectors. This would make them, by revenue, one-quarter the
size of Intel, or nearly
as large as the domestic video-game industry.
Which leads those of a contrarian frame of mind (moi?!) to pose
the following question to you, smart and savvy readers:
Rules of the poll road:
- I will leave it up for about 10 days.
- Multiple answers are permitted, but we trust your discretion in keeping
them internally consistent. - You’ll read all about the results right here, so stay tuned.
In the meantime, my kudos to Earle
Yaffa.
