With the annual publication of the AmLaw 100 and Second Hundred, it’s rankings season for BigLaw.
Think of it as our little industry’s equivalent of earnings season for public companies—we having become a “quasi public” industry, as one of my favorite managing partners has observed. The difference is that we report our financials annually as opposed to quarterly—as well as the distasteful detail that the financials we share with the press are, virtually without exception, not only unaudited per GAAP but not even perfunctorily attested to for veracity.
Across the pond we have comparable numerical tabulations to the AmLaw 100, such as The Lawyer‘s UK 200, Hot 100, and International Top 30. Here we also have the American Lawyer‘s own grab bag of elements making up their “A List,” and even the venerable category “Magic Circle” is a list of sorts, as well as a journalistic jackpot of a coinage if ever there were one.
But it’s high time, and past that, to ask whether the epistemological underpinnings of these kinds of broadly encompassing rankings can withstand analytic scrutiny. Because they can’t.
Even the narrowest, by far, of the lists we’ve enumerated—the Magic Circle—may be losing whatever fencing-in/fencing-out utility it once had. A lead story in the current Lawyer‘s comprehensive coverage of the Magic Circle as of 2015 is headlined, “Together but not the same,” and begins “The magic circle is often seen as a homogenous group of firms, but our analysis of their global investments throws up considerable differences.”
Simon Davies, head of Linklaters, has already made up his mind about the impact of market solvents on the category’s integrity as a substrate:
‘The magic circle isn’t what it used to be in the context of the US market or any market. I don’t think it’s going to gain power or momentum and I don’t think it’s a strengthening brand in itself,’ he says. ‘At the end of the day we see ourselves as one of the leading global law firms, not one of the leading magic circle firms.’
But what about the Granddaddy ranking scorecard, the #1 list in mindshare by far in the largest law firm market in the world—the AmLaw? Well, AmLaw itself has spent the last few years increasing the proportion of space devoted in its annual coverage to the theme that the 100 consist of at least three sharply distinct species—the “Super Rich” top 10% or so, vereins, and everyone else. (The Super Rich are somewhat arbitrarily but not irrationally defined as firms with RPL over $1.0-million and PPP over $2.0-million.)
It’s patently obvious why vereins deserve their own non-intersecting circle on the Venn diagram representation of the AmLaw, but what about the Super Rich? Aren’t they just law firms like all of us, only with the right mix of elite clients, practice areas, and geographic footprint?
Industry participants and observers from AmLaw itself to Citigroup Private Bank, ThomsonReuters Peer Monitor, managing partners of some of the firms themselves (anonymously and off the record), and yes, your faithful friends at Adam Smith, Esq., have all identified the phenomenon of the Super Rich’s pulling away from the rest, using such phrases as “accelerating segmentation,” an “unbridgeable” and “insurmountable” gap, and saying (AmLaw, in its May 2015 cover story on the 100), “the widening gulf in profits is even more extreme [this year than in the past].”
This makes one ask, “Why?” What are they doing that everybody else is not doing? What secret are they privy to that the rest of us are not?