Two of the Big Three Annual Reports on the state of Law Land are now out and it’s time for a survey of the horizon and some perspective.  (The Big Three are the Altman-Weil “Law Firms in Transition” report [not yet released], the Citi/Hildebrandt annual client advisory, and the Thomson-Reuters/Georgetown “Report on the State of the Legal Market.”)

Methodological note: Each report covers its own quasi-proprietary universe of law firms, and no specific firms are identified.  So although you can surmise, and I do, that there’s some meaningful Venn diagram overlap among the three reports in the sample sets, no one knows how extensive it might be.  (And none of the three is coterminous with the AmLaw 100 or 200, for the record.)

Citi first:  As we’ve written in the past, to our taste this report can stray a bit into cheerleading, or at least glass-three-quarters-full mode, but this year’s edition seems more balanced, if only because some of the underlying data is actually strong, taken at face value:

  • Revenue up by 6.3% during the first nine months of 2018;
  • Billing rates up 4.3%
  • Demand growth +2.5%

Many of these figures are the strongest the industry has seen since the Great Meltdown.

On the other hand, as Citi almost immediately adds, dispersion among firms’ results continues to grow.  They (as Thomson Reuters) employ the familiar AmLaw rankings as a segmentation/categorization tool, and describe the dispersion in terms of bigger vs. smaller: Specifically,

For several years, we have seen the lion’s share of Am Law 200 revenue and profit growth concentrated among the Am Law 50 firms—largely at the expense of the Am Law Second Hundred. This trend of the market favoring the Am Law 50 was particularly pronounced during 2018. Overall, average demand across the Am Law 50 rose by 3.3 percent during the first nine months of 2018—a noticeably higher rate than any of their smaller peers. In fact, 76 percent of Am Law 50 firms recorded some level of demand growth during the first nine months of 2018. By contrast, the Am Law Second Hundred saw a demand decline of 0.2 percent during this same period.

Familiar as AmLaw sizing is, we think for purposes of market segmentation it has long since outlived its usefulness and that “categories” such as AmLaw 1-25/50/100/200 have become devoid of descriptive or analytic validity.

Nevertheless, here’s their nifty chart showing the growth/shrinkage in revenue among the AmLaw 1-50, 51-100, and Second Hundred:

Related Articles

Email Delivery

Get Our Latest Articles Delivered to your inbox +

Sign-up for email

Be the first to learn of Adam Smith, Esq. invitation-only events, surveys, and reports.

Get Our Latest Articles Delivered to Your Inbox

Like having coffee with Adam Smith, Esq. in the morning (coffee not included).

Oops, we need this information
Oops, we need this information
Oops, we need this information

Thanks and a hearty virtual handshake from the team at Adam Smith, Esq.; we’re glad you opted to hear from us.

What you can expect from us:

  • an email whenever we publish a new article;
  • respect and affection for our loyal readers. This means we’ll exercise the strictest discretion with your contact info; we will never release it outside our firm under any circumstances, not for love and not for money. And we ourselves will email you about a new article and only about a new article.

Welcome onboard! If you like what you read, tell your friends, and if you don’t, tell us.

PS: You know where to find us so we invite you to make this a two-way conversation; if you have an idea or suggestion for something you’d like us to discuss, drop it in our inbox. No promises that we’ll write about it, but we will faithfully promise to read your thoughts carefully.