For years—decades, really—the legal industry has suffered from a woeful shortage of meaningful, truly informative ratings of law firms.[1] Today we intend to change that.

Introducing the Leopard Law Firm Index, powered by Leopard Solutions and in partnership with Above the Law and Adam Smith, Esq.

What makes the “Leopard Index” different?

First and foremost, it’s the only industry index based on purely quantitative, “un-gameable” datasets that are: (a) numeric; (b) corrected as appropriate for firm size; [2] (c) not at risk of being compromised by cosmetic adjustments as firms self-report; and (d) not our own secret guesstimates.  And we selected each of these datasets for its correlation with an upward trajectory for a law firm.

This weighted suite of factors avoids the invitation to fixate on one or two “headline” numbers, too simplistic in evaluating an enterprise as complex as a law firm.  Don’t get us wrong: No question that it’s entertaining to rank firms head to head by revenue, number of lawyers, or other more invidious metrics. We enjoy it as much as you do. But we’ve never confused these rankings with a system that would provide solid insight into the quality or value of the firm’s work or clients’ experiences—or the firm’s own sustainability or fragility. That’s where the Leopard Law Firm Index comes in.[3]  (You can register for a free introductory webinar here.)

Data you can act on

We started with the legal industry’s historical, and shocking, paucity of data that firms might use to guide their strategic and business decisions. Pair that with the reality that challenges to firms from all fronts were already building before the “Covid Slingshot” accelerator kicked in, and we thought the time had come to try fixing what we saw as an indefensible state of affairs.

As important as the integrity of the ingredients going into the Leopard Index are the philosophy and purpose we brought to designing it. For our money it had to serve as a useful tool for firm management.

Gross calculations of revenue or size are tangentially, if that, correlated with a law firm’s health, but the Leopard Index takes a quite different approach: Each of our metrics provides a measure of a firm’s vitality and resilience—datasets that go to the heart of a firm’s operational and financial hygiene. For example? (a) The past five-year record of growth/decline in RPL. (b) Average lawyer tenure at a firm. (c) Growth/decline in lawyer headcount. (And more—see below)

Dynamic

Better yet—and unique to ratings in our industry—the Leopard Index is dynamic. As datasets are updated (as often as weekly for some series), the index changes in real-time. No waiting for next year to see what the scorecard says this time around.

The importance and power of introducing the first law firm index driven by continuously updated information may not be immediately obvious, but that has become the way the rest of the world works.  Newspapers are no longer updated just once a day when the print edition is finalized; news can break at any time.  Similarly, law firms grow, shrink, merge, start up, and dissolve all the time; any self-respecting index should reflect reality on the ground, but the Leopard Index is the first and right now the only one to do so.

The Index is dynamic in another important way. Its design and component parts will continue to evolve, refining and adding criteria to be even more reflective of law firm health. On top of that, more firms will be included as threshold data is received or developed; we’re imposing no arbitrary 250/500/1,000 firm “capacity limit” on the Index.

Fine.

So why should readers of Adam Smith, Esq. care?

Because now at long last we have a tool for management to assess their firm’s strengths and weaknesses using information they can act on.

Countless are the times firms have asked us, “What are the best practices in the industry?” Through hard-earned experience, we have figured out what they’re really asking is, “What’s the herd doing?” Even when the answer is readily available—that is, if the shortage of industry data doesn’t stymie you right there—the answer to the question is never what the “best” practices are: It’s what the lowest common denominator is.

The Leopard Law Firm Index suffers no such constraint. You can see your firm’s score on each metric, but also how high or low other firms fall, opening up your possibility horizon.

Bottom line

At long last, the law firm industry has a firm index (a) based on objective data, (b) correlated with firm sustainability and strength, and (c) which provides specific insights that managers can actually use to fine-tune performance.

We’ll be publishing a second article on the Leopard Index delving into how your firm might be able to use it as a management tool, in the near future.

For those of you interested in the details, here they are.

What’s included in the Leopard Law Firm Index?

The index is currently based on seven weighted indicators of law firm sustainability. These eliminate bias for relative size of firm. We included the following factors:

• Growth or decline in lawyer headcount
• Average lawyer tenure at a firm which speaks to relative stability of a firm
• Insider rating – Internal firm satisfaction; the higher the better in service to clients
• Growth/decline in revenue per lawyer (RPL) over a 5-year period, indicating increases or declines in how clients value the lawyers at a firm
• Relative success in lateral recruiting and retention (partners and associates)[4]
• Relative success in recruiting and retaining entry-level lawyers
• Promotions to partner as a percentage of eligible associates

Most of this data is sourced from Leopard Solutions’ unmatched, proprietary, quantitative data base, which is continuously updating research on over 246,000 individual lawyers and over 3,300 law firms in the US, alone.

The index components will be continually evaluated and updated.

Is the Leopard Law firm Index perfect?

No.  No individual study or report can suffice on its own. It’s important to look at a variety of sources, and importantly internal metrics, to get a more complete view of any firm.

In any model (of any kind) there are a few “outliers”; in this case, firms that perform in anomalous, or counter-intuitive ways.  For example, some firms (not many) have adopted a strategy of eliminating lower-performing practice areas. If they’re serious about that, their lawyer headcount and possibly “average lawyer tenure” scores will decline. That said, the Leopard Law Firm Index lets you quickly drill down into your data, compare that versus your strategies (goals and aspirations) and other data sources – to see opportunities you can capitalize on or weaknesses you’ll want to address.

Finally, not all data points in the Leopard Law Firm Index are available for all firms, which can impact the weighting. We will continue to fill in missing data, which will be reflected in our frequent updates.

So who’s behind this?

Leopard Solutions delivers the highest quality, most accurate and in-depth information on the legal market, leading law firms, and attorneys with easily searchable products.

We are a proud WBE organization that has grown into one of the most recognized and trusted legal market data providers in the United States. Our technology and the data are continuously updated to ensure market relevance and your competitive edge. Leopard Solutions’ high level of quality and depth is unmatched in the industry.

Above the Law is the most widely read source for original legal news and commentary. The ATL audience comprises everyone from GCs and Biglaw partners to the ranks of 1Ls. Written by lawyers for lawyers, ATL covers all aspects of the legal industry: from the Judiciary and law schools to Biglaw firms and legal technology innovators. ATL is the first with salary and bonus information and is a hub of professional advice and insight for legal professionals at all career stages. ATL is part of the Breaking Media network of sites.

And yours truly at Adam Smith, Esq.

[1] Not that there’s any shortage of reports—they’ve multiplied like kudzu as the legal media has embraced the business model genius of a product that can be compiled once and sold over and over at zero-marginal-cost. So in the States we have the Global 100 and the Global 200, the AmLaw 200, the NLJ 250, 350, 500, the “A List,” The Diversity Scorecard, the Pro Bono Scorecard, The Vault 100; and in the UK The Legal 500, The Lex 100, The Global Litigation 50, Asia-Pacific 100, US Top 50 (in London), European 100, and the Chambers Everything. Apologies if we omitted anything, because surely we have.

^[2] Growing or shrinking by 10 lawyers means one thing to a 50-lawyer firm and something quite different to a 3,000-lawyer firm; the results you see correct for that.

[3] Each firm’s rating on the Leopard Index is presented only in graphic form, along the familiar green/yellow/red continuum. We chose this policy very much on purpose: The “narcissism of minor differences” (with thanks to Freud) is not a helpful or enlightening pastime, so yes, we’ve taken away that set of marbles.

[4] Relative success of a firm’s recruiting and retention efforts (lateral and entry-level) is based on when a lateral or new hire is likely to have achieved net profitability (ROI) and is more likely to stay at the firm.