Just look at how theyve grown. Twenty-five years ago, The American Lawyer published its first list of the 100 highest-grossing law firms in the country, a group that collectively generated more than $7 billion in revenue in 1986. Eighty-one of those firmslet’s call them the Legacy Firmsare still on the Am Law 200; in 2011, they alone generated a total of more than $58 billion in revenue. It’s a growth story that would make any parent proud. But how have those firms compared to each other over the past quarter-century? And more important, how did they stack up against the overall economy?
Growth can never be wholly defined by a single measure. But to answer these questions and effectively analyze 25 years of data, we needed to simplify. Our yardstick of choice was revenue per lawyer, long The American Lawyer ‘s favored metric for assessing a firm’s financial health. In an industry based on client service, revenue per lawyer is a proxy for client quality and satisfaction, as measured by the fees and premiums that clients are willing to pay. It also reflects the number of hours a firm’s lawyers are able to bill (and realize), and how efficiently a firm manages its head count and utilizes its lawyers. And even though RPL is based on a firm’s top line, it’s often a leading indicator of firm profitability: Firms with high per capita revenues are much more likely to richly line their partners’ pockets (among the latest Am Law 100, 15 of the top 20 firms as measured by profits per partner are also in the top 20 as measured by RPL).
