The National Law Journal released its annual NLJ 500 rankings, which analyzes headcount data on the nation’s largest 500 law firms. According to the report, the number of lawyers in the NLJ 500 grew 2.5% in 2018 to 169,477, and the average firm size rose by eight lawyers last year to 339. By comparison, the NLJ 500 grew by 1% in 2017 and by about 2% in 2016. Partnerships expanded by just over 1% last year, driven by nonequity partnership growth of 3.8% in 2018, the report also revealed.
According to the report, three firms in the top ten saw upward movement including Latham & Watkins, Kirkland & Ellis, and Morgan Lewis. New York, Washington D.C., Chicago, Los Angeles and Boston were the top cities with the most lawyers in this year’s NLJ 500. Additionally, one group that showed unexpected growth in the 2019 NLJ 500 was the category of “other” lawyers, which encompasses counsel, senior attorneys, of counsel and staff attorneys. This cohort showed a net gain of 1,171 lawyers—up 6.4% in 2018. That’s compared to a net gain of 99 lawyers, or just 0.5%, in 2017.
“The 2019 NLJ 500 tells the story of more growth in 2018 than we saw in the previous two years,” said Lisa Helem, Editor-in-Chief, The National Law Journal. “Overall, the 2019 NLJ 500 findings, especially at the top of the list, along with profit increases for much of the Am Law 200, reflect an industry enjoying rising demand and faster growth. The average head count increase—still in the low single digits—is a far cry from the 4% or 5% growth firms saw in the pre-recession period from 2005 to 2008. But given the ugly contraction that followed, there’s something to be said for this year’s more modest gains,” (as quoted in The National Law Journal).
Contact Bill Sugarman for more information.
Certain Midwest and second-tier markets, in terms of population, have garnered particular interest from large law firms, especially those that serve middle-market clients, reports Lizzy McLellan of The American Lawyer. According to statistics from AmLaw’s latest NLJ 500 survey, the number of lawyers at NLJ 500 firms grew by 100 or more in each of the Washington State, Illinois, Minnesota and Michigan markets.
“There are a lot of firms that started out in the secondary, tertiary markets that now have offices in lots of other secondary, tertiary markets,” notes Mary K. Young of the Zeughauser Group. When those firms make entry to a new market, she adds, they often acquire or take from smaller local firms that would not have made it onto the NLJ 500 on their own, (as quoted in The American Lawyer).
David Barnard of Blaqwell Inc. also notes that small firms based in smaller markets are increasingly looking for merger opportunities. “Specialization is continuing. It’s no longer possible to do everything. It’s just too tough,” he said. So small practices have to choose their strengths and double down there. After doing that, he says, “the lawyers in those towns are combining so they can offer full service to local clients and maintain their livelihood,” (as quoted in The American Lawyer).
Contact Bill Sugarman for more information.
Data collected by ALM Intelligence reported millennials (ages 18 to 36) now outnumber lawyers from Generation X (ages 37 to 52) and baby boomers (ages 53 to 71) at firms in the Am Law 200 and The National Law Journal’s NLJ 500. According to the report, millennials make up 43 percent of lawyers at nearly 400 of the nation’s top law firms included in ALM’s data. Millennials represent 88 percent of associates and only 5 percent of partners. Generation X lawyers make up 52 percent of partners, and baby boomers make up 40 percent of partners.
“The numbers starkly illustrate the reality facing law firm leaders: Millennials will soon take over the legal profession in sheer numbers—and soon enough they’ll dominate leadership positions and partnerships too,” ALM journalist, Lizzy McLellan reports. “Employing millennials appears to go hand-in-hand with profitability—illustrating how Big Law continues to use rainmakers to land major clients and young lawyers to put in long hours serving them.”
Please contact Bill Sugarman for more information.
The National Law Journal released the very first NLJ 500 this year: a compilation of the 500 largest U.S.-based law firms. This year, in addition to the annual report of the top 350 largest firms, NLJ included 150 more law firms and ranked those into two tiers: “mid-tier” and “on-the-cusp-of-Big-Law” firms.
Dentons, previously one of the largest U.S. firms, has been removed from the NLJ 500 due to its expansion and large number of attorneys in China. In order to make the cut, firms must have more lawyers in the U.S. than in any other country. It comes as no surprise that Baker & McKenzie is leading the chart for a second year with a mass of 4,363 lawyers.
San Francisco based Farella Braun + Martel just made the cut making them the smallest firm in the top 350. Overall, the smallest firms that made the NLJ 500 were Davis, Brown, Koehn, Shors & Roberts in Des Moines; Goldberg Kohn in Chicago; and BatesCarey in Chicago. The most shocking decline on the NLJ 500 for 2015 was Kenyon & Kenyon’s 29% decrease in head count of attorneys.
For more information, contact Bill Sugarman.