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The American Lawyer recently published results from its annual Am Law 200 report, noting that for the first time in years the second hundred largest grossing law firms matched the growth of the top one hundred in nearly every key financial metric. Overall, the Second Hundred increased gross revenue on average by 5 percent, profit per equity partner grew 4.6 percent, revenue per lawyer increased 2.9 percent, and overall headcount rose 2.1 percent.

According to the report, twenty-one Second Hundred firms saw double-digit revenue growth and forty firms saw revenue increase by more than five percent. Within those numbers, there were pronounced differences among different groups in the Second Hundred, as firms ranked 151 through 200 nearly doubled the growth of those ranked 101 through 150, posting a 7.2% revenue increase on average, compared with 3.9% for the top half of the list, the report notes.

Among the Second Hundred firms, Burr & Forman had the largest increase in revenue, jumping 14 spots to No. 155, up 32% from last year. Two firms dropped from the Am Law 100 to the Second Hundred this year: Baker Donelson (101) and Williams & Connolly (102). Meanwhile, three firms joined the Am Law 200: Cole Scott & Kissane (163); Hanson Bridgett (192); and Pryor Cashman (178).

Additionally, twenty-five Am Law 200 firms based or founded in the Midwest increased their revenue on average by 8% last year. Seven of them posted double-digit gains, far exceeding the average 5% growth the Am Law 200 and the 6% growth Chicago-based firms saw in 2018. Those seven firms were Barnes & Thornburg, Polsinelli, Ice MillerPorter Wright, Robins Kaplan, Benesch, and Spencer Fane.

“Now, as this year’s Second Hundred stare down another major financial crisis, one that will likely be worse than the last, they can learn from the lessons of the past: focus on strong leadership; stay nimble; capitalize on their smaller size; stick with growth strategies; and diversify services when appropriate. Faced with a daunting future, it could mean the difference between success and failure,” (as quoted in The American Lawyer).

See more highlights from The Am Law 200 on The American Lawyer.

Contact Bill Sugarman for more information.

The American Lawyer released their 33rd annual Am Law 100 report, which includes data and rankings for the nation’s 100 highest grossing law firms. Overall, gross revenue grew by 5 percent in 2019, coming in at a record breaking $104 billion. Additionally, net income increased by 4 percent, profit per equity partner grew by 5 percent, and revenue per lawyer rose by 3 percent.

According to the report, forty-two firms posted gross revenue over $1 billion in 2019, four more law firms than in 2018. Additionally, eighty-six firms reported gains in revenue and increased profits per partner in 2019. The results revealed that Kansas-city based Polsinelli reported the greatest increase in average profit per equity partner, up 28.3% from 2018.

Like in 2018, the 10 highest-grossing firms ranked in roughly 26% of the revenue the Am Law 100 generated last year, the report revealed. The next 16 firms accounted for another quarter of the year’s revenue, meaning that half of the revenue generated by the Am Law 100 came from the top 26 law firms. In terms of parity, it was a step forward after the top 10 firms alone brought in 38% of the group’s total revenue just two years ago, (as quoted in The American Lawyer).

For the third straight year in a row, Kirkland & Ellis landed the No. 1 spot as the highest grossing law firm in 2019, with $4.154 billion in revenue, up 10.6% from 2018. Latham & Watkins remained in the No. 2 spot, rising 11.3% in total revenue to $3.767 billion. DLA Piper moved up one spot from last year coming in at No. 3 with $3.112 billion. Baker & McKenzie claimed the No. 4 spot, with $2.920 billion in revenue. Skadden Arps retained the No. 5 spot, down 1.5 percent to 2.632 billion in 2019.

See more highlights from The Am Law 100 on The American Lawyer.

Contact Bill Sugarman for more information.

The American Lawyer reports that more than 3,100 lateral partners moved between Am Law 200 firms in 2019, with corporate partners accounting for 25% of those moves, according to recent data released by ALM Intelligence. The total is 14.5% higher than last year’s lateral total of 2,754, largely as a result of an improved methodology used to collect this year’s data, which affects the year-over-year comparison. Over the past two decades, the number of lateral partner moves, tracked by The American Lawyer since 2000, has ranged from just above 2,000 to more than 3,000 a year, the article adds.

The article reported that at least 580 corporate partners joined the ranks of the Am Law 200, while 469 departed, which adds up to a net gain of 111 partners. Litigation partners accounted for another quarter of the past year’s laterals. Banking and Finance partners were the third-most-transient practice, comprising nearly 14% of all laterals. Interestingly enough, given the warnings of a recession, bankruptcy attorneys were the least transient, accounting for just a small fraction of the year’s lateral moves, at 2.4%, ALM Intelligence reports.

According to the report, Philadelphia-based Fox Rothschild saw the greatest percentage growth via lateral moves, as its partnership ranks grew by 60, or roughly 18%, on the back of 102 lateral hires, offsetting 42 departures. The firm has been growing steadily since it first cracked the Am Law 200 in 2015, the article notes. Additionally, the article noted that Winston & Strawn saw the greatest net defections among the Am Law 200, losing 52 partners and adding 17, for a net loss of 35, (as quoted in The American Lawyer).

Nearly three-quarters of Am Law 200 firms have had a lateral partner leave within the past five years due to an issue with personality or law firm culture, according to data released by ALM Intelligence. A lawyer’s business is easier fixed than their character, notes Polsinelli’s CEO Chase Simmons. And while there’s no one lateral partner who can affect a law firm’s revenue numbers on their own, a toxic partner could ruin a firm’s culture, he adds. “Culture is more permanent. Everything derives from the culture,” Simmons says. “If you mess with that, the dollars aren’t going to follow.”

“Law firms are constantly on the hunt for top talent, and they have recently began building programs focused on lateral integration. The reasons for doing so are interconnected. For one thing, firms use their programs as a selling point in their recruitment efforts. They also lead to better retention rates. Nearly every law firm The American Lawyer spoke with for this story touted a higher five-year retention rate than the 60% average that ALM Intellection reported last year among Am Law 200 firms,” (as quoted in The American Lawyer).

See highlights from the full article on The American Lawyer.

Contact Bill Sugarman for more information.

In a recent article, The American Lawyer takes a deep dive look at the strategies and practices of a small group of firms that have delivered year-over-year growth since the Great Recession. According to ALM Intelligence data, only 27 of the 100 firms on the Am Law rankings have had year-over-year growth in revenue since the 2009 fiscal year. To understand how a select group of firms turned the recession into an opportunity to thrive, not just survive, The American Lawyer spoke with a group of leaders who played a pivotal role in reimagining their firms’ trajectories.

So, what characteristics do these law firms have in common? Janet Stanton of law firm consultancy Adam Smith, Esq. elaborates on the subject, noting “They tend to operate in a more business-like way, which means a focus on profitability, intentional planning, strategic intake and succession planning for leadership roles and client management. From the 1980s to 2008, law land didn’t have to do any of these things, so these firms that are pulling away changed their strategy, notes Stanton. These firms have been able to get it right for nearly a decade, and each had to develop a unique strategy to make it happen,” (as quoted in The American Lawyer).

According to the article, the law firms that have delivered year-over-year growth since the 2009 fiscal year include: Akin Gump; Baker & Hostetler; Barnes & Thornburg; Cooley; Davis Polk; Duane Morris; Fox Rothschild; Fragomen; Gibson Dunn; Goodwin Procter; Holland & Knight; Jackson Lewis; King & Spalding; Kirkland & Ellis; Latham & Watkins; McGuireWoods; Milbank; Morgan Lewis; Ogletree Deakins; Paul Weiss; Perkins Coie; Polsinelli; Proskauer Rose; Ropes & Gray; Sheppard Mullin; Simpson Thacher; and Williams & Connolly.

See highlights from the full article on The American Lawyer.

Contact Bill Sugarman for more information.

Buoyed by a strong economy and expectations of continued growth in demand, the increasingly dynamic lateral market shows no signs of slowing in 2019, Law360 reports in a recent article. According to a report released by Citi Private Bank Law Firm Group and Hildebrandt Consulting, the lateral market had been the “primary driver of consolidation in the legal industry” in 2017 and 2018. During both of those years, the report found, lateral recruiting outpaced internal promotions, and that trend was unlikely to reverse in the near future.

In the article, Law360 reflects on the most effective hiring and integration strategies for attracting and retaining top talent at the fastest growing law firms in 2018. According to the article, law firm leaders at the most actively hiring firms identified a variety of strategies aimed at improving lateral hiring including seizing on opportunities from potentially flagging firms and building a competitive platform that integrates new talent and retains them for the long haul. Managing Partner of Akerman Scott Meyers weighs in on the success of the firm’s tactical lateral hiring strategies, which attributed to 47 lateral partners last year. According to Meyers, “None of this growth has been in the mold of, ‘If we build it, they will come,’ It’s been going to places where there is existing client demand, both in terms of geography as well as subject matter expertise,” (as quoted in Law360).

Another firm featured in Law360’s article was Kansas City-based Polsinelli, which also brought on 47 lateral partners in 2018. Polsinelli chairman and CEO Chase Simmons attributes its lateral growth to the firm’s 10-year focus on growing its bench in certain core practice areas, namely, real estate, financial services, mid-market corporate work, intellectual property and health care, as well as adjacent litigation and labor and employment matters. “We’re looking for people that fit culturally. If we see an opportunity that’s off-strategy, we’ll consider it,” notes Simmons. “We’re large enough as a firm that we can always be considering a few things that are maybe not right down the middle of what we’ve done in the past, but we know that that’s a different process,” (as quoted in Law360).

See highlights from the full article on Law360.

Contact Bill Sugarman for more information.

The American Lawyer released results from its annual Lateral Report, which tracked lateral movement strategies among the nation’s largest and most successful law firms. The report, conducted by ALM Intelligence, reported 2,895 lateral moves among Am Law 200 firms in 2017, decreasing 2.3% from 2016. According to the report, law firm leaders reported a variety of strategies aimed at improving lateral hiring such as geographic expansion, spending top dollar on superstar partners, hiring lateral groups, recruiting experts in other fields, and expanding lower cost-firms in larger markets.

Chicago-based Winston & Strawn hired the most lateral partners of any Am Law 200 firm, the report revealed. The firm brought on 73 partners, representing nearly 22 percent of its partner ranks. DLA Piper hired the second-most partners, 69—a mere 5.7 percent of its partnership. The next three firms to grow their partner ranks by more than 10 percent through lateral hiring included Cozen O’Connor, Fox Rothschild and Hogan Lovells opening new offices in Pittsburgh, Los Angeles and Seattle, respectively (as quoted in The American Lawyer).

Kansas City, Missouri-based Polsinelli is another firm to see recent growth in the lateral partner market. Much of the firm’s recent growth has been in Chicago, where it has grown from just six lawyers in 2006 to 99 as of last December. The firm has found success recruiting from some of the city’s legacy firms, many of which have pursued a more international, higher-profit model (as quoted in The American Lawyer).

See highlights from the full article on The American Lawyer.

Contact Bill Sugarman for more information.

The American Lawyer just released the results of the most recent Am Law 100, their annual financial report of the top 100 U.S. law firms.  Overall, the data revealed only slight increases for the firms overall, with the average profits per partner increasing 4 percent since 2014 and the total net income up by 3.3 percent.  Latham & Watkins claimed the number one slot for gross revenue for the second year in the row, with an impressive $2.65 billion over the last-place contender’s $332 million (Kramer Levin).  The ever-growing Polsinelli tied with Locke Lord for the biggest change in their Am Law 100 rankings, each increasing by twelve spots from the previous year.  And predictably, major big law firms Latham, Greenberg Traurig, Mayer Brown, and Reed Smith worked their attorneys to the bone to claim the most billable hours in 2015, with DLA Piper leading the pack at over 5.5 million hours–an astonishing 2 million-plus hours over the second-place Latham.

See more of the highlights from the 2016 Am Law 100 on The American Lawyer.

Contact Bill Sugarman for more information.

The “vast majority” of lawyers and staff from Houston-based IP boutique Novack Druce Connolly Bove & Quigg will be absorbed into the fast-growing Polsinelli, according to recent reports by The American Lawyer.

Polsinelli chairman and CEO Russell Welsh told The American Lawyer that acquisition by Polsinelli, which currently has just over 700 attorneys, will enhance their already “robust IP practice,” especially in the burgeoning area of post-grant patent reviews (as quoted in The American Lawyer).

Novak Druce, which had 140 attorneys in 2012, has been losing “a stream of partners to competitors,” The American Lawyer reports, including Drinker Biddle, Reed Smith, and Dykema Gossett.  This mirrors the ongoing trend for intellectual property boutiques in the recent years, many of which have been struggling and have since been absorbed into or have had partners taken by mid-sized, full-service firms like Polsinelli.

Ranked the fast-growing firm for the seventh year in the row, Polsinelli has experienced continued success in their expansion efforts, with revenue rising 11.4 percent in 2015 (The American Lawyer).  Their now-proven strategy is to concentrate growth in low overhead markets in order to compete for health care work and other “price-sensitive assignments.”  Todd Dickinson of Novack Druce’s executive committee agrees with their method, telling The American Lawyer that Polsinelli utilizes a “Midwest sensibility about rates that’s client friendly.”

Finding a foothold in the Chicago market isn’t as easy for the elite ‘big law’ firms as they might like to believe, reports Claire Bushey of Crain’s Chicago.

The article looks at three national firms that had big aspirations for growth upon their respective moves to Chicago: Paul Hastings, Ropes & Gray, and Morgan Lewis & Bockius.  New York-based Paul Hastings, for example, opened its Chicago doors in 2006, initially recruiting top partner talent and reporting goals of a 100+ lawyer office.  Ten years later, the office boasts of only 42 attorneys.  Former managing partner of the office, Rick Chesley, says that its the tough Chicago competition that forces firms to really consider their client base: “If you haven’t thought about who your clients are, who you’re going to compete with…you’re going to fail,” he said (as quoted in Crain’s).

Similarly, Boston-based Ropes & Gray opened eight years ago with predictions of a 100-lawyer headcount within two years.  The Chicago office has only 64 attorneys to date–a stark contrast to their London office, which went from 2 attorneys at their 2010 opening to 129 today.

Anthony Nasharr, Managing Partner of the Chicago office of Polsinelli, believes that firms looking to expand into Chicago need to be “chasing work characteristic to the city, like agribusiness or financial services” (as quoted in Crain’s).  Polsinelli, a firm headquartered in Kansas City, has proven that they have the right approach for Chicago growth, successfully growing their six-attorney starter office to almost 100 in just eight years.  Nasharr also notes that a new Chicago office requires strong support from their headquarters to help the office thrive–like supplying the funds to bring on quality lateral partners.  Much Shelist Managing Partner Mitchell Roth agrees that the need for good talent is critical to success in any major market, but argues that acquiring that talent can prove difficult: “To open a five-person office and expand to 100 in one or two years, when everyone’s trying to buy the exact same talent?  It’s next to impossible,” he says (as quoted in Crain’s).

Despite the difficulties, six out-of-town firms merged with Chicago firms last year–more than in any other city, Crain’s reports.  However, former Kirkland & Ellis partner Steven Harper warns the newcomers not to be fooled into thinking their high-profile reputations will be their be-all, end-all for attracting clients: “These firms believe that…clients will flock to the brand.  Well, maybe not.  Probably not,” he cautions (as quoted in Crain’s).