The stratification apparent in prior years continues with firms in the top half of the 100 are growing faster than those in the bottom half.
Roy Strom (right) gets tantalizingly close to the major PPP driver in his story The Big Picture “Revenue grew at its fastest rate since the big dipper, up 5.5 percent to a record $91.4 billion. Net income—the pool of money firms pay out to their ever-shrinking equity partnership—did even better than the top line, increasing 6.1 percent” (emphasis added).Gina Passarella, Editor-in-Chief of American Lawyer, comments “The drumbeat was steady. The observers, myself included, were relentless. External pressures on law firm business models were mounting and firms 
had to act fast. They just weren’t doing enough to meet new market realities—or, for some, to survive. Maybe they listened. Maybe they had enough of the talk. But something happened in 2017, particularly in the second half of the year, that spurred law firms to post their best gains in about a decade. Perhaps a proverbial middle finger to the critics? Perhaps the critics were dead wrong? Perhaps the industry is turning a corner that no one saw coming? Or perhaps our definitions of success have shifted in a decade?“
had to act fast. They just weren’t doing enough to meet new market realities—or, for some, to survive. Maybe they listened. Maybe they had enough of the talk. But something happened in 2017, particularly in the second half of the year, that spurred law firms to post their best gains in about a decade. Perhaps a proverbial middle finger to the critics? Perhaps the critics were dead wrong? Perhaps the industry is turning a corner that no one saw coming? Or perhaps our definitions of success have shifted in a decade?“I think it’s too early to tell Gina. Two points and incomplete data don’t prove a point.
And there are other factors that the Am Law tables don’t report. Most importantly is the number of equity points on issue in a firm (the basis on which PPP is calculated) and in which direction equity on issue is moving–the point made above by Roy Strom.
Most, admittedly not all, firms I know are systematically de-equitizing and relentlessly cost-cutting. And this is what’s keeping PPP high.
Logically, neither route is indefinitely sustainable. That’s where remaking their business models comes in. De-equitization is the elephant in the room in BigLaw’s profit distribution. It’s a tactical fix to a structural problem.
Alex Hamilton 
Andrew Perlman 
Anna Hinder 
Aric Press 
Barry Wilkinson 
Ben Farrow 
Brian W Tang 
Brian Inkster 
Catherine J. Moynihan 
Colin S. Levy 
D. Casey Flaherty 
David Goener 
David Perla 
Ed Reeser 
Eric Fiszelson 
Eva Bruch 
Dr Floortje Blindenbach-Driessen 
George Beaton 
Hans Schuurman 
Heather Suttie 
Jacquie Champagne 
Jae Um 
Jason Moyse 
Jeff Carr 
Joel Barolsky 
John Chisholm 
John Grimley 
Jordan Furlong 
Joshua Kubicki 
Katherine Thomas 
Kenneth A. Grady 
Mark Cohen 
Mark Rigotii 
Matthew Burgess 
Michael Mills 
Michael Milnes 
Michelle Mahoney 
Mike O’Horo 
Mitch Kowalski 
Nick Jarrett-Kerr 
Noah Waisberg 
Pam Woldow 
Patrick McKenna 
Patrick Lamb 
Paul Hugh-Jones 
Peter Campbell 
Peter George 
Priscilla Totten 
Ralph Baxter 
Richard Burcher 
Richard Moorhead 
Richard Tromans 
Ron Friedmann 
Scott Colvin 
Dr Silvia Hodges Silverstein 
Stephen J. Poor 
Stephen Mayson 
Steven Walker 
Timothy B. Corcoran 
Tony Griffiths 
Warren Kalinko 
Warren Riddell
Thanks for your astute and sensible point of view, George. I concur. I also believe the AmLaw 100 financial results to be one of the most detrimental marketing tools a firm could use to heighten profile. That’s because the only thing it instills is that greed wins. Profit per partner (PPP) has nothing to do with firm profitability, and even less to do with skillful efficiency and sterling service to clients. As for de-equitizing, like you, many firms I know are removing equity partners with swiftness and stealth. While partners left standing get bigger pieces of equity pie, de-equitizing erodes trust especially from those aspiring to make their career inside a firm as well as skittish clients who aren’t sure if their lawyer’s head might be next on the chopping block and so spread work around to various firms in order to hedge their bets. The traditional law firm structure will, hopefully sooner rather than later, be replaced by structures more common and time-proven in other forms of business. Law firms that restructure now will be high and dry while those who don’t will be like swimmers when the tide goes out fast: We’ll know who wasn’t wearing a bathing… Read more »