Corporate America: Got Am Law 100 Envy?
In this post, What's So Bad About Being in the Am Law 100, Bruce MacEwen takes issue with a recent American Lawyer article that focused only on the grim side of being a top Am Law firm. From the article:
"The historical data suggests that The Am Law 100, as a universe, is growing too fast in size to sustain its own long-term revenue expansion. All those additional lawyers are a drag on the growth of revenue per lawyer." [...]Average billable hour statistics provide convincing evidence that last year The Am Law 100 had too many lawyers. Even at the 30 most profitable firms included in Citigroup's 2005 survey, partners and associates averaged only 1,850 billable hours."
MacEwen suggests that one of the flawed assumptions in the Am Law piece is that it takes a short-term historical look. MacEwen posits that a short-term view does not work particularly well in the legal profession, which is characterized by periods of frantic hiring, followed by frenzied downsizing. Instead, a long-term view that evens out the hills and valleys makes more sense.
Thus, MacEwen examines the Am Law 100 firms' growth over a 10-year period. Crunching those numbers, MacEwen found that firms have experienced an absolute growth rate in revenue of 215 percent over ten years, or 146.5 percent when adjusted for inflation. MacEwen bets that "a healthy cross-section of executives across corporate America would look on these figures green with envy." I agree.
Posted by Carolyn Elefant on May 18, 2006 at 03:51 PM | Permalink
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