The past several years have been a roller coaster ride for Biglaw. First came the ups and many, many downs of COVID in 2020, followed by 2021’s “post”-COVID land of riches, including raises for associates coupled with a booming lateral market. Then came 2022, a time when law firms were coming off the highs of the year that was and realizing that what goes up — in this case, their revenue — was likely going to come down thanks to geopolitical turmoil, inflation, a possible recession, and ever-rising interest rates.
Today, the American Lawyer released its Am Law 100 law firm rankings — a closely watched list of the elite, prestigious, and highly influential law firms that represent the very best of what the legal profession has to offer. The highlights from the report reveal a mixed bag for the top Biglaw firms in the nation, with more than half of them seeing revenue percentage declines (59 firms in all). Compare this to 2021, when every single firm on the Am Law 100 had an increase in gross revenue over 2020.
While some firms came out on top, others were merely surviving. How did the Am Law 100 stack up?
Here’s an overview of how Biglaw’s best performed in 2022:
- Gross revenue: $131 billion, up by 2.7%
- Average revenue per lawyer: $1.15 million, down by 1.9%
- Average profits per equity partner: $2.56 million, down by 3.7%
How did we get here? Blame deal work, or the lack thereof. From Am Law:
“Transactional practices softened for many firms,” longtime legal consultant at Zeughauser Group, Kent Zimmermann, says. “As early as the spring of 2022, and for other firms later in the year. Firms where their practice mix is heavily weighted towards transactional sales, those slowed down the most, with some excellent firms that missed their budget last year for the first time in years.”
The slowdown in deal work from 2021 was expected, and in some cases welcome, after a banner but exhausting year.
In order to handle that work, many firms brought on more talent (hence the increased headcount in a down revenue year for most firms) in 2021 and are still on the hook for compensating those additional bodies.
And when the work dried up, the firms felt it in their profitability numbers.
Now, the moment you’ve been waiting for: the top 10 firms in the gross revenue rankings, and the top five firms for the RPL and PPP rankings.
Gross Revenue
The top 10 firms by gross revenue appear below, with Kirkland remaining the kind of cash in the top spot for the sixth year in a row. The full Am Law 100 gross revenue chart can be found here.
- Kirkland: $6.514B (no change)
- Latham: $5.321B (no change)
- DLA Piper: $3.685B (no change)
- Baker McKenzie: $3.300B (no change)
- Skadden: $3.020B (no change)
- Sidley: $3.922B (+1)
- White & Case: $2.282B (-1)
- Morgan Lewis: $2.745B (+2)
- Gibson Dunn: $2.736B (+2)
- Ropes & Gray: $2.718B (+2)
Revenue Per Lawyer
As for RPL, which provides a relatively accurate picture of a firm’s overall financial well-being, we’ve got five big name players strutting their stuff. As noted by Am Law, RPL “took a tumble” in 2022. The full Am Law 100 revenue per lawyer chart can be found here.
- Wachtell: $3.54M
- Sullivan & Cromwell: $2.14M
- Cravath: $1.96M
- Kirkland: $1.90M
- Paul Weiss: $1.88M
Profits Per Partner
This is where all of the magic happens. We can see that Kirkland finally knocked Wachtell out of the top spot on this list. The full Am Law 100 profits per partner chart can be found here.
- Kirkland: $7.51M
- Wachtell: $7.29M
- Sullivan & Cromwell: $5.98M
- Paul Weiss: $5.72M
- Davis Polk: $5.55M
We will undoubtedly have even more to say as we dig into these numbers. But what’s clear is Biglaw had a a difficult year, and 2023 is looking rough as well. Best of luck to those who are able to stick it out.
A Step Back, But Still Ahead? An Analysis of The 2023 Am Law 100 [American Lawyer]
The 2023 Am Law 100: Ranked by Gross Revenue [American Lawyer]
The 2023 Am Law 100: Ranked by Revenue Per Lawyer [American Lawyer]
The 2023 Am Law 100: Ranked by Profits Per Equity Partner [American Lawyer]
Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.
