The American Lawyer Reports Average Partner Profits at Nation's Largest Law Firms Top $1 Million for First Time

Business Wire, May 1, 2006

NEW YORK -- The American Lawyer(R) magazine reported today that average profits per partner at the Am Law 100(R), the nation's 100 largest law firms, topped $1 million dollars for the first time last year, while ten firms on the list--nine of which are based in New York-- recorded profits per partner of $2 million or more. Gross revenues for the combined list increased by more than 10% last year to almost $51 billion, with a record seven law firms generating more than one billion dollars in gross revenues. The 2006 Am Law 100 rankings, based on FY 2005 financial performance data, are featured in the May issue of the magazine, available beginning today. Selected Am Law 100 survey results are also available on the Web at www.americanlawyer.com and www.law.com.

Among the other highlights of this year's survey:

--Two new firms joined the billion-dollar club--Weil, Gotshal & Manges and White & Case. For the first time, Latham & Watkins has surpassed Baker & McKenzie for the number two spot behind Skadden Arps, which posted $1.6 billion in gross revenues, to top this year's list.

--Wachtell, the smallest Am Law 100 firm by headcount, once again leads the list in profits per partner and average partner compensation ($3.8 million); revenue per lawyer ($2.4 million); and value per lawyer ($1.6 million).

--Head count growth in the Am Law 100 has slowed considerably in the last few years, up less than 2 percent in 2004 and less than 3 percent last year. Firms that expanded head count significantly struggled to translate size into revenue.

--Slow head count growth has contributed to solid increases in revenue per lawyer in the last three years and 22 Am Law 100 firms posted double-digit increases in revenue per lawyer last year. But, over the long term, revenue per lawyer expansion is not keeping pace with head count increases.

--The fastest-growing sector in the Am Law 100 was nonequity partners, which has jumped by almost 88 percent since 2000. If that pace continues, the number of nonequity partners in the Am Law 100 will equal the number of equity partners by the year 2013.

"Firms have continued to improve profitability by cutting costs, boosting efficiency, and making equity partnership more exclusive, but revenue per lawyer (RPL) remains the key barometer of The Am Law 100's overall health," said Aric Press, editor in chief of The American Lawyer. "RPL reflects what clients are willing to pay and therefore where a firm stands in the market. The race now is to capture the work that clients value the most. Many are competing, not all will win."

The American Lawyer's Am Law 100 has been recognized as the definitive public ranking of annual financial performance for the nation's largest law firms since its introduction in 1987. Am Law 100/200 metrics are primary benchmarks for law firms seeking to assess their competitive position in the marketplace.

This June, The American Lawyer will publish its rankings of the second hundred largest firms. Am Law 100 spreadsheet data is available for online purchase through the ALM Research Store at www.almresearchonline.com. To subscribe or request back copies of The American Lawyer, including copies of the Am Law 100 issue, please call (800) 755-2773 or (212) 545-5990 outside the U.S. An electronic edition of the magazine can also be purchased online at www.qmags.com/amlaw. The American Lawyer magazine is published monthly by ALM.

Headquartered in New York City, ALM is a leading integrated media company, focused on the legal and business communities. ALM currently owns and publishes 39 national and regional magazines and newspapers, including The American Lawyer, Corporate Counsel(R), The National Law Journal(R) and Real Estate Forum(R). ALM's Law.com(R) is the Web's leading legal news and information network, while ALM's GlobeSt.com(R) is the Web's leading information source for commercial real estate professionals. Other ALM businesses include book and newsletter publishing, court verdict and settlement reporting, production of professional trade shows, conferences and educational seminars, market research and content distribution. ALM was formed by U.S. Equity Partners, L.P., a private equity fund sponsored by Wasserstein & Co., LP. More information on ALM's businesses and services is available on the Web at www.alm.com.