Has the Economic Recovery Bypassed Midsize Law Firms?

Headnote

Increasing Margins

Take a look at data in the new AmLaw 100 financial survey from The American Lawyer magazine and it seems that large law firms have regained their economic footing. Indeed, the downturn that threatened partner profits and sent firms into "defensive mode," seems no longer to be an issue, according to the latest AmLaw 100 findings.

"Partnership isn't what it used to be. It's better. Much, much better," The American Lawyer notes, adding that "the median profits-per-partner figure at America's 100 top-grossing law firms in 2003 was $792,500, up almost 9.3% from 2002. The average was even more astonishing: $930,700, up about 10%. Ten years ago, million-dollar partner pay days were limited to two or three firms. No more. Thirty-two of the firms on this year's chart enjoyed average profits per partner of $1 million or more, and they aren't just the usual New York and Los Angeles suspects."

Great news for owners of large firms, but PR wondered whether the business upswing had a similar effect on midsize firms. Data from The AmLaw 200-the magazine's annual ranking of smaller firms in major markets-show that 2003 was a banner year as well for owners with firms like New York City's Kasowitz Benson Torres & Friedman. According to the AmLaw 200 survey, although Kasowitz has only about 100 lawyers, perpartner profits came in at $2.9 million last year. Interestingly, "six other members of the second Hundred recorded profits per partner greater than $1 million in 2003 and four other firms had profits per partner between $900,000 and $1 million," the AmLaw report explains.

Nevertheless, the surveyors note certain particulars: This year's top-ranking...