UIDE TO LEADING LAW FIRMS THE AM LAW 100/200 THE GLOBAL 100 THE A-LIST CORPORATEth SCORECARD AnniversaryUIDE 10 Edition th 10 ANNIVERSARY EDITION UIDE UIDE ZEUGHAUSER GROUP’S 2012 POCKET GUIDE TO THE AMERICAN LAWYER RANKINGS UIDE Zeughauser Group Dear Clients and Other Friends: The ZGuide to the 2012 Am Law 200 and 2011 Global 100 marks our tenth anniversary of publishing the ZGuide, which we are delighted to celebrate by providing you with a complimentary copy. At the time we published last year’s ZGuide, we noted that the legal industry was rebounding nicely from the softening in the economy that began in the second half of 2007 and continued through 2009. But for most firms, 2011 did not fulfill the promise of robust growth akin to that of the golden era that preceded the downturn. Relatively flat demand and the ever-growing chasm separating the most successful firms from the rest of the pack created unprecedented challenges, not only to lead and manage better, but also to do so prudently. Midway through 2012, caution has become the byword of the year, underscored by the collapse of the iconic Dewey & LeBoeuf law firm, which followed on the heels of Howrey, Thelen, Heller, and Brobeck over a few short years, each a wake-up call for change. Looking ahead to 2013, we believe that market leadership will become a still stronger imperative not just for success, but for sustainability. Relentless focus on being at the top is the only prescription for survival in what has become a crucible of change for the legal industry. As we noted last year, the ability to surpass the expectations of evermore sophisticated clients and successfully confront the • ZGuide • unyielding pressure to maintain high levels of profitability will separate the winners from the losers. Table of Contents Despite unprecedented challenges, we remain optimistic about the future for strong law firms, and flattered by those firms that have chosen us to counsel them in seizing opportunities to lead. And, as we have for each of the past ten years, we want to take this opportunity to thank our clients and the more than fifty Am Law 200 firms that participate in our Chair, CMO, and COO Roundtables for Methodology their interest in our work. We look forward to working The Am Law 200, A-List ..................................2 with them and with new clients to anticipate, identify, and The Am Law 200 capture near- and long-term opportunities. Ranked by Profits Per Equity Partner ....................4 Sincerely, The Am Law 200 Ranked by Value Per Lawyer ..........................24 Methodology Ron Beard Mozhgan Mizban The Global 100 ..........................................34 The Global 100 Norm Rubenstein Jack Walker Ranked by Profits Per Equity Partner ...................36 Methodology Mary K Young Peter Zeughauser The Corporate Scorecard ..............................46 The Corporate Scorecard Mergers and Acquisitions ..............................48 Kent Zimmermann Lonnie Zwerin Private Equity ...........................................49 IPOs ......................................................50 Equities by U.S. Corporations .........................51 Investment-Grade Debt ................................52 High-Yield Debt .........................................52 Asset-Backed Securities ................................53 Mortgage-Backed Securities ...........................54 Municipal Bonds ........................................54 Project Finance ..........................................55 REIT Equities ............................................56 REIT Debt ................................................56 Bankruptcies ............................................57 Emergences .............................................58 Law Firm Index .............................................60 © ALM Media Properties, LLC and Zeughauser Group, LLC Chart information reprinted with permission from the April, May, June, July 2012 and October 2011 issues of The American Lawyer (The Am Law 100, The Am Law 200, Corporate Scorecard, The A-List, and The Global 100). © 2011 and 2012 ALM Media Properties, LLC • ZGuide • ZGuide • 1 The Am Law 200 • Revenue Per Lawyer (RPL) is calculated by dividing gross revenue by the number of lawyers. • Profits Per Equity Partner (PPEP) is calculated by dividing net operating income by the number of equity partners. • Compensation Average—All Partners is the net oper- Methodology ating income plus compensation to nonequity partners, divided by the number of equity and nonequity partners. • Value Per Lawyer (VPL) is calculated by dividing the Compensation Average—All Partners by the total number of lawyers. That figure is then divided into $10 million to deter- mine how many lawyers it takes to generate that amount. The Am Law 200 is reported by staff members at ALM Media’s publications throughout the United Location of Firms States, including The American Lawyer, The Some firms are identified as “international” or “national,” rather Connecticut Law Tribune, Daily Business Review than identifying them by city, according to the percentage (Miami), Fulton County Daily Report (Atlanta), The of the firm’s attorneys in various regions of the country and Legal Intelligencer (Philadelphia), The National Law the percentage that work outside the United States. Those Journal/Legal Times, The New Jersey Law Journal, breakouts are obtained from the most recent National Law New York Law Journal, The Recorder (San Francisco), Journal NLJ 250 survey.1 If 40 percent or more of the firm’s and Texas Lawyer. lawyers were located outside the U.S., the firm is identified as “international.” If no more than 45 percent of the firm’s Most law firms provide their financials voluntarily for attorneys were located in any one region of the country, the this report, but all data, whether it comes officially firm is identified as “national.” The American Lawyer designates from the firm or not, is investigated by reporters. some firms as “Vereins,” which differ structurally from other Am Law 200 firms, especially in regard to profit sharing. Definitions Gross revenue is fee income from legal work only. It does The A-List not include disbursements or income from nonlegal ancillary The A-List, comprised of just 20 firms, is determined by rankings businesses. In all cases, the revenue and profit figures listed are in four surveys—The American Lawyer’s Revenue Per Lawyer for the firm’s most recently completed fiscal year. Most Am Law (from The Am Law 200); Pro Bono; and Midlevel Associate firms are on a calendar fiscal year. Net is compensation paid to Survey rankings; and The Minority Law Journal’s Diversity equity partners. Scorecard rankings. Rankings in each survey are converted into points, using an inversion calculation where a firm ranked Equity partners are those who receive no more than half their Number One receives 200 points, and a firm ranked Number compensation on a fixed-income basis. Nonequity partners 200 receives just one point. To determine each firm’s score, are those who receive more than half their compensation on points are doubled for both Revenue Per Lawyer and Pro a fixed basis. Lawyer numbers are full-time-equivalent figures Bono rankings and then added to the scores for the Midlevel for the 2011 calendar year taken from The National Law Journal ’s Associate Survey and Diversity Scorecard rankings. most recent NLJ 250 survey.1 Additional information about the A-List is available on Calculations americanlawyer.com and in the July 2012 issue of The • Gross Revenue is rounded to the nearest $500,000. American Lawyer. u • Profits Per Equity Partner, Revenue Per Lawyer,and Average Compensation—All Partners are rounded to the 1 In April of 2012, The National Law Journal published the first expanded ranking of law firms based on the nearest $5,000. number of lawyers, The NLJ 350. 2 • ZGuide ZGuide • 3 The Am Law 200 The Largest Firms in the U.S., Ranked By Profits Per Equity Partner Firms noted with a star (I) are on The American Lawyer’s “A-List.” (See the methodology on pages 2 and 3.) Firms ranked 101-200 in The Am Law 200 are in bold. Compensation Firm Profits Per Revenue Per Average, Lawyers, Partners, Location PPEP Rank 2012 PPEP Rank 2011 Equity Partner Gross Revenue Am Law 200 Rank Lawyer RPL Rank All Partners Wachtell, Lipton, Rosen & Katz 1 1 $4,460,000 $552,000,000 56 $2,255,000 1 $4,460,000 245 Lawyers, 78 Equity Partners, 0 Nonequity Partners, New York Quinn Emanuel Urquhart & Sullivan 2 2 $4,160,000 $723,500,000 36 $1,120,000 14 $3,420,000 647 Lawyers, 111 Equity Partners, 35 Nonequity Partners, Los Angeles Sullivan & Cromwell 3 3 $3,220,000 $1,113,000,000 16 $1,455,000 2 $3,220,000 764 Lawyers, 171 Equity Partners, 0 Nonequity Partners, New York Cahill Gordon & Reindel 4 4 $3,210,000 $326,000,000 86 $1,165,000 12 $2,950,000 280 Lawyers, 58 Equity Partners, 8 Nonequity Partners, New York Cravath, Swaine & Moore 5 5 $3,100,000 $568,000,000 51 $1,195,000 8 $3,100,000 476 Lawyers, 80 Equity Partners, 0 Nonequity Partners, New York Paul, Weiss, Rifkind, Wharton & Garrison I 6 7 $3,095,000 $780,000,000 30 $1,060,000 20 $3,095,000 737 Lawyers, 126 Equity Partners, 0 Nonequity Partners, New York Kirkland & Ellis 7 6 $3,050,000 $1,750,000,000 5 $1,215,000 5 $1,650,000 1,442 Lawyers, 305 Equity Partners, 359 Nonequity Partners, National Irell & Manella 8 8 $2,875,000 $244,000,000 121 $1,425,000 3 $2,875,000 171 Lawyers, 53 Equity Partners, 0 Nonequity Partners, Los Angeles Cleary Gottlieb Steen & Hamilton 9 10 $2,695,000 $1,125,000,000