UIDE TO LEADING LAW FIRMS THE AM LAW 100/200 THE GLOBAL 100 THE A-LIST THE CORPORATEUIDE SCORECARD UIDE UIDE ZEUGHAUSER GROUP’S 2015 POCKET GUIDE TO THE AMERICAN LAWYER RANKINGS UIDE Dear Clients and Other Friends: We are delighted to present you with The ZGuide to the 2015 Am Law 200 and 2014 Global 100. These lists may be described more accurately as “back to the future” than as the “new normal.” Close to 10% of the Am Law 200 comprise an elite group of firms with a significant presence in New York City, nearly all of them predominantly corporate. The next 25% or so are highly successful full-service corporate firms anxious about sustaining and enhancing their ability to compete for top clients, work, and talent. The balance are harder to pigeonhole into one category or another. One could have said the same things about the same lists a quarter-century ago. Perhaps this is unsurprising; the 2015 Am Law 200 lists reflect the return to a healthy U.S economy dominated by healthy large-cap companies and financial institutions. Digging under the numbers, though, little remains the same. Now the top 200 nearly always compete for work on every matter, and costs and fee arrangements are nearly always material drivers of client hiring decisions. Client work commonly spans the globe. What was once a seller’s market for first-year associates has been disrupted and, according to some pundits, is • ZGuide • evaporating. Summer associate programs, once a series More change lies ahead for Big Law. According to of indulgent recruiting events designed to produce high McKinsey, there are 8,000 large companies in the world yields, are now real work-a-thons, shrinking in size and, today (companies with over $1 billion in revenue). in some instances, disappearing. An army of contract Over the next ten years, as the rebalancing of the global lawyers, augmented with LPOs and e-discovery economy and its shift to Asia comes to fruition, 7,000 companies, has replaced brigades of young associates. new large companies will be added to the mix. Just Fourteen- and fifteen-year tracks to full equity shy of 5,000 of them will be in emerging economies; partnership abound. The gap between high-earning and almost 3,000 of those will be in China alone. Twenty low-earning partners in any given firm is likely double percent of the Fortune 500 will be in China. Disneyland or more what it was a quarter-century ago. The legal will open in Shanghai next year. Three hundred and industry has been restructured, and it isn’t over yet. thirty million people will live within a three- hour Perhaps the most stunning event of 2014 was drive of the new amusement park. Metaphorically, Dacheng Denton’s formation of a 6,000-lawyer China will be Big Law’s new Disneyland. firm that has proclaimed a growth strategy, which, History often predicts the future. In each year’s if achieved, will make it 10,000 lawyers in short ZGuide, we espouse our belief that market leadership order. Suddenly, much of the Am Law 200 seem like will become a still stronger imperative not just for Small Law, not Big Law. The next-largest firms in success, but for sustainability, and that relentless an industry that has been consolidating slowly for focus on being at the top will be the only solve for nearly three decades seem to have acquired a sense surviving the legal industry’s crucible of change. of urgency to get much bigger much more quickly. We also reiterate the imperative of surpassing the Size (relative to market) has emerged alongside expectations of increasingly sophisticated clients and profitability as a major driver of success, particularly maintaining high levels of profitability. We underscore for the “nifty fifty” occupying the second tier. those imperatives again here. For firms that achieve Stirring the pot, The American Lawyer and Citibank, market leadership, the opportunities remain boundless. the granddaddies of law firm rankings and peer group In 2015 we are evermore grateful to our clients, studies, have redefined financial success. The former the many Am Law 200 and Global 100 firms has introduced profits per lawyer as a new metric, that participate in our Chair, COO, and CMO and the latter now is underscoring contribution per Roundtables, and our many other friends in the lawyer as a key metric. The upshot is that after two industry for your interest in and enduring support decades of the industry simultaneously attacking of our work. We also want to express our gratitude and embracing profits per equity partner as a key for your extraordinary contributions of time and metric of success, the deck has been shuffled. The new money to pro bono representations and to your metrics have created a new set of winners and losers. communities across the globe. You inspire us. We • ZGuide • • ZGuide • join all of you in your belief that these contributions are essential underpinnings of your success and the success of the legal system we cherish. Table of Contents We look forward to working with you in choosing, achieving, and sustaining market leadership! Sincerely, Ron Beard R. Bruce McLean Methodology The Am Law 200, The A-List ............................ 2 Norm Rubenstein Jack Walker The Am Law 200 Ranked by Profits Per Equity Partner ...................4 The Am Law 200 Mary K Young Peter Zeughauser Ranked by Value Per Lawyer ......................... 24 Methodology Kent Zimmermann Lonnie Zwerin The Global 100 ......................................... 34 The Global 100 © ALM Media Properties, LLC and Zeughauser Group, LLC Ranked by Profits Per Equity Partner................. 36 Chart information reprinted with permission from the April, May, June, August 2015 and October 2014 issues of The American Lawyer (The Am Law 100, The Am Law 200, The Corporate Scorecard, The A-List, and The Global 100). Methodology © 2014 and 2015 ALM Media Properties, LLC The Corporate Scorecard ............................. 46 The Corporate Scorecard Mergers and Acquisitions .............................48 Buyouts .................................................. 49 U.S. IPOs ................................................. 50 Equities by U.S. Corporations .........................50 Investment-Grade Debt ................................51 High-Yield Debt .........................................52 Project Finance ..........................................53 Law Firm Index .............................................54 • ZGuide • ZGuide • 1 The Am Law 200 • Profits Per Equity Partner (PPEP) is calculated by dividing net operating income by the number of equity partners. Methodology • Revenue Per Lawyer (RPL) is calculated by dividing gross revenue by the number of lawyers. • Compensation Average, All Partners, is the net operating income plus fixed-income compensation to nonequity part- ners divided by the number of equity and nonequity partners. • Value Per Lawyer (VPL) is calculated by dividing the net The Am Law 200 is reported by ALM Media‘s operating income plus fixed-income compensation to non- publications throughout the United States, including equity partners by the total number of lawyers. That num- The American Lawyer, The Connecticut Law Tribune, ber is then divided into $10 million to determine how many Daily Business Review (Miami), Daily Report lawyers it takes to generate that amount. (Atlanta), The Legal Intelligencer (Philadelphia), The National Law Journal/Legal Times, The New Jersey Location of Firms Law Journal, The Recorder (San Francisco), and Some firms are identified as “international” or “national,” Texas Lawyer. rather than identifying them by city, according to the percentage of the firm‘s attorneys in various regions of the Most law firms provide their financials voluntarily for country and the percentage who work outside the United this report, but all data, whether it comes officially States. Those breakouts are obtained from the most recent from the firm or not, is investigated by reporters. National Law Journal NLJ 350 survey. If 40 percent or more of the firm‘s lawyers were located outside the U.S., the firm is Definitions identified as “international.” If no more than 45 percent of the Gross revenue is fee income from legal work only. It does not firm‘s attorneys were located in any one region of the country, include disbursements or income from nonlegal ancillary the firm is identified as “national.” businesses. Net is compensation paid to equity partners. Vereins are broken out separately because their organizational Equity partners are those who receive no more than half their structure, particularly regarding profit sharing, differs compensation on a fixed-income basis. Nonequity partners significantly from that of traditionally structured Am Law firms. are those who receive more than half their compensation on a fixed-income basis. Retired partners and of counsel are not The A-List counted as partners. The A-List, comprised of just 20 firms, is determined by rankings in four surveys — The American Lawyer‘s Revenue Per Lawyer Lawyer numbers are full-time-equivalent figures for the 2014 (from the Am Law 200), Pro Bono, and Midlevel Associate calendar year taken from The National Law Journal ’s most Surveys, and The Minority Law Journal ‘s Diversity Scorecard. recent NLJ 350 survey. Temp and contract attorneys are not To determine each firm‘s score, points are doubled for both included. Revenue Per Lawyer and Pro Bono rankings and then added to the scores for the Midlevel Associate Survey and Diversity Calculations Scorecard rankings. • Gross Revenue is rounded to the nearest $500,000. • Profits Per Equity Partner, Revenue Per Lawyer, and Additional information about the A-List is available on Compensation Average, All Partners are rounded to the americanlawyer.com and in the August 2015 issue of The nearest $5,000. American Lawyer. u 2 • ZGuide ZGuide • 3 The Am Law 200 The Largest Firms in the U.S., Ranked By Profits Per Equity Partner Names of firms ranked 101 to 200 on The Am Law 200 are in bold.