July 10, 2007

LEGALRITAVILLE POTPOURRI

I25I40 I65 Due to The American Lawyer’s methodology of ranking the U.S. law firms by gross revenues, LawBall’s meandering journey through Legalritaville became even more so as 2 of the divisions (as shown on the U.S. Census Bureau map)  - the Mountain and the East South Central – contained just 2 AmLaw 200 firms each.  For convenience sake – my writing and your reading obviously more than travel on the U.S. Interstates – I decided to tour both divisions together.  In this segment of the tour, the “South rose again,” as Birmingham-based Bradley Arant Rose & White ranked 1st when looking at both the key LawBall metric categories and all LawBall metric categories.

The 2 divisions include the 8 Mountain division states of Arizona, Colorado, Idaho, New Mexico, Montana, Utah, Nevada, and Wyoming and the 4 East South Central division states of Alabama, Kentucky, Mississippi, and Tennessee.  The 2 divisions include only 4 firms from the 2007 AmLaw 200 (2006 operating information) – 1 each based in Birmingham, Phoenix, Denver, and Memphis.

The AmLaw 200 firms in the Mountain and the East South Central divisions’ 12 states are:

  • Alabama (1):  Bradley Arant Rose & White.
  • Arizona (1):  Snell & Wilmer.
  • Colorado (1):  Holland & Hart.
  • Tennessee (1):  Baker, Donelson, Bearman, Caldwell & Berkowitz.

Once again, I’ve put my observations before the analytic tables and have placed the tables at the end of this posting.  The tables include one that contains the 2006 financial operating performance metrics for each of the firms in the Mountain and East South Central divisions and a second that shows the firms’ relative ranking (1 – 4) within each performance metric.  By clicking on the tables you can open a larger version.  I’ve also attached the tables as a *.pdf document in the right-hand margin under the category “Posting Attachments” as “Legal Industry Mountain East South Central Divisions Metrics 2006.”

Several observations:

  • When compared to the aggregate performance of the AmLaw 200, the aggregate relative financial operating performance of the 2 divisions did not exceed that of the aggregate AmLaw 200 in any single key metric category.
    • Both Bradley Arant Rose & White (53.48%) and Holland & Hart (42.91%), though, achieved margins that exceeded the aggregate AmLaw 200’s margin of 37.65%.
    • No firm in the division exceeded either the aggregate AmLaw 200’s asset turnover (revenue per lawyer) of $720,808 or the aggregate AmLaw 200’s return on equity (ROE or profit per partner) of $1,012,375.
    • Only Bradley Arant ($284,722) achieved a return on assets (ROA or profit per lawyer) that exceeded the $271,403 ROA achieved by the aggregate AmLaw 200.
    • Only Snell & Wilmer (5.7917) exceeded the 3.7302 financial leverage achieved by the aggregate AmLaw 200.
  • When summing up the Mountain and East South Central divisions’ firm rankings in each of the key metric categories, Birmingham’s Bradley Arant finished 1st with 9 points, ahead of 2nd ranked Snell & Wilmer (12 points) of Phoenix by 3 points.  Bradley Arant garnered 1st place rankings in asset turnover (“offense”), margin (“defense”), and ROA; a 4th place ranking in leverage (“special teams”); and a 2nd place ranking in ROE.  Snell & Wilmer scored a 4th place ranking in margin; a 2nd place ranking in asset turnover, which resulted in a 4th place ranking in ROA; a 1st in leverage; and, a 1st in ROE.  As was the case in the West North Central division, Bradley Arant’s offensive (asset turnover) and defensive (margin) performances led to a large enough advantage in ROA performance (remember, ROA = asset turnover x margin) that the aggregate 7-point ratings advantage in those 3 key metric categories was too much for Snell & Wilmer’s 3-point leverage (special teams) and 1-point ROE ratings advantages to overcome.  Holland & Hart finished with 14 points, and Baker, Donelson, Bearman, Caldwell & Berkowitz finished with 15 points.  (Those totals are not included in the tables for space reasons but are included for all of the firms in the *.pdf attachment).
  • When summing up the firms’ rankings in all of the metric categories, Bradley Arant again finished 1st (16 points).  Holland & Hart and Snell & Wilmer exchanged places, as Holland & Hart finished 2nd with 20 points and Snell & Wilmer finished 3rd with 21 points.  Baker, Donelson again finished 4th with 23 points.

Trophy_with_blue_ribbon The *.pdf attachment also has easy to view individual tables that reflect the firms’ individual rankings in margin, asset turnover, ROA, financial leverage, and ROE versus the consolidated Mountain and East South Central divisions in the aggregate and the AmLaw 200 in the aggregate.

Today’s posting is the last one for about a week, as I take some time off to attend a friend’s wedding and to enjoy some of Florida’s glorious beaches.   When I return, the Legalritaville tour will pick up with the Middle Atlantic division – the final division - that includes the states of New Jersey, New York, and Pennsylvania.  Then, instead of a movie that shows the tour’s highlights after its last stop in the Middle Atlantic, the highlights will be captured instead in a subsequent posting that includes a 2006 Financial Operations Ranking of the complete AmLaw 200.  A tantalizing thought, isn’t it?

Here’re the tables, while I go pack my SPF 70 sunblock and Tommy Bahama shirts:

Sunblock_2         Tommy_bahama_4












Mountain_east_south_central_perform

Mountain_east_south_central_ranking

July 09, 2007

LAND OF 10,000 LAKES SHOWS ‘EM IN MISSOURI

Minnesota_quarterLawBall's meandering journey through Legalritaville most recently landed it in the West North Central division, a 7-state area with AmLaw 200 firms concentrated in Missouri and Minnesota.  When the final LawBall tally was in, the competition was close but the Land of 10,000 Lakes showed ‘em in Missouri how the game is played.  In comparing the firms’ performance in the key metric categories of margin, asset turnover (revenue per lawyer), return on assets (ROA or profit per lawyer), leverage, and return on equity (ROE or profit per partner) by summing up each firm’s ranking in those categories, Minnesota firms garnered 3 of the top 4 slots; and, when also including the metric categories of gross revenues, profit, and costs per lawyer, Minnesota garnered each of the top 3 spots.

The division includes the 7 states of Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota and consists of 11 firms from the 2007 AmLaw 200 (2006 operating information) – 4 based in Kansas City, Missouri; 3 each in Minneapolis and St. Louis; and, 1 in Omaha.
The AmLaw 200 firms in the West North Central division’s 7 states are:

  • Missouri (7):  Blackwell Sanders Peper Martin; Bryan Cave; Husch & Eppenberger; Lathrop & Gage; Shook, Hardy & Bacon; Stinson Morrison Hecker; and Thompson Coburn.
  • Minnesota (3):  Dorsey & Whitney; Faegre & Benson; and Robins, Kaplan, Miller & Ciresi.
  • Nebraska (1):  Kutak Rock.

As has become the practice during our Legalritaville tour, I’ve put my observations before the analytic tables and have placed the tables at the end of this posting.  The tables include one that contains the 2006 financial operating performance metrics for each of the firms in the West North Central division and a second that shows the firms’ relative ranking (1 – 11) within each performance metric.  By clicking on the tables you can open a larger version.  I’ve also attached the tables as a *.pdf document in the right-hand margin under the category “Posting Attachments” as “Legal Industry West North Central Division Metrics 2006.”

Several observations:

  • Similar to the relative financial operating performance of its sister division in the Midwest, the East North Central, when compared to the aggregate performance of the AmLaw 200 the aggregate relative financial operating performance of the West North Central did not exceed that of the aggregate AmLaw 200 in any key metric category.
    • Five (5) firms in the division (45% of the division), though, did achieve margins that exceeded the aggregate AmLaw 200’s margin of 37.65%.  Those firms were Faegre & Benson (46.17%); Kutak Rock (42.71%); Thompson Coburn (42.40%); Robins, Kaplan, Miller & Ciresi (40.00%); and, Stinson Morrison Hecker (39.20%).
    • No firm in the division exceeded either the aggregate AmLaw 200’s asset turnover of $720,808 or the aggregate AmLaw 200’s ROE of $1,012,375.
    • One (1) firm in the division achieved an ROA that exceeded the $271,403 ROA achieved by the aggregate AmLaw 200.  That firm was Robins, Kaplan, Miller & Ciresi, who achieved a ROA of $285,714.
    • Two (2) firms in the division exceeded the 3.7302 leverage achieved by the aggregate AmLaw 200.  Those firms were Shook, Hardy & Bacon (5.0106) and Bryan Cave (4.0608).
  • When summing up the West North Central division’s firm rankings in each of the key metric categories, Minneapolis’ Robins, Kaplan, Miller & Ciresi finished 1st with 16 points, ahead of 2nd ranked Shook, Hardy & Bacon of Kansas City (22 points) by 6 points.  Robins, Kaplan garnered 1st place rankings in asset turnover (“offense”) and ROA, a 4th place ranking in margin (“defense”); an 8th place ranking in leverage (“special teams”); and a 2nd place ranking in ROE.  Shook, Hardy scored an 11th place ranking in margin and a 2nd place ranking in asset turnover, which resulted in a 7th place ranking in ROA; a 1st in leverage; and, a 1st in ROE.  In this instance, the offensive (asset turnover) and defensive (margin) performance of both firms resulted in an 8 point ratings advantage for Robins, Kaplan in those 2 categories combined and led to a 6-point advantage in ROA (remember, ROA = asset turnover x margin).  The aggregate 14-point ratings advantage in those 3 key metric categories was too much for Shook, Hardy’s 7-point leverage (special teams) and 1-point ROE ratings advantages to overcome.  The other 3 firms in the top 5 rankings were not far behind:  Minneapolis’ Dorsey & Whitney (25 points) and Faegre & Benson (26 points) and St. Louis’ Bryan Cave (27 points).  (Those totals are not included in the tables for space reasons but are included for all of the firms in the *.pdf attachment).
  • When summing up the firms’ rankings in all of the metric categories, Robins, Kaplan again finished 1st (36 points).  Then, Minneapolis’ Faegre & Benson (37 points) and Dorsey & Witney (38 points) finished 2nd and 3rd, respectively, followed by St. Louis’ Bryan Cave (39 points) and Kansas City’s Shook, Hardy (40 points).

Trophy_with_blue_ribbon The *.pdf attachment also has easy to view individual tables that reflect the firms’ individual rankings in margin, asset turnover, ROA, financial leverage, and ROE versus both the West North Central division in the aggregate and the AmLaw 200 in the aggregate.

Here’re the tables:

West_north_central_performance

West_north_central_rankings

July 06, 2007

THE WALL STREET JOURNAL FLUBS IT

Caution_2Dennis_miller_2_3 No matter how hard I tried to keep my fingers from “tickling the plastic,” I couldn’t do it.  When I read the article “Partnership Is No Longer a Tenured Position” in today’s The Wall Street Journal, as well as its sister piece in the WSJ’s Law Blog entitled, “De-Equitization:  A Buzzword Sweeping Big Law Nation,” I tried to let it go – but I couldn’t.  I just did a slow burn.  What follows is one of my Dennis Miller-type rants.

The WSJ got it partially right – partnership no longer is a tenured position.  But, the WSJ completely flubbed it with the sub-title to the WSJ article, which read “More Law Firms Thin Ranks of Partners to Boost Profits, Attract, Keep High Earners,” and with the article’s quote:

Once rare, quiet and restricted to the most competitive firms, "de-equitization" has become one of the most popular buzzwords in law-firm management. As corporate firms across the country with ambitions to grow and boost profits have aggressively and publicly thinned their partner ranks, the word has stoked a new sense of vulnerability among lawyers.

Similar faux pas appeared in the remainder of the article and in the Law Blog piece, whether written as a quote from a lawyer or a consultant or as narrative written by the authors.  What irks me is that the WSJ missed a golden opportunity to expand the debate to what really matters in terms of addressing what may be wrong in a given firm’s business.  I’ve said it before, and I’ll repeat it again now:  Profit per partner is a metric only.  It does not determine the amount of profit (or “net operating income” as The American Lawyer prefers to call it) that the business generates.  It simply measures the amount of that profit made as if it were to be distributed on a per partner basis.  Profit per partner is a return on the “sweat equity” (or in some instances, actual financial equity) contributed to the firm by its partners.  As a metric used in human capital-intensive businesses, It is similar to the return on equity (ROE) metric as used in financial capital-intensive businesses:  ROE doesn’t generate the amount of the profit; it just tells one what the amount of profit made is as a return earned on the capital invested over the subject time period.

Whether the business is a law firm or is a maker of widgets, the amount of profit is determined by the amount of gross revenues that a firm generates from its assets and how much of those gross revenues it is able to keep and not spend on expenses.  It is a function of margin and asset turnover  - multiplying the two together gives you a product that is the firm’s return on assets (ROA).  Further multiplying ROA by the amount of financial leverage gives one the firm’s ROE.  ROA actually may be a better metric for determining the health of a firm since it eliminates the effect of leverage.  There lies the importance of margin, asset turnover (revenue per lawyer), and ROA (profit per lawyer) that LawBall emphasizes.  It is why, when one sees ROE or profit per partner cited as a metric, he or she must then de-compose the metric in order to see what caused the end result – changes in margin, asset turnover, or leverage?  And, what do those changes say about the firm’s business model?

I have no doubt that a number of the firms that have employed “de-equitization” have engaged in simple denominator management – and done so wrongly, thinking that it will “boost profits” instead of actually understanding that the answer to a firm’s performance lies in understanding what happened in the constituent components of margin, asset turnover, and leverage, all of which relate directly to the firm’s business model and which include the demands of its business base and the capabilities of its asset base.  By going along with the line of thought that equates the amount of profit with the number of partners and repeating it without question, as it did in its stories today, the WSJ just flat got it wrong, and it did the industry a disservice.  It kept the bright light of controversy on simple denominator management - which won’t fix a thing except make the metric look better - instead of trying to turn the focus toward understanding how to determine what’s really wrong with the underlying businesses.

NIP/TUCK IN THE PACIFIC, LAWBALL STYLE

Nip_tuck With an apology up front to FX Networks, I should’ve guessed that when LawBall’s meandering journey through Legalritaville landed in the Pacific division, the concentration of firms in California in general (87%) and LA in particular (42%) combined with the 2006 financial operating performance of the division and its firms would make me think of something related to entertainment.  So, pardon the admittedly poor pun and play on words (caused by an extended 4th of July visit to Margaritaville), but the 2006 competitive financial operating performance in the Pacific division was “nip and tuck.”

The division includes the 5 states of Alaska, California, Hawaii, Oregon, and Washington and consists of 31 firms from the 2007 AmLaw 200 (2006 operating information) – 13 based in Los Angeles; 9 in San Francisco; 3 in Seattle; 2 in Palo Alto; and, 1 each in Irvine, Mountain View, Portland, and, San Diego.  Unlike the East North Central division and the South Atlantic division, no one firm in the Pacific division played LawBall in 2006 so much better than the others that it created a significant degree of separation.  Instead, when measured by the sum of each firm’s individual ranking in the key financial operating performance metrics of margin, asset turnover (revenue per lawyer), return on assets (ROA or profit per lawyer), financial leverage, and return on equity (ROE or profit per partner), the difference between the firm ranked 1st (Quinn Emanuel Urquhart Oliver & Hedges) and the firm ranked 5th (O’Melveny & Myers) was only 18 points.  By comparison, the difference between the 1st and 2nd ranked firms in the East North Central division was 15 points, and in the South Atlantic division the difference between the 1st  and 2nd ranked firms was 22 points.

The AmLaw 200 firms in the Pacific division’s 5 states are:

•    California (27):  Allen Matkins Leck Gamble Mallory & Natsis; Cooley Godward Kronish; Fenwick & West; Gibson, Dunn & Crutcher; Gordon & Rees; Heller Ehrman; Irell & Manella; Jeffer, Mangels, Butler & Marmaro; Knobbe, Martens, Olson & Bear; Latham & Watkins; Lewis Brisbois Bisgaard & Smith; Littler Mendelson; Loeb & Loeb; Luce, Forward, Hamilton & Scripps; Manatt, Phelps & Phillips; Morrison & Foerster; Munger, Tolles & Olson; O’Melveny & Myers; Orrick, Herrington & Sutcliff (whose terminated merger with Dewey Ballantine was discussed in a prior posting – Mergers, Metrics, and Other Musings); Paul Hastings, Janofsky & Walker; Pillsbury Winthrop Shaw Pittman; Quinn Emanuel Urquhart Oliver & Hedges; Sedgwick, Detert, Moran & Arnold; Sheppard, Mullin, Richter & Hampton; Thelen Reid & Priest; Townsend and Townsend and Crew; and, Wilson Sonsini Goodrich & Rosati.
•    Oregon (1):  Stoel Rives.
•    Washington (3):  Davis Wright Tremaine; Perkins Coie; and, Preston Gates & Ellis (which merged with Pittsburg-based Kirkpatrick & Lockhart Nicholson Graham on January 1, 2007 and now is part of Kirkpatrick & Lockhart Preston Gates Ellis LLP, a merger that also was discussed in Mergers, Metrics, and Other Musings).

As has become the case during our Legalritaville tour, the number of firms in the Pacific division and the resulting size of the analytic tables has led me to place my observations before the tables and to place the tables at the end of this posting - a table that contains the 2006 financial operating performance metrics for each of the firms in the Pacific division, as well as a table that shows the firms’ relative ranking (1 – 31) within each performance metric.  By clicking on the tables you can open a larger version.  I’ve also attached the tables as a *.pdf document in the right-hand margin under the category “Posting Attachments” as “Legal Industry Pacific Division Metrics 2006.”

Several observations:

  • When comparing the Pacific division’s performance in the key metric categories versus that of the aggregate AmLaw 200, the division did very well.
    • In each of the key financial operating performance metric categories, the division’s aggregate performance exceeded the aggregate performance achieved by the aggregate AmLaw 200:  margin (38.41% to 37.65%), asset turnover ($760,716 to $720,808), ROA ($292,201 to $271,403), leverage (3.9257 to 3.7302), and ROE ($1,147,105 to $1,012,375).
    • Seventeen (17) firms (55%) in the division achieved an asset turnover greater than did the aggregate AmLaw 200.
    • Fourteen (14) firms (45%) in the division achieved an ROA that exceeded the ROA achieved by the aggregate AmLaw 200.
    • Sixteen (16) firms (52%) in the division achieved an ROE greater than did the aggregate AmLaw 200.  A 17th firm in the division achieved an ROE of $1,000,000.
  • Photo_finish When summing up the Pacific division’s firm rankings in each of the key metric categories, Quinn Emanuel Urquhart Oliver & Hedges finished 1st with 26 points, nudging out 2nd ranked Gibson Dunn & Crutcher (32 points) by 6 points.  Quinn Emanuel was a model of consistency, with 4th place rankings in each of margin (“defense”), asset turnover (“offense”), and ROA; a 13th place ranking in leverage (“special teams”); and a 1st place ranking in ROE.  Gibson Dunn was not quite as consistent, with a 3rd place ranking in margin; a 1st in asset turnover; a 3rd in ROA; a 22nd in leverage; and, a 3rd in ROE.  In this instance, with the offensive (asset turnover) and defensive (margin) performance of both firms resulting in an ROA (remember, ROA = asset turnover x margin) that was nearly equal, the 9 point negative differential in special teams play (leverage) for Gibson Dunn was too much for it to overcome.  The other 3 firms in the top 5 rankings were not far behind:  Latham & Watkins (34 points) and Irell & Manella (34) points tied for 3rd; and O’Melveny & Myers (44 points) was 5th.  All 5 firms are LA-based.  (Those totals are not included in the tables for space reasons but are included for all of the firms in the *.pdf attachment).
  • When summing up the firms’ rankings in all of the metric categories, the same 5 LA-based firms occupied the top rankings, although the order changed slightly.  Gibson Dunn and Latham & Watkins tied for 1st with 56 points apiece.  Quinn Emanuel ranked 3rd with 64 points.  The cause for the difference?  When looking at all of the metric categories, gross revenue and profit are included and therefore size can matter – with 292 lawyers versus Latham’s 1,766 and Gibson Dunn’s 769, Quinn Emanuel ranked 13th in gross revenue and 8th in profit, while Latham finished 1st and 1st and Gibson Dunn finished 4th and 2nd, respectively. Finishing out the top 5 were O’Melveny & Myers (70 points)  (its size advantage – 2nd in gross revenues and 3rd in profit – was not enough to overcome its poorer relative performance in the key metric categories when compared to Quinn Emanuel) and Irell & Manella (73 points).

Trophy_with_blue_ribbon The *.pdf attachment also has easy to view individual tables that reflect the firms’ individual rankings in margin, asset turnover, ROA, financial leverage, and ROE versus both the Pacific division in the aggregate and the AmLaw 200 in the aggregate.

Here're the tables:

Pacific_division_performance_2

Pacific_division_rankings

July 02, 2007

WHEN IT REINS (WILEY, THAT IS), IT POURS – AT LEAST IN THE SOUTH ATLANTIC

Rainy_season_in_the_tropics_2 As the LawBall trip continued to wind its way through Legalritaville, the next stop was the South Atlantic division of the U.S., where the weather trended toward the rainy season in the tropics.  It certainly gave rise to that age-old axiom, “When it Reins, it pours” – at least as it relates to the 2006 comparative financial operating performance of Wiley Rein.

The division includes the 8 states of Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia, and West Virginia, as well as the District of Columbia, and consists of 37 firms from the 2007 AmLaw 200 (2006 operating information) – 19 based in Washington, D.C.; 7 in Atlanta; 3 in Richmond; 2 each in Miami and Tampa; and, 1 each in Charlotte and Winston-Salem, North Carolina and Columbia and Greenville, South Carolina,  No one in the South Atlantic played LawBall in 2006 any better than Wiley Rein – and when the focus is put on the key financial operating performance metrics of margin, asset turnover (revenue per lawyer), return on assets (ROA or profit per lawyer), financial leverage, and return on equity (ROE or profit per partner), Wiley Rein’s relative financial operating performance within it’s division at least was on a par with, and may even have been more dominating than that of, Kirkland & Ellis in the East North Central division.

The firms in the South Atlantic division’s 8 states and the District of Columbia are:

  • District of Columbia (19):  Akin Gump Strauss Hauer & Feld; Arent Fox; Arnold & Porter; Covington & Burling; Crowell & Moring; Dickstein Shapiro; DLA Piper US; Dow Lohnes; Finnegan, Henderson, Farabow, Garrett & Dunner; Hogan & Hartson; Howrey; McKee Nelson; McKenna Long & Aldridge; Patton Boggs; Steptoe & Johnson; Venable; Wiley Rein; Williams & Connolly; and, Wilmer Cutler Pickering Hale and Dorr.
  • Florida (4):  Akerman Senterfitt; Carlton Fields; Greenberg Traurig; and Holland & Knight.
  • Georgia (7):  Alston & Bird; Kilpatrick Stockton; King & Spalding; Morris, Manning & Martin; Powell & Goldstein; Sutherland Asbill & Brennan; and, Troutman Sanders.
  • North Carolina (2):  Moore & Van Allen; and, Womble Carlyle Sandridge & Rice.
  • South Carolina (2):  Nelson Mullins Riley & Scarborough; and, Ogletree, Deakins, Nash, Smoak & Stewart.
  • Virginia (3):  Hunton & Williams; McGuire Woods; and Williams Mullen.

Because of the number of firms in the South Atlantic division and the resulting size of the analytic tables, I’ve placed my observations before the tables, and I’ve placed the tables at the end of this posting - a table that contains the 2006 financial operating performance metrics for each of the firms in the South Atlantic division, as well as a table that shows the firms’ relative ranking (1 – 37) within each performance metric.  By clicking on the tables you can open a larger version.  I’ve also attached the tables as a *.pdf document in the right-hand margin under the category “Posting Attachments” as “Legal Industry South Atlantic Division Metrics 2006.”

Several observations:

  • Wiley Rein dominated financial operating performance in the South Atlantic division in 2006.  It ranked 6th in financial leverage and 1st in each of the other key financial operating performance metric categories:  margin, asset turnover, ROA, and ROE.  Wiley Rein played both great “offense” (asset turnover) and great “defense” (margin); and, the combination of those 2 metrics yielded the 1st place ranking in ROA – at a level that was nearly 1.85 times higher than the 2nd place ROA finisher.  Combine that with good “special teams” play – it’s 6th place ranking in leverage – and you have a 1st place ranking in ROE that was 2.57 times as much as the 2nd place ROE finisher.
  • Affirmed_alydar When summing up the East North Central division’s firm rankings in each of the key metric categories in the prior posting, I likened Kirkland & Ellis’ performance to Secretariat’s 31-length victory at the 1973 Belmont Stakes.  Carrying forward the horse racing analogy and imagery, when similarly summing up the South Atlantic division’s firm rankings in each of the key metric categories Wiley Rein’s 2006 relative financial operating performance likewise was so dominating as well that a race between the 2 firms might look like Affirmed and Alydar thundering neck and neck down the stretch in the 1978 Belmont Stakes.  Wiley Reins aggregate score in the key metric categories was a 10.  Finishing out the top 5 were 3 other D.C. firms – McKee Nelson with a 32; Akin Gump with a 47; and, Covington & Burling with a 54.  The other top 5 firm in the rankings was Atlanta-based King & Spalding with a 49.  (Those totals are not included in the tables for space reasons but are included for all of the firms in the *.pdf attachment).
  • McKee Nelson’s performance in the key metric categories ranked it a clear 2nd behind Wiley Rein’s 1st place ranking and ahead of Akin Gump’s 3rd place ranking.  McKee Nelson rated 2nd in margin, asset turnover, ROA, and ROE, behind Wiley Rein’s 1st place rating in each of those categories, while Akin Gump finished 17th, 7th, 10th, and 4th, respectively, in the same categories.  But McKee Nelson gave up a lot of ground in the rankings to Wiley Rein when it ranked 24th in leverage to Wiley Rein’s 6th; while Akin Gump’s inconsistent performance in the other key metrics kept its 9th place rating in leverage from significantly closing the gap with McKee Nelson.
  • Wiley Rein also ranked 1st, with a score of 58, when summing up the firms’ rankings in all of the metric categories.  Finishing out the top 5 again were 3 other D.C.-based firms – Akin Gump with an 89; Hogan & Hartson with a 98; and, Covington & Burling with a 98 – and Atlanta-based King & Spalding with a 90. (Again those scores are included only in the *.pdf attachment).
  • When comparing the South Atlantic division’s performance in the key metric categories versus that of the aggregate AmLaw 200, the division did fairly well.
    • Fourteen (14) firms (38%) in the division achieved a margin greater than did the aggregate AmLaw 200.
    • Fifteen (15) firms (41%) in the division achieved an asset turnover greater than did the aggregate AmLaw 200.
    • Fourteen (14) firms (38%) in the division achieved an ROA that exceeded the ROA achieved by the aggregate AmLaw 200.
    • Fifteen (15) firms (41%) in the division achieved a financial leverage higher than the aggregate AmLaw 200 leverage.
    • Ten (10) firms (27%) in the division achieved an ROE greater than did the aggregate AmLaw 200.  These firms included each of the 5 firms that finished 1 – 5 in the summed total of the key metric categories, together with 5 other firms, including 4 D.C.-based firms – Howrey; DLA Piper US; Dickstein Shapiro; and, Finnengan, Henderson, Farabow, Garrett & Dunner – and Miami-based Greenberg Traurig.

Trophy_with_blue_ribbon The *.pdf attachment also has easy to view individual tables that reflect the firms’ individual rankings in margin, asset turnover, ROA, financial leverage, and ROE versus both the South Atlantic division in the aggregate and the AmLaw 200 in the aggregate.

Legal_industry_south_atlantic_divis

Legal_industry_south_atlantic_div_2