DIFFERENT STROKES FOR DIFFERENT FOLKS

Although I’m sure more than a few in the general populace might disagree, lawyers really are “Everyday People”; and, as Sly and The Family Stone so eloquently put it to music,

Different strokes for different folks
And so on, and so on and scooby-dooby-doo.

With that in mind, and with The American Lawyer’s 2007 AmLaw Survey results still fresh, I thought it might be fun to take a quick LawBall-type look at the metrics from a geographic perspective to see how those different strokes for different folks played out in 2006 for the “LawWorld.”  I’m not going to give any detailed analysis in this posting on the various geographic metrics, although I will make a few general observations.  Over the next few weeks, though, I expect to take a closer look within the geographic divisions at the firms themselves.

To group the firms without any personal bias toward geography, I turned to the U.S. Census Bureau’s map for regions and divisions.  The Census Bureau divides the U.S. into 4 regions:  the Northeast, Midwest, South, and West.  It then further divides the regions into divisions.  For purposes of this geographic glimpse at the metrics, I’ve used the Census Bureau’s divisions.  A copy of the map in *.pdf format is attached in the right-hand margin under the category “Posting Attachments” as “U.S. Census Bureau Regions and Divisions Map.”    Below is a table that lists the divisions within which are 2007 AmLaw Survey law firms (with the number of 2007 AmLaw Survey law firms within the divisions in parentheses), the states within the divisions, the divisions' largest law firm by gross revenue (Skadden, Arps, Slate, Meagher & Flom; Baker & McKenzie; Greenberg Traurig; Latham & Watkins; Fulbright & Jaworski; Bingham McCutchen; Bryan Cave; Snell & Wilmer; and, Baker, Donelson, Bearman, Caldwell & Berkowitz), and the largest firms' gross revenues.

Next is a table that contains the divisions’ financial operating performance metrics, as well as a table that shows the rankings (1 – 9) of each division within each metric.  The tables may be difficult to read within the blog, so by clicking on the tables you should be able to open a larger version; and, I’ve attached a copy as a *.pdf document in the right-hand margin under the category “Posting Attachments” as “Legal Industry Regional Metrics 2006.”

A few simple observations:

• Surprisingly to me, the West South Central region had the highest margin at 41.25%.  However, its 5th place ranking in asset turnover relegated it to 3rd place in return on assets (ROA or profit per lawyer), and its 7th place in leverage then resulted in its 6th place ranking in return on equity (ROE or profit per partner).
• Although 4th in gross revenues, profit, and margin, the Pacific rode its 2nd place ranking in asset turnover to a 2nd place ranking in ROA and its 2nd place in both ROA and financial leverage to a 2nd place ranking in ROE.
• Only 2 divisions achieved a higher ROA than did the AmLaw 200 in the aggregate:  the Middle Atlantic and the Pacific.
• Only 2 divisions achieved a higher ROE than did the AmLaw 200 in the aggregate:  the Middle Atlantic and the Pacific.
• The Middle Atlantic finished first in all categories except for costs per lawyer, where it finished 9th, and margin, where it finished 2nd.

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

Enjoy looking at and thinking about these geographic metrics!  And, to all the fathers who happen to read this posting, “Happy Father’s Day”!