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July 09, 2007

LAND OF 10,000 LAKES SHOWS ‘EM IN MISSOURI

LawBall'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).

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:

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