Can Firms in the Am Law 51-100 Keep from Falling Further Behind?
For years the Am Law 200 results have shown a deepening chasm between the most elite firms and the rest, and 2016 was no different. But this spread is posing a particular challenge for the firms that rank just below the largest and richest firms. The Am Law 51-100 is at a crossroads. In a legal services climate where standing out from the pack is the key to success, this varied group of firms share some common elements that make differentiation difficult to achieve.
Blank Rome, which has long been in the Am Law 51-100, has taken a hybrid approach to moving the needle. It added in certain practices and cities, but also focused on a certain upper middle-market client base rather than marketing to larger clients that often go to a set stable of larger firms. In early 2016, Blank Rome brought on more than 100 lawyers from Dickstein Shapiro, adding to its government contracts and insurance practices and significantly boosting its presence in Washington, D.C. The move raised Blank Rome's gross revenue by 22.5 percent to $422.5 million and moved it from 94th to 78th on this year's Am Law 100 ranking. PPP rose 2.2 percent to $910,000.
Chairman Alan Hoffman says the firm doesn't manage to its gross revenue ranking, but is in the final year of a five-year strategic plan to grow in "tier one" cities. Some 60 percent of Blank Rome's current lawyers were not at the firm in 2011, when the strategic plan was being drafted, Hoffman says.
"Our view, looking at our strengths of our different practice areas was to grow revenue with upper middle-market clients," Hoffman says, noting the firm recognizes that a Fortune 50 company will likely always hire a brand-name New York firm for big deals.
Hoffman says all firms are looking at how they can grow revenue because more revenue can mean more profitability. "But at a certain point, you always are focused on profitability, and I think that is going to be what law firms focus on more and more," he says.
Focusing on profitability ties to a need for project management, alternative fee arrangements and the use of nonpartner-track associates. That ties into another issue firms are dealing with: talent management.
About 15 or 20 years ago, associates were billing 2,200 to 2,600 hours a year, Hoffman notes. That number is significantly lower now, he says.
"Now there is what's called 'quality of life.' I had no life," Hoffman jokes about his time as an associate. "How is that going to impact law firms? How are law firms going to continue to grow and make it beneficial for our associates and partners to be part of a law firm because we can address their quality of life needs?"
Hoffman says one of the things that keeps him up at night is making sure his partners are happy and don't walk out the door with a group of lawyers.
To read the full article, please click here.
"Can Firms in the Am Law 51-100 Keep from Falling Further Behind?," by Gina Passarella was published in The American Lawyer on April 26, 2017.