There are many ways to judge the financial success of a law firm, including head count, total revenues, net profits and profits per partner.
For sure, PPP is favored among many. It is, after all, a flamboyant number that radiates bountiful achievement. Some firms in Texas boast $2 million in profits per partner. Others proclaim $3 million and a few even approach $5 million.
The problem with PPP, according to legal industry analysts, is the law firms can very easily manipulate profits per partner by modifying the definition of a partner. The Texas Lawbook does not use PPP as a measurement for that very reason – and because it is so damn corrupting to the legal profession itself.
Instead, The Lawbook interviewed more than two-dozen law firm chiefs – nearly every one of them agree, by the way, that PPP is highly inaccurate, misleading and promotes pure greed – seeking the most effective and fairest data point to gauge success.
Overwhelmingly, the answer was revenues per lawyer. Even firm leaders who swear by PPP admit that RPL is a more reliable statistic. To be sure, there are ways to manipulate RPL, too, but those methods are considerably more limited and can be more easily detected.
The magic number for revenue per lawyer continues to be $1 million. Law firms that generate $1 million in revenue for every lawyer they employ are considered the most successful, the elite.
There are seventeen corporate law firms operating in Texas that hit and surpassed the $1 million in RPL in 2018 – one more than reached the milestone in 2017.
Only two of the 17 elite law firms generating $1 million in revenues per lawyer are based in Texas. One of them is easy to guess: perennial corporate legal powerhouse Vinson & Elkins, which ranks 10th in Texas with an RPL of $1.201 million.
The second Texas firm to join the elite ranks in 2018 is Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing – also known as AZA – a Houston litigation boutique which debuts on the elite ranking at No. 6 with $1.234 million.
Five of the most successful corporate law firms in the history of the world are now also dominating The Texas Lawbook rankings, including:
Simpson Thacher has only 32 lawyers in its Houston office, but the RPL for those attorneys is an astonishing, record-breaking $1.68 million.
Kirkland & Ellis ranks second in Texas with an RPL of $1.65 million, which is even more impressive because the firm has been growing its headcount at a fast pace over the past three years.
Gibson Dunn witnessed the largest increase in RPL – jumping from $1.3 million in 2017 to $1.45 million last year. Gibson Dunn’s Dallas office represented AT&T in its antitrust battle with the federal government and they won.
Latham & Watkins ranks fourth with $1.33 million in RPL, while Weil Gotshal reported $1.307 million.
Law firms that experienced significant declines in RPL include Baker Botts, Hunton Andrews Kurth and Coats Rose.
*Updated chart contains a new RPL for Foley Gardere correcting an apparent typographical error in the original submission.