Published for Thomson Reuters Legal Executive Institute on July 28, 2015
The American Lawyer magazine announced its annual “A-List” this week, recognizing 20 American law firms which it calls the “new elite.” It is interesting to see which firms make the list each year and how they rank.
What really makes the A-list important, however, is the welcome emphasis it places on factors other than money. Widely held responsible for the legal industry’s fixation on profits per partner since it initiated law firm financial rankings 28 years ago, The American Lawyernow does the profession an important service by stimulating public focus on other elements of law firm performance.
The A-List was the brainchild of long time Editor-in-Chief, Aric Press. As one of the most astute observers of the legal profession in our time and a responsible steward of his magazine, he saw the need to broaden what was ranked. So, in 2003, with more than a little fanfare, Aric and the magazine launched the A-List.
The A-List rankings are based on four criteria, only one of which is financial: revenue per lawyer, pro bono, associate satisfaction, and diversity. Each is a sensible proxy for an important dimension of law firm performance.
- Revenue Per Lawyer—Revenue per lawyer is a good proxy for firm financial performance. It is a relatively straight forward number that can be calculated the same way by all firms, regardless of partnership model or other idiosyncrasies. It expresses the average amount the market pays a firm in a given year for the services of one of its lawyers, and therefor inherently captures the value the market sees in the firm’s services.
- Pro Bono—Pro bono activity is a good proxy for professionalism. While there are other examples of professionalism, this one is universally accepted by firms as part of their duties to the profession and the community at large.
- Associate Satisfaction—Associate satisfaction goes to the heart of the culture of the firm. Do the associates find the experience of working in the firm satisfying and rewarding? How do the associates rate the firm as a trustee for the development of their careers?
- Diversity—All major American firms strive to be more diverse. Not only is it the right thing to do, firms recognize that the more diverse they are, the better they will serve their clients. That said, all firms struggle to be as diverse as they want to be. The diversity criterion is both a sound measure of the quality of the firm and its social responsibility.
Influencing the Behavior of the AmLaw 200
I congratulate The American Lawyer for its leadership in publishing the A-List. I believe it is having a positive impact on how law firms think about what matters. Just as law firm leaders are conscious of their firms’ ranking on the profitability metrics of the AmLaw 200, they are now mindful of their ranking on the A-List criteria. And lawyers being the competitive personalities they are, aspire not only to do well, but to make it into the Top 20.
The impact is observable in the results of the A-List tally over the years. The overall scores have risen steadily. In the first year the average score of the A-List firms was 994 out of a possible 1200. This year the average score of the A-list firms was 1045.
And individual firms have dramatically increased their positions. Of the Top 10 firms this year, eight were not on the A-list in 2003, and had an average ranking of just 48.
The A-List will influence the behavior of firms on how responsible they are to their communities, how they support the careers of their associates, and how diverse they become. Good news for the profession and the clients it serves.