The AmLaw 100 and Major League Baseball arrive around the same time each spring, and you might think that’s about all one has to do with the other. (Check out the latest AmLaw 100 report here.) But bear with us while we draw a connection between these two great traditions, both of which reveal the power of statistics. Baseball fans obsess over ERAs and slugging percentages, while The American Lawyer’s annual report has fixed the profession’s attention on numbers like revenue per lawyer and, of course, profits per partner.
In most respects, this is a good thing. The annual AmLaw 100 has made law firms’ finances more transparent than ever, giving the labor market access to valuable information. But, of course, nothing so valuable comes without some kind of downside.
Which is this: Once created, statistics can capture our imagination to such a degree that they become limiting. A recent Nate Silver piece, for instance, convincingly criticized the “save” statistic in baseball, arguing that it has negatively impacted the way relief pitchers are used. He proposed a new stat, the “goose egg,” as a better measure of the effectiveness of relievers. (We won’t get into the weeds, but here’s the article: “The Save Ruined Relief Pitching. The Goose Egg Can Save It.”)
Similar observations have been made about the AmLaw 100 report. Most frequently, commenters have noted that, given the importance of “profits per partner” in lateral recruiting, some firms chase large PPP numbers to the detriment of their long-term health. But this year’s numbers got us thinking about the original AmLaw 100 statistic: the list of the 100 U.S. law firms with the most revenue.
We wondered: is it still a valuable concept? As the rich law firms get richer, they also get smaller in number. And we’ve reached a point this year where it feels like including the firms at the very top with the rest of the AmLaw 100 is like throwing a few apples in with the oranges. How meaningful is it to say that PPP rose by 3% in 2016, when digging deeper reveals that it rose 6.1% for those in the top 50, and declined 1.7% for the bottom 50?
If we’re going to consider changing the “100” in the AmLaw 100, what about the “Am” and the “Law”? In a globalized business world, should we still be limiting the AmLaw 100 list to U.S.-based firms? And should we still limit the list only to law firms, when increasingly, legal services providers are doing so much work they used to perform?
The best answer to those questions is probably yes, but only for the moment. The American Lawyer appears to be way ahead of us in thinking them through. In recent years, it defined a new statistical category, the “super rich” law firm, and tweaked it again this year so that it remained an exclusive group of just 24 firms. Arguably, it does the best job of drawing a line between the most elite firms and their peers.
We wouldn’t be surprised to see this super-rich category become the most closely watched element of the AmLaw 100. Just like we won’t be surprised to see the goose egg, or some variation of it, build momentum and eventually surpass the save.