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The term “Big Law” refers to the nation’s very large firms, as defined by the number of lawyers, size of revenue and number of offices.
Big Law firms are also “at the top of their practice,” says Jim Jones, who served as managing partner at Arnold & Porter and is now a senior fellow at Georgetown University Law School’s Center for the Study of the Legal Profession.
To identify those firms, most in the legal community start by looking at American Lawyer’s annual list of the nation’s largest firms, which is considered law’s equivalent to the Fortune 500.
American Lawyer began publishing its list in 1986. Comparing the lists of then and today, it’s clear that Big Law has become big business.
In 1985, the top firms on American Lawyer’s list, now commonly referred to as the “Am Law 100,” had a combined revenue of $7 billion, while, on average, partners reaped a profit of $309,314.
By 2022, half of the Am Law 100 firms were earning more than $1 billion a year, while the 2023 list’s combined revenue totals $130.8 billion. Last year, equity partners received an average profit of $2.56 million, while several firms sent partners home with double that amount.
But Big Law has undergone a dramatic transformation that goes beyond its skyrocketing revenue.
While Big Law was once thought to consist largely of elite Manhattan law firms, more than half of the nation’s leading firms are now based outside of New York, including in areas such as Houston, Seattle and Denver, says Eli Wald, Charles W. Delaney Jr. professor of law at the University of Denver Sturm College of Law.
In 1963, only 10 firms in the U.S. had 100 or more attorneys. Today, many top firms employ more than 1,000 attorneys. Two firms, Dentons and Yingke, each have well over 12,000 attorneys. Dentons, the world’s largest firm, has more than 160 offices in more than 80 countries.
Big Law is not the Wall Street monolith it once was, Wald says. Instead, he says that Big Law is now comprised of four types of firms:
Big Law firms have broader portfolios than the transactional and litigation work of the past. The greater U.S. firms particularly became powerhouses by working for industries central to their regions but largely ignored by Wall Street firms. For example, Texas’ Big Law firms often have become leaders in alternative energy circles because they already had deep expertise in energy law and strong ties with the oil and gas community, Wald says.
Adding to their appeal, firms outside of New York are cheaper, while their lawyers are equally accomplished.
Clients seem to agree. In 2022, mid-sized firms that rank between 101 to 200 on the Am Law list outearned their higher-ranked peers (at $131 billion).
For a litigation matter, if a client represented by an Am Law 50 switched to an Am Law 200 firm, “that decision alone probably saves you a third of the fees that you are going to pay,” Jones says. “Why wouldn’t you do it?”
The experience of practicing at these firms has evolved as well, says Lisa H. Rohrer, a professor at Boston University’s Questrom School of Business and senior advisor at Fairfax Associates. Rohrer and Georgetown professor Mitt Regan co-authored the 2020 book “BigLaw: Money and Meaning in the Modern Law Firm,” after interviewing more than 250 partners of Big Law firms.
Rohrer found that many Big Law attorneys love their work because they have a “platform to work with big clients doing interesting transactions, engagements and matters,” and they do so when the stakes are existential.
Additionally, Rohrer says, “Particularly for younger attorneys, it is fantastic training.” Big Law affords junior attorneys the opportunity to work on significant cases while they learn how to serve clients.
However, Big Law attorneys are constantly pushed by business concerns. They face economic uncertainty and career instability. While some firms thrive, others merge or even close, which was unimaginable in past decades. Clients want them to reduce costs while firms demand they increase billables. And their only measure of success is often compensation, Rohrer says.
To see partners’ profit, as high as it may be, “as an unmitigated sign of health and prosperity would be a mistake,” Wald says. Big Law attorneys are under relentless pressure to perform. Even equity partners must continue to deliver 24/7.
“For smaller companies without huge budgets and who are facing bread-and-butter issues, Big Law is not a good option,” Rohrer says. “It’s like getting in a Ferrari to go around the block.”
But large companies with specialized transactional matters or complicated litigation can benefit from Big Law’s expertise and scale.
Clients also rely on the reputation of Big Law firms. “There’s a certain brand value when you go with a Big Law firm,” Rohrer says. “Nobody gets in trouble when they hire GM. It’s the sort of same when it comes to hiring a Big Law firm.”
Jones agrees, saying that when clients are in a “bet the company” situation, it’s “price be damned, we have to have the best.”