US law firms have enjoyed yet another lucrative year, with five firms generating more than $1bn (£552.9m) in revenues.
According to the latest AMLaw 100 figures, Sidley Austin Brown & Wood broke the $1bn barrier for the first time in 2004, after posting an 11.2 per cent increase in revenues to reach $1.03bn (£570m). It joins Baker & McKenzie (B&M), Jones Day, Latham & Watkins and Skadden Arps Slate Meagher & Flom in the elite club.
However, it was New York firm Wachtell Lipton Rosen & Katz that enjoyed the greatest growth in turnover of all the 100-ranked firms, reporting a staggering 39 per cent increase to reach gross revenues of $431m (£238.3m), up from $310m (£171.4m) in 2003.
At the same time, Wachtell, the list’s smallest firm by headcount, retained its position at the top of the rankings based on profit per equity partner (PEP), with an average PEP of $3.5m (£1.9m) in 2004, up an eye-popping 35.4 per cent from 2003’s $2.6m (£1.4m).
This follows a highly successful year for Wachtell, which saw the firm secure a $2.2bn (£1.22bn) victory for World Trade Centre leaseholder Larry Silverstein over a group of nine insurers regarding the 11 September attacks.
More than one-third of the top 100 firms recorded a PEP of $1m (£553,000) or more last year, while New York firms proved to be the most profitable, with eight firms based in the city racking up an average PEP of at least $2m (£1.1m).
New York’s Wachtell also led in revenue per lawyer (RPL) and average partner compensation, while second-placed Sullivan & Cromwell posted a staggering 32 per cent increase in RPL to $1.4m (£770,000). Sullivan also enjoyed the greatest increase in turnover within the top 10 firms, reporting an increase of 21.3 per cent to reach $833m (£460.6m).
Skadden and B&M were the only two firms out of the top 10 based on gross revenue not to post double-digit growth in revenue, although the firms still ranked first and second respectively based on gross revenue, with equal increases of 8.3 per cent.
The biggest mover based on gross revenue was Wilmer Cutler Pickering Hale and Dorr, which rocketed up the rankings following the merger of Wilmer Cutler Pickering and Hale and Dorr in June 2004. The merger saw the firm jump from 58th to twelfth place, with a combined gross revenue of $750.5m (£415m).
For the second consecutive year, the average RPL grew faster than headcount, reflecting a return of big-ticket deals combined with a continued tightening of the market for associates.
Average RPL climbed by 8 per cent last year, while the total combined headcount of the top 100 firms grew by only 2 per cent.
At the same time, the number of non-equity partners in the top 100 US firms increased by 11 per cent, while the number of equity partners grew by only 3 per cent.
Overall, total gross revenues for the top 100 firms rose 10 per cent to reach a new record of $46bn (£25.43bn); partner profits climbed by 9 per cent to an average PEP of $960,000 (£531,000), while RPL increased by 8 per cent.