Law Firm Consultants Explain Rationale for Challenging AmLaw Rankings

Law firm consultants Bruce MacEwen and Janet Stanton, of Adam Smith, Esq., spoke with Big Law Business on Tuesday afternoon about why they have created a survey to gauge the accuracy of the American Lawyer’s annual list of the top-grossing U.S. law firms, otherwise known as the AmLaw 200.

Below is a lightly edited transcript of the interaction.

Big Law Business: How did you think up the idea for this, and what do you hope to accomplish?

MacEwen: I want you to understand that this did not come out of the blue. I met with Aric Press [Kleman’s predecessor at American Lawyer] over a year ago and handed him a one page — less than a page — letter. It was a memo of bullet points, suggesting putting in an asterisks next to firms that didn’t participate, maybe a dagger next to firms that attest that their information was correct, you know. But we have heard absolutely nothing. Not only has nothing been done, but no rational explanation has been forthcoming.

We have heard for many years, managing partners, executive directors, CFOs at firms, that their firm doesn’t participate, and that they know…. the real numbers about another firm and what AmLaw published is laughable.

Stanton: They say their own numbers internally are less rosy than ALM (figures). ALM can’t control that. But they can control revealing who has reported and who has not.

MacEwen: There is no other set of publicly available information on the industry that is so widely used and has such a high profile than the AmLaw numbers and and we feel, Adam Smith, Esq has a platform and we really feel a responsibility to try to improve transparency about the industry and ALM is not doing it… We aren’t asking them to lift a finger. We are just asking them to disclose what they know about the source of the information.

We have asked over the years for them to disclose which firms don’t report (their financial data), and perhaps when was the last year that the firm did report.

Big Law Business: So what do you hope the end result will be here?

MacEwen: Ideally for me, it’s to have enough data to credibly go to AmLaw and say, basically, ‘This is what the firms that you are reporting on are telling us, or are really telling you. And we’d like to see a proposal to bring increased transparency to the derivation of the AmLaw numbers.’

Big Law Business: What’s the upshot of potentially inaccurate financial reporting to AmLaw?

MacEwen: I think it’s exacerbating a partner arms race. We happen to think it has a toxic effect on the industry. If you think you can go to another firm and make $1.6 million and the average is really $1.1 million, maybe if you knew the average is $1.1 million you’d stay where you are.

Big Law Business: Is this a client-driven project?

MacEwen: No client has ever asked us to do this, that’s for sure. I don’t think we’ve ever brought it up.

Big Law Business: What kind of feedback have you got so far?

Stanton: We have already 50 responses to the survey and some softball comments. Some have sent us emails saying, ‘Hip hip hurray!’ and, ‘We will get this to the right person who is best to answer.’ I just think law land deserves better.