chairman, bradley arant boult cummings llp...beau grenier, chairman, bradley arant boult cummings...

A Comprehensive Update on Law Firm Financial Performance & Metrics

Moderator:

Beau Grenier, Chairman, Bradley Arant Boult Cummings LLP

Panelists:

David Gaulin, Partner, Law Firm Services Leader, PricewaterhouseCoopers LLP

William Josten, Senior Analyst, Client Relations & Thought Leadership, Thomson Reuters

Elizabeth A. Sharrer, Partner & Firm Chair, Holland & Hart LLP

Ted Tinson, Chief Operating Officer, Sheppard, Mullin, Richter & Hampton LLP

Comprehensive Update on Law Firm Financial

Performance & Metrics

21st Annual Law Firm Leaders Forum

October 6, 2016

REUTERS / Jason Lee

-2%

0%

2%

4%

Demand Worked Rates

Fees Worked

Productivity Lawyer Growth

Y/Y Change

Q4'15 v Q4'14 YTD Dec: '15 v '14

ALL SEGMENTS

Key Performance Measures

All timekeepers

Billable time type; non-contingent matters

Dec ‘15 and ’14 had equal working days 3 2016 Law Firm Leaders Forum - October 6, 2016

-40%

-30%

-20%

-10%

0%

10%

20% Y/Y Change

YTD Dec: '15 v '14 YTD Dec: '14 v '13

Firms with positive growth are experiencing average of 4.5% during this period in contrast to

those in negative territory experiencing -6.0%

ALL SEGMENTS

Demand Growth by Firm, YTD Dec.

All timekeepers

Billable time type; non-contingent matters 4 2016 Law Firm Leaders Forum - October 6, 2016

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80% Y/Y Change

YTD Dec: '15 v '14 YTD Dec: '14 v '13



ALL SEGMENTS

Profit Growth by Firm, YTD Dec.

G/L Revenue 5 2016 Law Firm Leaders Forum - October 6, 2016

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80% Y/Y Change

YTD Dec: '15 v '14 YTD Dec: '14 v '13

“Haves”

+10% 3-year Profit

“Have Nots”

0% or negative 3-year

Profit CAGR



ALL SEGMENTS

Profit Growth by Firm, YTD Dec.

G/L Revenue 6 2016 Law Firm Leaders Forum - October 6, 2016

-6%

-4%

-2%

0%

2%

4%

6%

8%

Demand Worked Rates

Fees Worked


2015 v 2014 Y/Y Change

"Haves" "Have Nots"

“Haves” v. “Have Nots”


All timekeepers


8 2016 Law Firm Leaders Forum - October 6, 2016

“Haves” and “Have Nots”

What Didn’t Matter

Rates

– Worked rate growth the same for both

groups

Geography

– Among the “Haves”

• 7 Northeast

• 7 Southeast

• 9 Midwest

• 3 Sourthwest

• 6 West

– Among the “Have Nots”

• 9 Northeast

• 5 Southeast

• 13 Midwest

• 2 Southwest

• 5 West

Segment

– Among the “Haves”

• 12 Am Law 100

• 8 Am Law Second 100

• 12 Midsize

• 16 Global

• 8 National

• 8 Regional

– Among the “Have Nots”

• 9 Am Law 100

• 9 Am Law Second 100

• 16 Midsize

• 12 Global

• 3 National

• 18 Regional

86.9%

83.3%

85.0%

81.4%

80%

81%

82%

83%

84%

85%

86%

87%

88%

89%

Q4 '12

Q1 '13

2 3 4 Q1 '14

2 3 4 Q1 '15

2 3 4

"Haves" Billing "Haves" Collection "Have Nots" Billing "Have Nots" Collection

Realization against Standard

Lawyers


18.2% 15.8%

32.2% 39.1%

39.4% 35.0%

5.1% 5.6% 5.2% 4.5%

0%

20%

40%

60%

80%

100%

"Haves" "Have Nots"

Of Counsel

Sr. Counsel

Associates

Equity Partner

Income Partner


Timekeepers – 2015

Lawyers


Only 2 “Haves” reported no Income Partners, compared to 3 “Have Nots.” There were also 3 “Haves” with no Of Counsel and 9 with no

Sr. Counsel. Compare that to 8 “Have Nots” with no Of Counsel and 5 with no Sr. Counsel.

70

80

90

100

110

120

130

140

150

Q4 '12

Q1 '13

2 3 4 Q1 '14

2 3 4 Q1 '15

2 3 4

Ho

urs

pe

r M

on

th

"Haves" "Have Nots"


Hours Worked per Lawyer

Lawyers


0%

1%

2%

3%

4%

5%

6%

7%

8%

Q3 '14

4 Q1 '15

2 3 4

Rolling 12-Month Y/Y Change

Direct Overhead

“Haves”

Expense Growth


2.8% 2.4%

1.8%

0.2%

-0.8%

-1.4%

2.3%

1.3% 1.2%

0.8%

0.2%

-0.7%

-2%

-1%

0%

1%

2%

3%

4%

Q3 '14

4 Q1 '15

2 3 4

Rolling 12-Month Y/Y Change

Direct Overhead

“Have Nots”

Expense Growth


-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

Sta

ff C

om

p

Occu

pa

ncy

Te

ch

no

log

y

Off

ice

Be

ne

fits

(p

rofe

ssio

nal

sta

ff)

Ma

rke

tin

g

& B

iz D

ev

Lib

rary

Re

cru

itin

g

$ per Lawyer FTE (Last 12) Y/Y Change (per Lawyer)

“Haves”

Overhead Detail


-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

Sta

ff C

om

p

Occu

pa

ncy

Te

chn

olo

gy

Off

ice

Be

ne

fits

(p

rofe

ssio

na

l sta

ff)

Ma

rke

ting

&

Biz

Dev

Lib

rary

Re

cru

itin

g

$ per Lawyer FTE (Last 12) Y/Y Change (per Lawyer)

23.7%

“Have Nots”

Overhead Detail



How will 2016 impact us all?

-4%

-2%

0%

2%

4%

Demand Worked Rates

Fees Worked


Y/Y Change

Q2 '15 v Q2 '14 YTD June: '16 v '15

ALL SEGMENTS


All timekeepers

Billable time type; non-contingent matters

June ‘16 and ’15 had equal working days 17 2016 Law Firm Leaders Forum - October 6, 2016

YTD Worked Rate Growth: 3-Year Analysis

0%

2%

4%

6%

Am Law 100 Am Law Second 100 Midsize YTD '14 YTD '15 YTD '16

All timekeepers

Billable time type


YTD Fees Worked Growth: 3-Year Analysis

0%

2%

4%

6%

Am Law 100 Am Law Second 100 Midsize YTD '14 YTD '15 YTD '16

All timekeepers

Billable time type



Panel Discussion

chairman, bradley arant boult cummings llp...beau grenier, chairman, bradley arant boult cummings...

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