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Biglaw's race to "reveal"

By Mark Obbie

Law blogs and magazines are abuzz as major law firms voluntarily report their revenues and profits per partner. WSJ Law Blog's Ashby Jones rightly notes that the trend is remarkable, and he notes the lingering controversy as traditionalists hold onto their belief that disclosure is too crass for a Professional Firm. All very interesting. But, as a veteran of 17 consecutive years of AmLaw 100 reporting -- starting with the first one -- let me point out why this rush to disclose isn't all good for journalists, and why we still need reporters.For many years, most big firms have voluntarily disclosed these figures to The American Lawyer and occasionally more broadly. Some lie about whether they do it. Some admit it. But the magazine doesn't simply take their word for it. I know this will come as a shock, but sometimes the lawyers at those firms have been caught lying to make themselves look bigger and richer. Beyond deceit, there's also the question of definitions. Lacking a standard set of rules, as public companies have, private partnerships and professional corporations have a range of definitions of "partner/shareholder" or "profits." It often takes some poking and prodding to discover that a firm has a distorted profits-per-partner picture because of how it classifies partners and certain expenses. My head hurts just thinking about all of it.Confirming numbers with multiple partners often turns up anomalies, let us call them, that end up discounting the official numbers. This reporting method isn't perfect, but it's far better than simply taking the word of the firms. What I fear is that the partner-sources will be less likely to contradict their leaders when these numbers are peddled in a press release rather than just whispered to one reporter. If that partner pokes a hole in the myth of the $2 million profits-per-partner average, has he exposed his firm -- which is to say himself -- to a fraud suit? (And who, you might ask, is the victim of said fraud? The very targets of this PR effort: entry-level and senior-level lawyers the firm hopes to recruit.)Just putting that out there.

Full post as published by Lawbeat on February 14, 2008 (boomark / email).