The Top 20 Most Profitable Law Firms (2021)

One firm had profits per partner of more than $8 million last year—wow.

(photo via iStock / Getty Images Plus)

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Make hay while the sun shines—and in 2021, Biglaw firms did exactly that. Taking advantage of a strong economy and scorching M&A market, the Am Law 100 notched what Ben Seal of the American Lawyer described as “the group’s best financial results in a generation.”

Last month, the American Lawyer issued the 2022 Am Law 100 rankings, based on financial performance in 2021. Taken as a group, the nation’s 100 largest law firms did remarkably well. Here are the overall metrics for last year:

• Total revenue: $127.4 billion, up by 14.8 percent.

• Average revenue per lawyer (“RPL”): $1.18 million, up by 12.5 percent.

• Profits per equity partner (“PEP”): $2.66 million, up by 19.4 percent.

To get a sense of how impressive these growth rates are, compare them to the figures from 2019 and 2020, already record years for Biglaw:

What drove revenue growth? In his detailed analysis, Patrick Smith pointed out that the Am Law 100 raised headcount by a mere 2.1 percent—so the increase in revenue was fueled by lawyers billing more hours and by firms raising billing rates, not by firms simply having more butts in Aeron chairs (or swaddled in sweatpants, on couches across the country).

How much harder did lawyers work in 2021? According to the American Lawyer, among the 61 firms that submitted billing data to Am Law, total hours billed by lawyers increased by 5.7 percent between 2020 and 2021, and the average lawyer in the Am Law 100 billed 3.9 percent more hours in 2021. That might not sound like a lot, but as noted by Am Law’s Dan Roe, it amounts to two extra weeks of work.

What allowed lawyers to work so much harder? First, a red-hot, record-setting M&A market, especially in terms of private equity M&A. Demand for M&A work in 2021 was up by 4.7 percent when compared to 2019, the banner year that deal work enjoyed right before the pandemic. Contrast that with the 2021 performance of bankruptcy, litigation, and labor and employment, which were below 2019 levels by 5.4, 1.2, and 1.1 percent, respectively (per the Thomson Reuters Institute’s 2022 Report on the State of the Legal Market).

Second, thanks to the pandemic, many lawyers continued to work remotely in 2021. For a lawyer with an hour-long commute each way, eliminating the commute yields up ten extra hours each week, at least some of which can be devoted to work. On top of that, the world wasn’t fully reopened in 2021, so lawyers had fewer things to do other than work—fewer lunches and dinners with friends, fewer parties and conferences, and fewer movies, plays, concerts, sporting events, and other entertainment options (aside from Netflix and other streaming services).

That’s the big picture. Now let’s take a deeper dive into three key metrics—gross revenue, revenue per lawyer, profits per equity partner—and the top 20 firms in each.

And yes, Virginia, there is now a law firm with profits per partner over $8 million….