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Adam Smith, Esq.: An inquiry into the economics of law firms....
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� AmLaw Global 100: 2005
Main
Are Your Lawyers Blogging Yet? �
November 7, 2005
Switch to Two-Tier & Boost PPP! (Not So Fast)
Last Friday I attended a presentation at Jones-Day's Washington,
DC office, hosted in their top-floor conference room with a picture-postcard
view of the Capitol dome. (I'm not kidding about the postcard view;
CBS News has built a broadcast booth on the Jones Day roof, where they
most recently installed Dan Rather for Bush's second inaugural, and which
they use whenever there's Capitol-centric news.)
The presentation was by my friend Prof.
Bill Henderson of Indiana University School of Law/Bloomington,
and focused on some fascinating, and counterintuitive, empirical findings
of his about trends in the AmLaw 200 over the past decade or so. (The
law school's dean, Lauren
Robel , was also there.) Here are some highlights:
In the past decade, one-third of the AmLaw 200 has converted from
single-tier, up-or-out, partnership structures to two-tier structures
with so-called "non-equity" partners.
160 of the 200 (80%) are now two-tier firms; whereas the single-tier
model had a virtual monopoly on the leading firms say, 25 years ago,
it's now the distinct minority structure.
The universally accepted common wisdom is that firms moved to a two-tier
structure to increase profits per partner.
So how do single-tier and two-tier stack up?
"
....
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