ALM’s Composite Rankings Index combines current year rankings and year-over-year growth rankings from the Am Law 200 & NLJ 500 to rank firm performance
New York, NY – July 27, 2022 – ALM is pleased to announce the release of its 2022 Composite Rankings Index.
The Composite Rankings Index (CRI) from ALM Intelligence and Law.com Pro is a weighted index utilizing data-derived rankings from the most recent two years of Am Law 200 and NLJ 500 surveys. To assess annual performance, the CRI incorporates current rankings with year-over-year growth rankings of key revenue, profit, and diversity metrics.
The Am Law 100 & 200 rank firms by revenue, while the National Law Journal (NLJ) 500 ranks firms by total full-time equivalent attorneys, but the CRI does not use either gross firm revenue or total firm attorneys. Instead, we designed the index to limit the impact of law firm size and geographic location by placing greater emphasis on year-over-year growth rankings.
The unique combination of rankings from the Am Law 200 & NLJ 500 surveys generated some interesting insights, including:
– Firms that excelled in the year-over-year growth of “per lawyer” metrics and grew the equity partnership percentages for women and ethnic minorities ranked higher overall
– The average Am Law 200 ranking for the firms ranked in the CRI’s top 20 is 44, and only four firms in the CRI top 20 ranked in the Am Law top 20
– Two firms from Am Law’s second hundred (101-200) ranked in the CRI top 20: Foley Hoag (12th) and Pryor Cashman (17th)
“We developed the CRI to more effectively evaluate the year-over-year performance of firms ranked in the Am Law 200”, said Patrick Fuller, Vice President & General Manager of ALM Intelligence. “Each year, there are firms generating high rankings in key metrics which may not be generating year-over-year growth at the pace of the broader market. Our goal was to develop a supplemental ranking model that incorporates financial and diversity metrics, and the CRI does that.”
The CRI features three categories, each consisting of rankings for related metrics:
– The Revenue & Compensation Metrics category includes Revenue Per Lawyer (RPL) and Revenue Per Lawyer growth rankings, Revenue Per Employee rank, and Compensation Average for All Partners (CAP) and CAP growth rankings
– The Profit Metrics category includes Profit Per Equity Partner (PEP) and PEP growth rankings, Profit Per Lawyer (PPL) and PPL growth rankings, Profitability Index rank, and Profit Margin (PM) & PM growth rankings
– The Diversity Metrics include Female Equity Partner percentage rank and growth rank, Female Attorney percentage rank and growth rank, and Diverse Equity Partner rank and growth rank
”One thing the Am Law 200 ranking makes clear is there is no one path to success among the nation’s largest law firms, but anyone ranking can only account for so much,” said Gina Passarella, editor-in-chief of The American Lawyer and ALM’s global legal brands. “The Composite Ranking Index allows the market to assess those firms that may not rank first in any certain metric but are showing strong gains across a number of important areas.”
Each metric ranking is weighted, and the weightings for all categories add up to 1.00. No one category is weighted less than .02 or more than .10 of the total score. With one exception, we weight year-over-year growth rankings slightly higher than the current year ranking to minimize the impact of firm size and geographic location. The higher a firm is ranked in a particular metric, the lower the score for that criteria. We then tabulate the scores for each metric to produce the category score and, ultimately, the final score.
This report is available for download on Law.com Compass.
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