So how did things fare one tier down? According to an article in last month's American Lawyer, the second hundred did even worse. After doing slightly better than their top 100 counterparts in 2008, the second 100 posted a small decline in per partner profits overall. What that number doesn't tell you is that over half (55) of the second 100 firms had an increase in PPP, with larger declines in the remaining 45 offsetting those gains. In particular, regional firms in the industrial Midwest had strong years as upheaval in the automotive and other manufacturing industries led to large amounts of work for those firms. Coastal firms didn't fare nearly as well as the declining real estate market took its toll.
The second 100 also showed a larger decline in per lawyer revenues, perhaps due in part to the fact that headcount in the second tier grew in contrast to the declining headcount in the first tier. Much of that increase came through mergers between smaller firms.
Where's the bright spot? Investors are slowly returning to the real estate market, drawn in by low prices. Money that has been sitting out the fall is trickling back in and coastal firms anticipate a stronger showing in 2010. The lateral market is heating up as firms look toward experienced associates to fill in gaps. There has never been a more important time to stay on top of the legal job market.
