Leverage Still Rules: There's one difference between law-firm 'haves' and 'have-nots'
![chart](https://abajournal.com/images/mag_images/01NUMBz-leverage-3.5-5.0.png)
Chart Illustration by Stephen Ravenscraft
Thomson Reuters Peer Monitor, in its 2016 Law Firm Leaders Forum Special Report, used compound annual growth-rate statistics to divide large law firms into “haves”—showing 10 percent or more CAGR growth between 2013 and 2015, and “have-nots,” which showed 0 percent or less. CAGR is a measure of growth over multiple time periods.
One growth factor was surprising: Large firms with lower fee increases, averaging around 2.4 percent, grew revenue faster than 2.7 percent, while those with higher fee increases, averaging around 3.2 percent, grew slower. And one truth remains true—firms with fewer equity partners than associates were haves, while those with more partners than associates were among the have-nots.
Source: 2016 Law Firm Leaders Forum Special Report. More information at legalexecutiveinstitute.com