Press Releases

New York – Orrick, Herrington & Sutcliffe LLP announced today that it will no longer use or report, internally or publicly, the metric of Profit Per Equity Partner.  The firm believes the fundamental changes taking place in both the business of law and in the relationship between law firms and its clients have made the metric no longer constructive or informative for the firm or the industry.

"The legal profession is at a transformative moment, and now is the time to reconsider all of the metrics we have traditionally used to measure success," said Ralph Baxter, Orrick's Chairman and CEO.  "Our partnership is engaging in a serious dialogue to identify more appropriate metrics to evaluate our firm, to strengthen our client relationships, and to make our lawyers' careers even more meaningful. Moving away from the Profit Per Equity Partner metric is a step toward greater accuracy and transparency about law firm economics, and it will focus us even more on how we deliver value and efficiency to our clients."

This move follows the changes Orrick already introduced to its client-service model in the past year to better align the firm with its clients and its people, including innovative pricing in lieu of hourly billing, merit-based associate advancement in lieu of the traditional lockstep model, the creation of a variety of non-partner-track roles, and the introduction of new, efficiency-based client services.

When law firms first started reporting the Profits Per Equity Partner metric in the 1980's, partnership structures were  more traditional; partner roles and contributions were less varied, and the legal business much simpler.  Today, firms have made significant changes to their partnerships and business models.  These changes, among others, mean that Profit Per Equity Partner data actually provides little insight while maintaining an aura of undeserved transparency.

The American Lawyer's A-List, which measures the top 20 firms based on a mix of associate satisfaction, diversity and pro bono contribution, and revenue per lawyer exemplifies the direction in which Orrick is moving its law firm scorecard. "Today, more than ever, the Profit Per Equity Partner metric simply does not tell the market how profitable a firm is, how efficiently it is run, how well it serves its clients, how well it treats its people, or how committed a firm is to pro bono work, its community, and diversity," said Baxter.  "Clients and others have made it clear that the metric actually creates the impression that firms manage to the metric to make themselves look good, rather than managing for their clients, their people, and a sound long-term strategy. "

Orrick announced this change after a strong year in 2009.  Based on reporting from The American Lawyer, Orrick is among a small handful of law firms that enjoyed an increase in both its Profit Per Equity Partner metric and overall revenues in 2009.  The firm achieved these results after integrating over 70 lateral partners late in 2008 and weathering one of the worst economies in recent history. The firm expects even stronger financial performance in 2010.

About Orrick
Orrick, Herrington & Sutcliffe LLP is a global law firm with more than 1,100 lawyers in North America, Europe and Asia. The firm focuses on litigation, complex and novel finance and innovative corporate transactions. Orrick clients include Fortune 100 companies, major industrial and financial corporations, commercial and investment banks, high-growth companies, governmental entities, start-ups and individuals. The firm's 22 offices are located in Beijing, Berlin, Düsseldorf, Frankfurt, Hong Kong, London, Los Angeles, Milan, Moscow, New York, Orange County, Paris, Portland, Rome, Sacramento, San Francisco, Seattle, Shanghai, Silicon Valley, Taipei, Tokyo and Washington, D.C.

Contact
For more information, please contact us by e-mail pr@orrick.com or telephone at
415-773-5972.