In one of his most quoted moments of his career, Steve Martin, in The Jerk, shouted out in glee:

The new phone book’s here! The new phone book’s here! This is the kind of spontaneous publicity I need! My name in print! That really makes somebody! Things are going to start happening to me now.

So too will many law firms tout their standings in the National Law Journal 250.

But, what do these type of rankings actually mean? Are these types of rankings really worthy of all the print they get? What can you read between the lines?

Come on up NLJ 245, 246, 247, 248 and 249.

First of all, the NLJ 250 is based on headcount. Your rankings go up or down based on new hires, mergers, law firm layoffs and dissolutions. Heller and Thelen gave up their spots this year, making way for number 251 and 252 to move up. Mergers between another six NLJ ranked firms made room for the rest.

And while the 2008 NLJ 250 concludes that their results “indicate that law firms continued to add attorneys to meet clients’ needs, which increasingly are fanning out domestically and abroad,” I will continue to disagree. Headcounts does not necessarily translate into better client service.

For me, I like to read further down into these articles. That’s where the good stuff is. The stuff that no one likes to tout on their websites.

Partner promotions are down: While the overall number of partners remains consistent (approximately 40% of the NLJ 250), the percentage of NEW partners continues to decrease by percentage: 3.5% in 2007 vs. 4.6 in 2006 and 5.1 in 2005.

Non-equity partners continue to rise: A 9.4% increase compared to 2007 vs. 8.2% increase over 2006.

Mega-mergers are out: Only three marriages of NLJ 250s occurred in the past year. And, only one of them, K&L Gates broke the top 10.

Downward trends continue: Of the 10 “Firms That Shrank The Most,” 20% are already gone. Thelen is in the process of dissolving, while Powell Goldstein has been acquired. While the remaining eight firms performance is questionable, with a shrinking headcount ranging from 4% – 22% — for this year alone — the question becomes what can they do to stem the leakage?

There is no easy answer to that question, but it is one that we will pondered here in the coming days.

In the meantime what are some of the conclusions that can be taken away from the 2008 NLJ 250? Here’s what I see:
  • While the ability to engage your clients as a trusted advisor is expected in a boom economy, it must be paramount in a bust economy.
  • Mega-mergers do not = better client service. Mergers need to be deliberate and designed to meet CLIENT needs, not simply to boost headcount, firm revenue or partner profits. It is true that some mergers are necessary to increase attractiveness for laterals and new hires; however, this that should not be the PRIMARY motivating factor.
  • Successful law firms must continue to manage their firms like businesses. This does includes making difficult decisions, such as not raising hourly rates in 2009; lower PPEP expectations; and, unfortunately, layoffs and dissolutions.
  • Just as law firm partners profited immensely during the boom times, the same partners MUST be prepared to absorb their fair share during the bust times.

And, most importantly: