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Message: <blockquote data-quote="xMontmorency" data-source="post: 203972" data-attributes="member: 32743">I agree, PEP is probably a reliable way of measuring the prestige - or at least the profitability of a firm. But I think there is a better metric - billable rates.The main problem with PEP is that it is just shows the overall profits available for distribution to equity partners. This means that the results are skewed depending on how many equity partners a law firm has. Firms that are highly leveraged on associates (e.g. associate/counsel to partner ratio of 5+ to 1) or non-equity partners will have higher PEP, with more junior lawyers churning out the cash for the equity partners. The other problem is that it doesn't account for different profits levels in different geographic regions, where profits are equally distributed between offices which bring in different levels of revenue (assuming no swiss model).The real thing you want to know is (i) whether the firm can land the top mandates and (ii) whether they can charge more for each hour worked at each level. Firms with high PEP (US firms) tend to fulfil these criteria, but in London elite MC firms with lower PEP do too. A firm like FF or CC would be able to charge out a partner at c£1,300-£1,500+/hr and senior associates / counsel for c£1000/hr in their top practice areas (private equity, corporate). Comparable US firms - Weil, K&E, STB - wouldn't be too far off. So the 'prestige' of those firms' practices are quite similar. And it shows: they land similar mandates and are in tough competition with each other. It would be a different story if we compared these rates to, say, Jones Day or Goodwin's corporate/PE practices (no offence). There is one caveat: you need to adjust for the discounts law firms give their clients (i.e. take the WACC, which represents the real rates charged post-discounts). The fact that these figures are usually confidential means PEP remains the gold standard. I have no idea what the billable rates are at K&E or Davis Polk, so it's all speculation, but I have a feeling Davis Polk has higher average rates.</blockquote>

Verification: Our company is called, "The Corporate ___ Academy". What is the missing word here?

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