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Message: <blockquote data-quote="Andrei Radu" data-source="post: 218277" data-attributes="member: 36777">This type of information can be useful for a variety of purposes in terms of assessing a firm's general business prospects, the quality of its practice and work, and the kind of work and responsibilities you may have at the firm. To take revenue per lawyer (RPL) firstly: this is seen by Law.com (a leading legal press outlet) as the strongest indicator of a firm's financial health, as it cannot be "gamed" to the same extent as other metrics such as PEP (where firms can restrict equity ranks to boost the headline figure). The reason is that that seeing how much a firm's lawyer generates in income is an indicator of both:<ul> <li data-xf-list-type="ul">How in demand the firm is in terms of the number of mandates it works on: to have a high RPL, almost all of the firm's lawyers will have to be kept reasonably busy throughout the year (as the lawyers that are not busy do not generate significant income and thus bring down the average RPL).</li> <li data-xf-list-type="ul">How in demand the firm is in terms of the quality of mandates it works on: to have a high RPL, a firm needs to bill clients high fees for the time their lawyers work on a matter. While RPL can be boosted by keeping lawyers very busy on a high-volume approach, as suggested above, there is a limit to this: at the high-end of commercial law, targets for billable hours converge around 2000 per year. While at some firms (such as Kirkland & Ellis) partners are known to ask associates to go beyond this and hit 2100-2300 at times, it is very rare for people to go beyond this, simply because there is a limit as to how much one can work in a year without burning out. Thus, there is a limit as to how much RPL can be boosted by increasing workload, and this is where the second factor of the equation - billing rates - comes into play (you can helpfully think of RPL as equaling average time spent billing in a year times  the billing rates). The more prestigious a firm is, and the more in demand its practitioners, the higher will the firm be able to bill its clients. Normally, clients will only accept the high fees asked by firms like Davis Polk on high-value and highly-complex matters where their expertise is necessary; which means that a high RPL is indicative of a high-quality of mandates you may get to work on. </li> </ul>For department headcount, I would say the main points of relevance are <ol> <li data-xf-list-type="ol">To see how the firm positions itself in the market - i.e. is it more of a boutique or a big shop in that practice area specifically (rather than in general as a firm); </li> <li data-xf-list-type="ol">To see how much in focus a practice area is in a firm (this is where you would look at comparative headcount between departments); and </li> <li data-xf-list-type="ol">To see if a firm punches above/bellow its "weight class": if a firm has comparatively fewer people in a department but still achieves the same rankings and works on the same types of matters as larger rivals, it is an indicator of a higher quality/more efficient practice in that it achieves the same results with a lower input. Furthermore, it is arguably indicative of a higher-quality of practitioners, as lawyers at this smaller department will need to juggle the responsibilities normally shared by many more people at a larger shop.</li> </ol></blockquote>

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