Following up on our earlier discussions of what metric best delineates BigTex vs. MidTex, (Gross Revenue or Profits Per Partner or Revenue Per Lawyer), Tex Parte Blog injected a new contender into the fray: Profitability Index (PPP / RPL). PI measures “whether equity partners are taking home more or less than the average revenue brought into the firm.”

Below, I’ve compiled the numbers for all the BigTex and MidTex shops (in descending GR order) that are more than just single-city or single-practice outfits, or Texas satellites of BigLaw. The outliers (both high and low) for each metric are highlighted.

Laid bare

Despite the thoughtful comments of a poster over at Greedy Texas, I still adhere to the belief that BigTex is more a measure of overall size, and therefore, relative market dominance. While I can’t argue that Fulbright’s PPP, RPL, and PI indices put it much more solidly in line with most MidTex firms, I remain convinced that a firm that brings in some $300 million more than most MidTex shops can’t be labled as anything less than BigTex. I don’t think a credible argument can be made that a firm bringing in some $650 milion per year cannot provide an order of magnitude difference in capability than a firm with a third the business. Inefficient and relatively unprofitable perhaps, but Big nonetheless.

I think the best example of how, perhaps at least PI is not as instructive a measure of a firm’s relative market standing as is GR, is evidenced by comparing the PIs of Akin Gump and Kelly Hart, which on their face, are not terribly disparate (1.41 v. 1.25). However, if you look at their respective GRs, Akin Gump brought in $700 million more than did Kelly Hart during FY 2007.

Thx to Tex Parte Blog