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What happens if law departments know the financials of a law firm?

Bruce McEwan’s thoughtful blawg, Adam Smith, Esq. describes Allen & Overy’s disclosure of its GAAP-compliant, full description of its financials – including partner compensation.

If such financial transparency gains a following, clients may appreciate it. Clients will have reliable data on which to assess some aspects of law firm performance. Then again, disclosing gross profit margins like A&O’s 36.7% may mean that honesty is punished when law departments seek discounts and savings from what they perceive as swollen profits.