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Profit Per Equity Partner Calculator | Law Firm PPEP Tool
Calculate profit per equity partner using firm revenue, expenses, and partner count to benchmark profitability against Am Law data.
Profit Per Equity Partner (PPEP)
--Updates as you change inputs. Estimate only, not legal advice.
Profit per equity partner (PPEP) is the single most-watched profitability metric in the legal industry, used by the American Lawyer to rank the Am Law 100 and 200 and by lateral candidates evaluating firms. It measures how much of a firm's net operating income flows to each equity partner.
The formula is straightforward: total firm revenue minus total operating expenses, divided by the number of equity partners. Non-equity partners, income partners, and of counsel are excluded from the denominator because they do not share in firm profits.
This calculator gives you an immediate PPEP figure so you can benchmark against industry data, model the impact of adding or removing equity partners, or stress-test partnership compensation decisions.
Why use itBuilt for the way law firms actually work
Am Law Methodology
Uses the same PPEP formula the American Lawyer applies when ranking the Am Law 100 and 200.
Partnership Modeling
Test the impact of promoting a senior associate to equity or de-equitizing an underperformer.
Lateral Recruiting Insight
Estimate a target firm's PPEP from public revenue data to vet lateral partner opportunities.
Instant Results
Enter three numbers and get a calculated profit per equity partner figure in real time.
100% Free
No paywall, no trial, no credit card required to run unlimited PPEP scenarios.
No Signup Required
Run the calculator anonymously without creating an account or sharing firm financials with us.
ProcessHow it works
- 01 Enter Annual Gross Revenue
Input your firm's total collected fees and other operating revenue for the fiscal year.
- 02 Enter Operating Expenses
Include salaries, rent, technology, insurance, and all costs excluding equity partner distributions.
- 03 Enter Equity Partner Count
Count only true equity partners with capital accounts, excluding non-equity, income, and of counsel.
- 04 Review Calculated PPEP
The tool divides net operating income by equity partners to produce your profit per equity partner figure.
- 05 Benchmark Against Industry
Compare your result to Am Law 100, Am Law 200, or regional firm averages for context.
CoverageWhat's included
- PPEP calculation using Am Law methodology
- Net operating income derivation from revenue and expenses
- Real-time recalculation as you adjust inputs
- Support for modeling equity tier changes
- Currency-formatted output for clean reporting
- Clear definition of who counts as an equity partner
- Guidance on excluding partner distributions from expenses
ContextWhy this matters
Profit per equity partner is the legal industry's headline profitability metric. The American Lawyer's annual Am Law 100 survey reports PPEP for every firm on the list, and in 2023 average PPEP across the Am Law 100 crossed $2.4 million for the first time, with elite firms like Kirkland and Wachtell reporting figures north of $7 million.
For partners, PPEP drives compensation expectations, lateral recruiting offers, and merger negotiations. A firm with declining PPEP loses partners to higher-paying competitors, while a firm with growing PPEP can attract rainmakers and command premium rates.
For managing partners, PPEP is the cleanest signal of whether the firm's business model is working. Two firms with identical revenue can have radically different PPEP based on leverage ratio, realization rates, and overhead discipline. Modeling PPEP before making partnership decisions, such as promoting associates to equity or expanding into a new practice area, protects the partnership's economic interest.
Q&AFrequently asked
- Profit per equity partner, or PPEP, measures the average annual profit distributed to each equity partner at a law firm. It equals net operating income divided by the number of equity partners and is the standard profitability benchmark used by the American Lawyer's Am Law rankings.
- Yes, the calculator is completely free with no signup, account creation, or payment required. You can run unlimited scenarios anonymously.
- Equity partners are those with a capital account in the firm who share in profits and losses. Non-equity partners, income partners, of counsel, and senior associates with partner titles but fixed salaries should be excluded from the count.
- Include all operating costs: associate and staff salaries, rent, technology, insurance, marketing, and professional development. Do not include equity partner draws or distributions, since those come out of profit, not expenses.
- Revenue per lawyer (RPL) divides gross revenue by total attorneys and measures top-line productivity. PPEP measures profitability flowing to equity owners. A firm can have high RPL and low PPEP if it has high expenses or a low-leverage partnership structure.
- It depends on firm size and market. Am Law 100 firms averaged over $2.4 million in 2023, while regional mid-size firms often range from $400,000 to $900,000. Boutique litigation firms can exceed Am Law averages with smaller headcounts.
- PPEP is a starting point, not a final answer. Actual partner compensation depends on origination credits, working attorney hours, management roles, and the firm's compensation system. Consult your firm's compensation committee and accountants before relying on PPEP for distributions.
- No. This tool is for benchmarking and modeling only. It does not replace professional accounting, tax, or legal advice and should not be used as the basis for tax filings or audited financial reporting.