ALMResearchBlog

Laterals: The Ones That Get Away

In contrast to the recruiting of inexperienced law students, few firms work as hard to develop a system for recruiting lateral talent, according to a recent article in National Law Journal. (See also commentary by Bob Ambrogi on Legal Blog Watch.) Too often, poor communication, bureaucratic processes, disorganization and misinformation thwart even the best firms' efforts. Stacey Humphries offers a compilation of anecdotes drawn from actual incidents as a 10-step how-not-to guide on lateral recruiting.

For data about successful lateral partner moves, the ALM Research Store  offers a compilation of information that includes names of partners and their practice specialty, the organization moved to and from, and the date of the move. The 2008 Lateral Partner Moves spreadsheet is updated monthly and non-subscribers who purchase the spreadsheet receive a link for the monthly update. Historical data is available also for 2000 to 2007.

First (Annual?) “Transatlantic Elite”

Thanks to Adam Smith, Esq. for calling our attention to a new law firm list, the "Transatlantic Elite,", published by London-based The Lawyer May 14. As Smith (aka Bruce MacEwen) note, this is not a financial or numeric ranking, but a first attempt to analyze the most high-profile legal market in the world, that of transatlantic providers of absolutely top-end legal services. The criteria include finances, client lists, deal tables and rankings, and talent.

The “Sweet Sixteen” who anchor the “Elite” include Allen & Overy, Cleary Gottlieb, Clifford Chance, Cravath, Davis Polk, Debevoise, Freshfields, Kirkland & Ellis, Latham & Watkins, Linklaters, Simpson Thacher, Skadden, Slaughter and May, Sullivan & Cromwell, Wachtell, and Weil Gotshal.

Additional sections in the report include ten who will shape the market, the M&A Elite, Finance Kings, the battle for Asia and the Mideast, and four firms that missed out (Herbert Smith, Jones Day, Orrick, and Shearman & Sterling.)

Survey: Firms Improve Diversity Efforts In Response to GC Pressure

A new survey from Altman Weil, and reported in the Daily Report says that under increasing pressure from general counsel to diversify their personnel, law firms are making some progress. Altman Weil canvassed the firms in the The Am Law 200. Of the 80 respondents, 58% have a designated diversity manager or director, up 8 percentage points from 2007 and 13 percentage points from 2005, the first year the survey was conducted. Also, the survey found that 100% of participants report having a diversity committee in their firm, up from 96% from the previous year. One area of concern, according Altman Weil, is that those diversity directors are increasingly not full time on the job but often are practicing attorneys with billable-hour requirements. The number of diversity managers who work full time in the position is down from 61% in 2007 to 53% in 2008.

How diverse are these biglaw firms? See the recently published Diversity Scorecard, available in searchable spreadsheet form from ALM Research Online for the years 2001 through 2008. Data from previous years (starting in 1984) is available to subscribers only.

Law Firm GCs Earning More—But Is The Position Here To Stay?

These two stories made an interesting juxtaposition, as they appeared within days of each other. On the one hand, we learned that Law Firm GCs Are Earning More. The report of an Altman Weil survey appeared in Legal Times and noted that general counsel at top law firms have seen a significant pay hike over the last year, with the average full-time general counsel at Am Law 200 law firms earning more than $750,000 in 2007. Those lawyers who worked in the law firm GC role part-time saw a 9 percent increase from 2006, raising their compensation to about $665,000 a year. Altman Weil also found that 85% of responding firms have a designated general counsel, the same percentage as in 2006.

And then came this story from The American Lawyer: Shearman Eliminates General Counsel Post. Shearman & Sterling, ranked 19^th in this year’s Am Law 100, has eliminated the job of its full-time general counsel, John Shutkin, in 2004 from KPMG International, where he had been general counsel for five years. Shutkin was one of the few law firm GCs brought in from outside the law firm world, part of a wave of hirings of in-house lawyers at that time. Though a Shearman spokesperson was quoted as saying they were “restructuring” and “returning to the more traditional structure of partner oversight over risk management,” the article also noted that the move seemed to go against the grain of the business model most large firms had adopted.

50 Under 45 in IP Law

The current issue of IP Law & Business includes their spotlight on “50 Under 45”, a “dynamic portrait of today’s intellectual property world.”  The lawyers included range from “an appellate guru to an anti-counterfeiting strategist,” and “combine raw brain power with hard work, canny legal skills and a talent for being in the right place at the right time,” according to the report.

Legal Week Wins Top Magazine Award

Or, as our new sibling magazine in London touts about themselves,” Legal Week wins top magazine award—again.” The award won was Weekly Business Magazine of the Year in the 2008 PPA Awards. PPA is the association for publishers and providers of consumer, customer and business media in the U.K. The magazine was praised for its “agenda-setting coverage”, a “ground-breaking redesign” and the title’s success at building a “vibrant online community”.

Survey: Managing Partners’ Gloomy Outlook

As the BLT (Blog of the Legal Times) notes, it is no surprise that the 2008 first quarter Managing Partner Confidence Index, released this week by Citi Private Bank Law Firm Group, depicts a gloomy outlook on the economy’s impact on law firms. This is the fifth index released by Citi Private Bank, and it marks the first time that managing partners were, on average, more negative than positive in their responses. Dozens of U.S. managing partners participate in the survey, and this quarter, U.K. managing partners were also included for the first time.

We had posted previously on this blog results from  several managing partner surveys, including the last one from Citi Private Bank, The American Lawyer, and Legal Times. There appears to be a general consensus that a weak 2008 will bring fewer equity partner promotions, longer hours, and higher rates.

The Am Law 100: In the News

The Am Law 100, the legal industry's equivalent of the Fortune 500, was released yesterday and it seems everyone has lots to say about those numbers--available, by the way, through the ALM Research Online Store (free to subscribers; $275 for non-subscribers). First of all,The American Lawyer magazine has a variety of stories which look at the 100 from various angles, including:

• Lessons of The Am Law 100 (“The big firms just finished the best five-year economic run since we began keeping records.”);
• Behind the Numbers (“Am Law 100 firms all have high gross revenues, but when it comes to translating that money into payouts for equity partners, the similarities end. Average profits per partner among the firms vary widely, from a low of $410,000 at Littler Mendelson to a high of $4.945 million at Wachtell, Lipton, Rosen & Katz.”);
• The Sky’s the Limit (“Profits per partner of $20 million? Revenues of $23 billion? A business school professor offers startling projections for the Am Law 100 of 2025”); and
• Trouble at Heller Ehrman (“Heller Ehrman has suffered a relentless plague of partner defections. Can management end the pain?”).

And now other media have begun to weigh in:

• 2007 Was a Year to Feast, but Is It a Prelude to Famine? On Law.com's Legal Blog Watch (“2007 was a banner year for the nation's top law firms according to the much anticipated American Lawyer 2008 Am Law 100 Report, which hit the streets today.”);
• Is the Golden Age of Growth Over? On the Wall St. Journal Law Blog (“For a lot of law-firm managing-partner types, today is a big day, as the AmLaw 100 hits their in-boxes. The AmLaw 100, or the American Lawyer magazine’s annual list of the top-grossing law firms for the year previous, represents not only a boatload of work for AmLaw staffers. For law firm heads, it’s a report card of sorts.”)
• How New York Firms Fared, from New York Lawyer (“Despite a looming recession, most of New York's top law firms reached new economic heights in 2007.”); and of course
• All Hail the Am Law 100! on the Above the Law Blog.

Just think-- we get to go through this again next month when the second half of The Am Law 200 is published!

Just Released: The Am Law 100

The 2008 Am Law 100 spreadsheet and data are now available through ALM Research Online. As always, the sortable spreadsheet of America’s highest-grossing law firms contains even more than what you see in print. All the data from the charts published in the May issue of The American Lawyer, as well as contact information for key marketing personnel at the firms.

Speaking of which—The American Lawyer’s main story accompanying the annual rankings asks: Is the Golden Age Over? with the lead-in “Big firms just finished the best five years since we began our records. Now, head count and salaries outpace revenue and rates.”  Click here for the story, as well as a number of charts showing changes over the years.

Laterals Not Common in Plaintiffs Firms

An interesting piece by The Legal Intelligencer notes that lateral movements are rather uncommon in the plaintiffs bar, though very common among defense attorneys. The story also mentions, however, that some law firm leaders said they lateral movement among plaintiffs attorneys do happen but go largely unnoticed by most of the legal community.

Checking our 2007 Lateral Partner Movements spreadsheet, we noted that there were 328 moves recorded among litigators last year. Unfortunately, our data doesn’t track information about which side of the bar these partners practice on, but those in the business might be able to see at a glance what the trends are.

Just Released: 2008 Diversity Scorecard

The new 2008 Diversity Scorecard spreadsheet is now available through the ALM Research Online Store. Based on the survey published every spring by the Minority Law Journal, Diversity Scorecard contains detailed information on minority legal staffing levels at law firms in NLJ 250 and Am Law 200 firms. This report also includes supplemental data not published by MLJ, including the number of women attorneys employed at these firms.

Key data points include: number of U.S. citizen attorneys; number of minority attorneys; specific figures for four major ethnic/racial groups ( African-American attorneys, Asian-American attorneys, and Hispanic-American attorneys); figures for other minority attorneys, including Native American and multiracial attorneys; breakdown by partner and non-partner attorneys; number of women attorneys. Note that the methodology for Diversity Scorecard was changed slightly this year. Firms were asked to count only their minority attorneys who are employed in U.S. offices. That number was then divided by the number of attorneys at the firm who are employed in the U.S. The result gives the percentage of a firm's U.S. attorneys who are members of ethnic minorities. Rankings are based on this percentage.

Diversity Scorecard data is available from ALM Research for the following years: 1985, 1986, 1989, 1991, 1993, 1997, 1999, 2002—2008.

AmLaw 100: Just Weeks Away

The 2008 Am Law 100 will be available May 1st. The report of the 100 highest-grossing law firms in the U.S. appears in the May issue of The American Lawyer, and simultaneously, the data and a spreadsheet product with the data will be available from ALM Research Online for subscribers.

Non-subscribers may order ahead of time through ALM Research and save $200 on the full Am Law 200 spreadsheet. Purchasers will receive a special discount code to use when purchasing the Am Law 200, which will be published and available June 1st.

Firm Financials: Report from Atlanta

Each year ALM Media’s Atlanta-based newspaper, the Fulton County Daily Report publishes a regional version of The Am Law 200, called the Daily Report Dozen —which seems to have expanded to 16 firms this year (listed below). The report focuses on the Atlanta-based office of firms, whether they are based in Georgia or elsewhere. Though one needs a subscription to see the full report—and here is a sample for King & Spalding if you follow the Daily Report’s Blog, you would have access to all reports.

Each report is rather attractively laid out, as well as informative, and includes financials, a short bio of the firm, number of lawyers, lateral hires and losses, significant transactional and litigation work during 2007, office locations and number of lawyers in each, significant clients, and occasional other interesting factoids.

• King & Spalding
• Alston & Bird
• Smith Grambrell
• Fisher Phillips
• Troutman Sanders
• Sutherland Asbill
• Kilpatrick Stockton
• Ogletree Deakins
• McKenna Long & Aldridge
• Womble Carlyle
• Powell Goldstein
• Morris, Manning
• Seyfarth Shaw
• Jones Day
• Hunton & Williams
• Paul Hastings

Just Released: 2008 Corporate Scorecard

The 2008 Corporate Scorecard report from The American Lawyer is now available in spreadsheet format online in the ALM Research Online store. This annual report details the performance of law firms with the most active corporate finance and capital markets practices. Firms are ranked on both the number and value of the deals handled in specific transactional areas, including Asset-Backed Securities, Bankruptcy, Equities, High-Yield Debt, Investment-Grade Debt, IPOs, Mergers & Acquisitions, Mortgage-Backed Securities, Municipal Bonds, Private Equity, Project Financing, REIT Debt, and REIT Equities. Contact information is also included for the Marketing Director of each firm listed in the report.

Big Lobbying Practices See a Billion-Dollar Year

D.C.-based newspaper Legal Times has published their annual report on the lobbying industry, including a ranking of the 50 highest-grossing lobbying practices in the U.S. The 2008 Influence 50 rankings show that some of the biggest players in the lobbying world raked in multimillion-dollar increases in fees from public relations, legislative activity monitoring, and grass-roots advocacy, according to Legal Times. The survey, which covers annual income from lobbying work for 2007, also reveals that law firms are continuing to outpace non-law lobbying firms in revenue. Overall, revenue among the Influence 50 was up 11 percent. Akin Gump Strauss Hauer & Feld is No. 1 on the list for the second consecutive year, with $89.8 million in lobbying income. Patton Boggs was a close runner-up, pulling down $89.3 million.

Financials: Four More Firms Report In

The news continues to dribble in about how fiscal year 2007 played out for U.S. This report from Legal Week reported that Debevoise & Plimpton unveiled “stellar” results, with partner profits and gross revenue climbing more than 20%; total revenue was reported to be $709.5 million.

Mayer Brown’s returns, at least outside the U.S., were not so rosy, according to this Legal Week report, with profits for the London and Brussels offices falling 8%. Gross revenue, on the other hand was solid; the two offices finished the year at £103.5 million (approximately $US 209.2 million).

Meanwhile, Reed Smith’s year was apparently very good, according to this report from The Recorder, and due to the firm’s “hiring spree” last year. Partner profits have surpassed $1 million and average revenue per lawyer is about $690,000, according to the report. Gross revenue for 2007? The report didn’t mention it, but based on these figures and their lawyer and partner head counts in the most recent NLJ 250 Survey, that would translate into just under $1 billion in revenue for 2007, though we’ll have to wait for this year’s Am Law 100 to find out for sure (May issue of The American Lawyer).

And “merger-seeking” Wolf Block has grown its revenue by 10%, according to a report by the Legal Intelligencer, to wind up the year at about $173 million. Profits per equity partner moved up at about the rate of inflation, 3.5%, to an average of $502,000 per equity partner.

Salaries and Compensation: Corporate Counsel

A new survey report in the March 2008 issue of Inside Counsel says that, “as starting salaries for law firm associates continue to skyrocket, law departments are hard-pressed to keep up.” Inside Counsel’s 2008 Comp Report uses Hildebrandt’s Law Dept. Survey and Altman Weil’s Law Dept. Compensation Benchmarking Survey to offer a sampling of compensation at in-house legal departments.

CLOs/GCs in departments with more than 25 attorneys earned $645,000 in median total cash compensation in 2007, though there seems to be a huge variance between public and private companies and NGOs. Extra incentives such as bonuses and stock options are an important element of in-house compensation packages, according to the report, and the percentage of total cash compensation that comes from bonus is greater the higher one is in the department. Though billed as a “sampling,” there is a lot of useful information in the report, which can be accessed by clicking here.

For those interested in more information about in-house compensation, ALM Research offers the 2007 GC Compensation Survey (as well as data for the same from 1993 – 2006), which includes the 100 highest-paid General Counsels at major corporations, rank in the Fortune 500, salary, bonus, and where applicable, other forms of remuneration for each of the GCs ranked.

Lateral Partners Moves

The 2007 Lateral Partners Moves is now complete, with the inclusion of information gathered in the annual American Lawyer Lateral Partner Moves Survey. The final report, with added information from legal industry reports and firm press releases, tracked 3,160 lateral partner moves in 2007 and includes the partner’s name, practice area, organization and location moved to and moved from, and the month of the move.

The 2008 Lateral Partners Moves is now being tracked and is available in searchable spreadsheet format also, and is updated once a month. The information is available free to subscribers, and for purchase by non-subscribers. Those who download the spreadsheet will be given a link to access the updated spreadsheet throughout the rest of the year. For more information, contact almresearch@alm.com or call 888-770-5647.

Is Your Law School a Firm Favorite?

We hadn't thought of putting it quite that way, but that's the question Joe Hodnicki asked on the Law Librarian Blog , when mentioning a recent addition to the ALM Research Store, the 2007 Law School Hiring Survey. The report is based on data collected in the 2007 NLJ 250 survey, and shows which firms recruited from which law schools, and how many were recruited. Also included are the numbers of associates promoted to partners, and which law schools those new partners had attended. Click on this link to see a sample of this spreadsheet product, which is available free to subscribers and for $250 to non-subscribers.

Law Firm Financials: More News About How FY 2007 Played Out

A picture of how the annual Am Law 200 list will play out is gradually beginning to emerge.   Legal Week reported this week that Dechert has unveiled double-digit increases in revenue ($836.3 million) and profits per equity partner ($2.35 million). Paul Weiss also saw healthy increases in 2007, according to the report, with revenue up almost 10% to $651 million, and profits per equity partner up 4% to $2.6 million. McDermott Will & Emery posted a 14% revenue increase to reach $978 million, and an 8% rise in profits per equity partner, which reached $1.52 million.

This Legal Week report says that Weil Gotshal & Manges has broken the $2 million barrier for partner profits in 2007, as Manhattan rival Milbank Tweed Hadley & McCloy becomes the latest U.S. firm to post double-digit increases in both revenue and profit. Profits per equity partner at Weil Gotshal improved by 11% to reach $2.11 million, while revenue increased by 12% to $1.175 billion. Milbank, meanwhile, recorded an 18.8% surge in global fee income, LW reported, to finish the year with  $642.5 million, while profits per equity partner rose by a similar amount, up 16.4% to $2.53 million.

In another Legal Week report, Baker Botts is said to have also posted strong financials for 2007, with an increase in revenues of almost 15% ($502.7 million), and an impressive 18.6% increase in profits per equity partner. And in yet another LW report, King & Spalding was reported to have increased both revenue and partner profits by 6%, with $615.3 million in revenue and $1.31 million in profits per equity partner for the year 2007.

And, below the radar of The Am Law 200 are all the other firms on the planet. This report in the Legal Intelligencer focuses on how midsize firms in Pennsylvania fared last year. LI said that many of these firms saw increases in revenue, staffing and clientele that either met or exceeded their expectations. Firms included in the report are: Dilworth Paxson, Hartman Underhill & Brubaker, Kaplin Stewart Meloff Reiter & Stein, McNees Wallace & Nurick, Meyer, Unkovic & Scott, Tucker Arensberg, and Woodcock Washburn.

Firm Financials: Latham Could Surpass Skadden as Top-Grossing Firm

That was the situation posed by The Recorder in reporting Latham & Watkins’s year-end financials recently. The San Francisco-based newspaper said that Latham posted 2007 revenues of just over $2 billion, which was a “whopping” 23% over their previous year’s results. Could the Los Angeles-based firm move into number one place in this year’s Am Law 100? The Recorder says yes—IF Skadden posts anything short of a solid financial year. To stay on top, Skadden, which has not yet reported revenues, will need to show an increase of at least 8% from 2006 – “very likely, given its recent history, but not guaranteed,” the report said. Latham also reported $2.2 million profits per partner, which was “a similarly massive year-over-year increase.”

Other firm financials mentioned in The Recorder’s February 8th report included Gibson, Dunn & Crutcher, (grew revenue 12%, to $908 million); O'Melveny & Myers, (3% growth in RPL; PPP flat, at $1.64 million); Sheppard, Mullin, Richter & Hampton (RPL climbed 12%, to $800,000; PPP up 19% to $1.2 million); Irell & Manella (double-digit gains in revenue and RPL, to $227 million and $1.2 million, respectively; PPP up to $1.9 million); Munger, Tolles & Olson (double-digit increase in revenues and RPL, to $227 million and $1.2 million; PPP climbed to $1.3 million); Luce, Forward, Hamilton & Scripps (grew revenue 6% to $110.5 million; RPL nearly flat at $610,000; PPP up nearly 7%, to $605,0000); Manatt, Phelps & Phillips (revenues climbed 14% to $242 million; modest RPL growth of 5%; PPP up 14% to $1.25 million); Quinn Emanuel Urquhart Oliver & Hedges (a “stunning” 29% increase in revenues to $384.5 million; $3.01 million in PPP; RPL growth more modest, with a 7% increase to $1.09 million).

Lateral Partner Movement in 2007

The 2007 Lateral Partner Moves spreadsheet product in the ALM Research Store now includes the data from The American Lawyer’s report in its current issue (February 2008) of lateral partner moves in 2007 among Am Law 200 firm. Firms that gained the most—55 or more new lateral partners last year—include Greenberg Traurig, McDermott Will & Emery, Hunton & Williams, and Littler Mendelson. Firms that lost the most lateral partners—40 or more—include Mayer Brown, Reed Smith, and K&L Gates.

The ALM Research data includes—besides American Lawyer’s reported lateral partner moves—moves reported in other legal industry publications, those noted on firms’ Web sites, and lateral partner moves publicized in press releases. Besides including information about Am Law 200 firm partner moves, the ALM Research data includes lateral partner moves in and out of NLJ 250 and Global 100 firms. For more information about this product and the data included, click here or send an email to ALM Research.

Financials: Mixed 2007 Year-End Figures from BigLaw Firms

There have been a rash of reports lately as the year-end revenue and profit figures from the big law firms reveal what happened to them in 2007. Dorsey & Whitney, for instance, has reported an astounding 30% increase in profits, according to this report in Legal Week.

In no particular order: McDermott, Will & Emery posted an 8% rise in profits, according to this report in Legal Week, while Paul, Weiss saw a “modest” increase in profits (4%), according to this report.  This report in Legal Week said that year-end financials for the London offices of  White & Case and Weil, Gotshal & Manges were “sterling,” with W&C reporting a 37% increase in revenue, or “turnover,” and WGM almost doubling profits. And this report on NewYorkLawyer.com said that WilmerHale’s 9% gain in profits were due to modest hiring and practice diversification.

Cadwalader didn’t do so well, reporting a 6% drop in profits, according to this report. And Greenberg Traurig, according to this report, planned to freeze some salaries because of a $10 million shortfall on year-end collections. However, the Florida-based firm still predicted double-digit growth in revenue for 2007.

LTN Awards Presented at Legal Tech

As reported by Monica Bay on her Common Scold Blog, Law Technology News held its fifth annual awards program February 6th during Legal Tech in New York, and announced the winners of the LTN awards. In the Vendor category, LexisNexis took four awards and CT Summation took three. The Law Firm and Legal Department award winners included John Sroka of Duane Morris, IT Director of the Year, and Goodwin Procter's iStaff system, for Most Innovative Use of Technology by a Law Firm.

Recruitment Trends in 2008

As reported recently in the Atlanta-based newspaper, The Daily Report, law firm hiring trends in 2008 are predicted to see some changes. One trend is that the high cost of summer associate programs is causing some firms to reconsider their options, whether going with smaller summer associate classes, or dropping the practice altogether in favor of lateral hires. Firms are taking a hard look at how they compensate their lawyers; many are tieing bonuses more directly to billed hours, others are adopting a two-tier associate system, with one tier for associates more concerned with a work-life balance. Another trend—perhaps in response to clients’ unhappiness with associate salary raises in 2007—is the reduction or abolishment of billable hours requirements for associates.

Law Firm Leaders’ Outlook for 2008: Three Versions

As reported recently in The Recorder, managing partners nationwide expect a weak 2008 to bring fewer equity partner promotions, longer hours and higher rates, according to a new survey published by Citi Private Bank, which found that the overall confidence fell nearly 20% in 2007, dropping by larger amounts each quarter.

Citibank’s survey results echo the findings of The American Lawyer’s annual Law Firm Leaders Survey Report, published in the December issue, which described the mood among managing partners and firm CEOs as “nervous” and “uncertain.”

Meanwhile, blog of the DC-based newspaper Legal Times, the BLT, hosted a panel of firm managing partners for a business forecast panel and reported that, despite the downturn in the economy, the discussion wasn’t all doom and gloom. “Though the partners agreed that certain practices will likely feel somewhat of a squeeze this year, they were confident that other areas, such as litigation, will have enough work to sustain their firms,” BLT said.

Reed Smith Revenues Grew 38.5%, May Be Looking to Merge Again

According to this report in the Legal Intelligencer, “Reed Smith increased gross revenue in 2007 by 38.5%, due largely to its completion of two mergers that gave the firm about 400 more attorneys.” In 2007, the firm merged—acquired—both London’s Richards Butler and Chicago’s Sachnoff & Weaver. There is speculation, according to LI, that Reed Smith is looking to merge with a New York-based firm, in particular, Anderson Kill.

Those interested in additional financial information about these and other firms should reference the 2007 Am Law 200 and the 2007 Global 100. For both of these annual surveys/rankings, data for previous years is available to subscribers.