PPP is falling, just like the Dow.

informal poll: in favor of outsourcing? Yes or No

500 positions to Manila? Walang Hiya.

"Baker & McKenzie's growth hasn't been limited to it's Philippines outsourcing outpost. "

Its, not it's. Thanks.

I am going to make a golf comparison here. Tiger Woods represents what is wrong with American educated attorneys. They are both overconfident, full of false bravado, overpaid and overrated. YE Yang represents what is great about a foreign based attorney that can be employed via outsourcing. Both are humble, do not fold under pressure and are happy with modest earnings. Peer firms should start investing in hiring legal talent from India and the Philippines. I guarantee this move will restore PPP to the levels we were accustomed to pre-Obama.

Tiger Woods is a lot of things. Overrated is not one of them.

PE = fail.

TOP 10!

PE,
I enjoyed listening to your rendition of "Rockin Robin" during karaoke night at Rick's Cabaret. You are multidimensional and a true mensch.

Partner Emeritus is a barnacle on his firm's ship of profits. They should toss him overboard.

All things considered, the small decline in revenue is pretty good considering their massive four year historical growth and an otherwise bad year for almost all industries. The PPP hit is not great, but lets be real -- those are still "profits" and not bad ones at that.

I'm not affiliated with the firm.

This comment is addressed to post nos. 7 and 10.

To 7: I acknowledge that Tiger Woods is a phenomenal golf player. However, he is not at the level of Michael Jordan or Roger Federer. I have never seen Michael Jordan or Roger Federer fold under pressure like Tiger Woods did on the 18th hole at the PGA Championship yesterday. It is easy to root for Tiger Woods; however, rooting against him yesterday earned me $1,000 in a friendly wager.

To 10: You do realize if it weren't for pioneers like myself, there would be no ship of profits to begin with.

ParTTTner EmeriTTTus.

This comment is addressed to the doddering old fool that is 12:

Yeah, great. What have you done for the firm lately? Sayonara, barnacle.

10

PE - You have never seen Roger Federer fold under pressure? I seem to recall him doing just that at Wimbledon in 2008, and he did the same at the 2009 Australian Open. After crumbling at the Australian Open, he then proceeded to cry like a little girl.

I wonder if this news will result in Baker & McKenzie falling to 34 on the incorrect Vault rankings.

Maybe outsourcing (and the resultant lack of quality) is why their PPP is going down.

I agree with 11. If they have been having double-digit growth over the past four years, a 3% drop in revenues during the worst recession since the Great Depression is really not that terrible in the long run. Partners can probably ride out these down years on their nearly a $million draw until revenues go back up again.

I'm not sure why a document processing center in the Philippines signals that the firm is planning to outsource much of its legal work.

PE, you're a tool, and you're obviously a sports poser as well. Jordan, Woods, and Federer are all giants in their respective sports. But everybody loses sometimes.

Ex A: Nadal / Federer 2008 Wimbledon final.
Ex B: 1995: Jordan stripped of the ball in Game 1 and Bulls lose to the Magic in the EC semis.

I wonder what Susan Dey has to say about this.

When Biglaw partners figure out that they can outsource pretty much every function which does not require a court appearance, an awful lot of you pompous, arrogant bastards at "prestigious" firms are going to find yourselves in serious trouble.

Globalization doesn't care about your grades or LSAT score. If the partners can get the same work done more cheaply elsewhere, you're sunk.

19

I think you missed PE's point, it wasn't the losing that he was discussing, but the complete meltdown (the way the loss came about) that he was talking about.

-didn't have YE in the pool

All the associates that got laid off or took a 10% pay cut will be happy to hear that PPP only dropped by 3%.

This comment is addressed to post no. 15.

Roger Federer and Tiger Woods are on different levels. Roger Federer has more slam titles than any tennis player that ever lived. Woods cannot say the same about golf. Federer lost the games you mentioned. However, in both games he played hurt and the final score was more competitive than Tiger's meltdown at the 18th hole yesterday. Moreover, Federer showed more grace in defeat than Tiger did. Tiger didn't even want to shake Yang's hand which represents poor American sportmanlike conduct. Tiger's legacy will be tarnished by his bitterness and poor performance at the 18th hole yesterday. Jack Nicklaus is the best golf player that ever lived period. Jack played in an era that contained multiple golf legends and the field was much more richer and more talented than the one in which Tiger Woods plays in. Had Tiger played in Nicklaus's era, he would maybe have a handful of titiles. At this point, I would consider someone like Gary Player to be a better golfer than Tiger Woods.

23, did you notice that PPP actually went down by 17%? Thus eviscerating your whole point?

PE - The argument you are participating in is truly below you.

PE, I think you meant "poor sportsmanship." Clearly you have never played a sport.

This comment is directed to No. 24.

Your post is more richer that the last ones - I laughed harder. To compare a tennis career to a golf career is silly. Professional male tennis players perform at their peak for perhaps ten years. Professional golfers can play at a high level for 25 years. To compare Tiger's standing in the annals of golf to Federer's in tennis is ridiculous. Tiger is 32 (33?) years old, and will continue to play competitive golf for at least 15 years. If he continues at his current pace, we will destroy the records for total wins and major wins. Once all is said and done, Tiger will be more accomplished in golf then Federer is in tennis. Then again you'll be dead by then - either that or you'll be a fourth year associate. man.

Rev dropped by 3%. PPP dropped by 17%.

Someday maybe certain support staff functions will be fully outsourceable, but its really hard for me to imagine my associate job being outsourced soon.

Ya, I'm actually an associate and not a law student from autoadmit.com. Some of us still do read this board.

Not that my job is anything difficult, but there just seem to be (a) too many liability issues for the partners at stake (b) outsourced talent so far lacks the mastery of the english language required, even for non diligence/doc review work (c) time pressure and time issues are a significant factor and (d) its not clear what benefit outsourcing could have because the clients would quickly demand cost savings passed on, resulting in lower billing rates and relatively equal profitability for higher risk.

My .02

PE,
I trust that you will apply your $1,000 gambling win to your delinquent Discover Card balance. That should clear up some of the late fees.

PE

Sportsmanlike.

Now go away you troll

This comment is addressed to post nos. 27 and 31.

I can wager that there is a bright attorney from India or the Philippines that would have edited my mistake for less than minimum wage. Good luck making a meager living on your editing skills.

PE:

How did the court hearing on Martha's Vineyard go? If it was reduced to a fine, you can put the $1,000 that you won to the court fees and fines.

Next time, if you have to frolic in the nude, go to Aquinnah and not Chilmark. And don't get caught with another man's wang in your mouth.

PE: My wife and I are considering an Afghan hound as a pet. We spend most weekends on the Cape, and I am concerned that the pup may find the salty air disagreeable. Is this concern unwarranted?

I'm curious to know how profits only fell by 3% yet PPP fell by 17%. Earnings releases for public companies have shown profits that beat estimates, but revenues that either were in-line or below. Obviously, the reason is that companies have cut costs, which is the smart thing to do in a recessionary environment. So, I just wonder what Bakers did to have such a large discrepancy. Did they increase costs? That wouldn't make sense in a recession. If anyone has insight, please share.

Dear ABA (American Biglaw Association):

Please find enclosed a literal expression of what you’ve done to our industry. Despite the massive saturation and glut of unemployed lawyers, you insist upon accrediting every tax-dodging hack who operates a law school out of his garage. The cruel reality that few of these students will ever find paying work as lawyers is; to paraphrase Hamlet, “not dreamt of in your philosophy.” Furthermore, via ABA ethics opinion 08-451, you have green-lighted and endorsed the outsourcing of domestic legal work to unlicensed, unregulated Third World boiler rooms staffed by non-lawyers. This is not only patently unacceptable, but the utter height of hypocrisy. American law students are compelled to committ massive investments of time, study, and treasure before earning the title “Attorney at Law,” a title you have lately rendered essentially worthless. You endorse sadistic and pointless hazing rituals like the Multistate Bar Exam (written by your well-paid pals at the National Conference of Bar Examiners), promulgate arbitrarily applied ethics rules that routinely screw over solos and small firms while letting Biglaw off scott free, and waste massive amounts of energy on elitist, far-left wing moonbat crusades like closing down Gitmo. Many of us outside Biglaw correctly assume that you care more about the “rights” of terrorists than the struggling young members of your own industry. The low paying document review jobs you so cavalierly outsource are to many recent grads the only bulwark between themselves and starvation.

Where were you when law school tuition rose at 3 times the rate of inflation? How do you justify forcing American lawyers to pay bar dues, CLE fees, take the MPRE, report trust account information, submit to invasive background checks and so on yet allow (and encourage) huge Biglaw firms to reap massive profits by using offshore “lawyers” who have had to endure none of these onerous prerequisites? How do you endorse (and in fact, require!) an education model that renders recent graduates experts on the common law of 16th century England but wholly unprepared to litigate a client’s simple fender bender case here in good old 2009? It is nothing short of pedagogic malpractice, and given the soaring cost of tuition it is simply unconscionable. In the eyes of many lawyers, you have lost all creditability and clearly sold the working-class attorney down the river to further enrich your elitist brethren at large firms and your Ivy-league, ivory tower law professors.

Note that I routinely use the word “industry” as opposed to “profession” when describing the practice of law. You, the ABA, have done more than anyone to justify that semantic distinction. You trashed the time-honored apprenticeship system that produced lawyers like Webster, Lincoln, and Darrow and replaced it with the current diploma-mill model that provides cushy jobs to your cronies and crushing debt to new lawyers. Sharecroppers in the Antebellum South received a greater share of the profits than most contract attorneys do from the large firms you so zealously champion, and enjoyed better working conditions. And thanks to the glut of lawyers that your “accredited” law schools have produced, small firms are constantly setting new floors for entry-level salaries. Recent grads are sending out bales of resumes to dead silence, as if trying to sell saltwater on a lifeboat. There aren’t any takers.

And, pray tell, why would there be? Not many small firms are specialists in the Rule Against Perpetuities or the nuances of UCC 2-207 or any of the other comical obscurities and exceptions that your accredited system of “education” so myopically focuses upon. Rather than stress (and teach) the practical nuts n’ bolts of everyday practice, you reward schools who compile massive libraries of cobwebbed, outdated and irrelevant minutiae and exalt “professors” whose only courtroom experience is watching Boston Legal reruns on their DVR’s. If medical schools operated under your antiquated rubric, we’d still treat staph infections with bloodletting and pneumonia with mustard plasters. You’re like an army of bows and arrows in the era of gunpowder. It’s long past time for structural change.

Young lawyers are paying a dear price for the disaster that you’ve sown. Like the Joads in The Grapes of Wrath, many young barristers lead an impoverished, transient life, flocking from one document review project to the next while hoping to stay a paycheck ahead of the loan sharks at Sallie Mae. Some try to cut their teeth in the gutter of insurance defense “practice,” cutting and pasting reams of boilerplate dreck for less money than a day laborer on a landscape crew. The temp agency pimps and their masters in Biglaw routinely lie about pay and hours, treat their fellow attorneys like expendable pieces of garbage, and routinely engage in behavior that violates not only your Rules of Professional Responsibility but also our basic human dignity. You remain deathly silent at the widespread “chill and bill” tactics of Biglaw and the outsourcing of independent legal judgment to unlicensed third world slumdogs, yet are quick to string up some starving solo attorney who dare sends a paralegal to cover a routine court appearance in a trip n’ slip case.

For all your insincere grandstanding and hot air, the legal industry has never been held in lower regard by the public, and the recent spate of chiseling crooks (see Dreier, Marc and Weiss, Mel) illustrate the shamelessness & moral bankruptcy that infects even those at the zenith of this business.

Young lawyers and solos aren’t leaving the ABA: the ABA is leaving them. Do you really expect us to sacrifice a portion of our already pathetic paychecks so that you can devise new ways to insure our perpetual serfdom? Gentlemen, have you no shame?

Yours Truly,

Law is 4 Losers aka Skadden Farts

35 here: I meant revenues fell by 3%, my apologies for the typo.

35, because there's a difference between "law firm's 2008 profits/revenues" and "average of analysts' estimates of this year's profits/revenues."

36, it's a little ironic that you berate the ABA for accrediting TTT law schools, and then you bring up Marc Dreier (Harvard law) and Mel Weiss (NYU law).

Did someone say, dip?

"I put my hand upon your hip,
when I dip you dip we dip.
You put your hand upon my hip,
when you dip I dip we dip.
I put my hand upon your hip
when I dip you dip we dip.

You put yours, and I put mine...
...and we can get down low and roll it 'round!"

38: That's not answering the question. I was using public corporations simply as an analogy. They had higher profits and lower earnings because of cuts. Isn't that the way it should be in a recession? If you have similar revenue and lower profits, it means you're spending too much money.

36 and 39,
Leave Mel Weiss alone. The poor bastard had all his money invested with Madoff. Karma is a bitch.

New round of layoffs for Baker's California offices - you heard it here first.

I lied, profits per partner died.

I'm Barack Obama?

People (like #5) who sit around pointing out spelling mistakes in a blog post need to get a fucking life. Seriously.

Additional revenue is more likely than not profit. Thus, when Baker lost 3% of revenue, that amount will constitute a disproportionate amount of profit.

What has not been reported is how absurdly good these numbers are. Baker only lost three percent of revenue over last year? That's absolutely nothing. Even the profit number is good, considering that cost cutting measures only recently took effect (considering that severance packages probably covered most laid off employees until the end of the fiscal year). Too bad you can't buy stock in a law firm without becoming a partner... a firm that can manage Baker's scale and perform this well during a bad recession that is absolutely mauling its peers suggests this would be a good investment.

28: Golf is not a sport. Any sport where a major can almost be won by a 59 year old (e.g., Tom Watson), cannot be considered a sport. I don't see Mark Spitz competing with Michael Phelps, Julius Erving with LeBron James, or Bjorn Borg with Roger Federer.

I can hardly wait till one of these big firms who outsource get slapped with a huge malpractice verdict because of a screw-up within their outsourcing ranks. Maybe that will make the firms (and their clients) to rethink how good of an idea it is to outsource legal work.

Those in favor of legal outsourcing, realize that at some point this outsourcing craze needs to come to an end, or soon a college degree (and an advanced degree) will truly be worthless.

Considering that the fiscal year has covered the worst of the downturn (July 08 to June 09), these numbers are really not that bad. My sense is that other big firms on average have been hit harder than this during that time period.

wow 36! you must have had that post prepared. well done. i'm with you. and i love you.

Right on 49. My favorite moment will be when the biglaw partner is on the stand trying to explain how the client lost its case because a guy named Patel making $5 per day in some office park in Bangalore screwed up a document.

Tiger did not have a "meltdown" on 18 yesterday. PE, after reading your posts, it is pretty clear to me that you don't know much about golf.

Which is not surprising, as it's pretty clear you also don't know much about being a biglaw partner.

Enjoy the rest of your summer. 3L year starts in a couple of weeks!

PE = Fail

48/51, you're right, before the advent of legal outsourcing the big law firms never screwed up anything.

48,
It is getting out of hand. I know an illegal immigrant from Honduras who is encroaching on our turf. Pedro is an attendant at my club. He shines shoes, repairs golf clubs, and performs routine maintenance.

The other day he approached me about interpreting a facultative reinsurance treaty and structuring a leveraged buyout of a multibillion dollar chemical company. You see, he is moonlighting as a contract partner for Gibson Dunn's L.A. office.

He can barely speak English and is unable to write. But he works for $4.75 per hour and has amazing turnaround time. Very tough to compete with him on cost.

36- solid rant; just one tiny little point- sweatshop doc review (which I've done) is incomprehensibly better than pulling a crop out of the field in dementia inducing Southern heat (which I've also done).

Going to agree with 47. Sports are decided on the field/court of play (thereby disqualifying endeavors such as gymnastics, figure skating and diving) by athletes. When a man who is almost eligible for social security nearly wins your most prestigious championship, you lose the ability to call yourself a sport.

47 and 56 - see Chris Chelios, age 47, hockey player. Still playing with 18 year olds. Fact is old guys can play some sports. Plus the Tom Watson thing was a total fluke. The oldest major winner in modern history is still in his late 40's. If you don't think golf is a sport than you've never failed at it miserably as many times as i have.

57: Would you consider John Daly an athlete? That's proof positive you can be a fat slob and still succeed at golf. I'm sure you'll come up with the example of Cecil Fielder being out of shape yet still being able to play baseball...but for obvious reasons, you can't compare baseball to golf.

Btw, just because you've tried and failed at golf doesn't make it a sport. I can try and fail at poker a million times and it still won't be a sport.

You all that are debating whether golf is a "sport" are missing the point that PE is a douche.

PE is the biggest loser in the history of humankind. I honestly hope he dies at the hands of his angry, unemployed law school classmates.

58 - Cecil Fielder is a good example, so are many offensive and defensive linemen. What are these obvious reasons you speak of? If you've seen Tiger blast a 200 yard approach shot out of a down-hill lie in thick rough, it's hard to argue that there is not serious athleticism - and strength - involved. Not to mention the precise control that is required to swing a golf club at 100 mph and to shape shots fifty different ways. It may not be brute athletics, but it's still athletics.

You're right about poker, sort of - i fail miserably at that too, but not because I can't physically hold my cards up long enough to figure out what I have, it's because I start to giggle like a little girl every time I get dealt pocket bullets.

61: The "obvious reasons" for baseball being a sport and not golf? Try the fact that you need to actually hit a ball coming at you at 100 mph, as opposed to hitting a stationary ball...try the fact that you have to actually run once you hit the ball, or defensively, you need to field a ball coming at you quickly and make an accurate throw across the field. I'm not saying golf doesn't take skill, but that doesn't make it a sport on par with others.

Yay Lady Soto is back!

62 - Just because the type of athleticism involved is different, doesn't mean it's not a sport. Not to mention that mental focus, which is huge in golf, is a big part of many sports. Your point about hitting a ball moving at 100 mph is a good one. But I'd argue that it takes just as much hand-eye coordination, and control of the golf-club, to consistently hit a golf ball the way Tiger or any other elite golfer does - even if it is stationary. Now curling, that's not a sport, that's just an excuse to drink all afternoon.

How do female SUNY Buffalo law grads get New York Biglaw jobs?

Is it because they are hot?

Trying so hard to shed tear for Baker partners now forced to make less than a million.

#65. This is one of the great mysteries of our times. Nobody in my firm could figure out how she got the job.

36=Roxana

"If Baker partners are really feeling squeezed by the new numbers, they could always move to Manila. I hear from Lat that $992,000 goes a long way over there."

Glad to see ATL is trying to integrate law and economics by arguing that we should measure Profits Per Partner in terms of Purchasing Power Parity. If only we could do something about using the same abbreviations.

35, once you get the overhead covered, PPP rises rapidly. By the way, to paraphrase Warren Buffett, it's only when the PPP profit tide goes out that firms begin to see that the zombie partners have been gaming overhead attribution so that it looked as though they were contributing as much as they were taking out.

36, quite right. An education bubble has also burst and the legal education industry will never be the same. Now we just need some sort of Cash for Over-Educated Clunkers program. For each fungible graduate of Podunk U School of Agriculture, Phrenology and Law who went to law school because he was born without ambition and didn't know what else to do (other than, shudder, get a real job) who is hired by a law firm, the government would pay that firm $15,000. Makes as much sense as pulling the car demand forward. Too bad for model 2011 cars and 3Ls though.

What happened to the SA story?

This trend is inevitable. Eventually only the top 50-80 law school graduate will find employment in the US. All other law school graduates will find legal employment in India or some other country. I suspect this will lead to an eventual decline in the number of higher education establishments and wanker profs that don't do much in life.

PPP insight anyone?

What does it mean exactly that PPP were around 900k? Does this mean a B&M partner (one of the 720 equity) in NY makes as much as a partner in the Venezuela office?

I just don't understand how this works.

73
What is means is they took their profit ($714,240,000) and divided it by 720 to get to a PPP number.

Every partner does not make the same amount.

Increased costs of legal services, and legal outsourcing-friendly policy changes in key outsourcing destinations such as the US, has led the Indian LPO industry to a significant expansion point. With exponentially higher volumes of work at hand, the industry is looking at an estimated hiring of over 5000 law graduates in the current financial year alone.

...small LPO players in the country are finding the downturn to be a blessing in disguise due to huge amount of litigation work coming their way from the US.

Did anyone actually read the article? Baker isn't saying that they are outsourcing legal work. They are outsourcing document processing work to Manilla. Makes sense, especially considering you can send dictation or mark-ups down to Manilla when you leave your office to find them completed in your email inbox when you get back in the morning.

No. 21 above is absolutely correct. No attorney is safe from outsourcing. (Case in point: Rio Tinto's London lawyers were fired in favor of Indian law firm). All of us need to be united against outsourcing; if there's no solidarity among us, we'll all be on the bread line. And who are the idiots here disparaging or mocking doc reviewers or temp attorneys? They're just other forms of lawyering -- to pay the mortgage. It's just plain old dumb to suggest that outsourcing of these jobs is insignficant.