This Week in Biglaw: 05.02.10

Ed. note: Law Shucks focuses on life in, and after, BigLaw, including by tracking layoffs, bonuses, and laterals. Above the Law is pleased to bring you this weekly column, which analyzes news at the world’s top law firms.

The big news in BigLaw this week was the release of the American Lawyer rankings.

League tables come and go, Vault rankings are for students – the AmLaw 100 is the de facto scorecard for BigLaw.

The trend we’ll be keeping an eye on is perhaps the beginning of a rift between elite and big:

[T]he top quintile of firms in PPP was the only segment of the market to show modest increases in both profits and RPL. This group includes New York’s 13-firm moneyed elite, plus such giants as Latham & Watkins, Kirkland & Ellis, and Gibson, Dunn & Crutcher, as well as smaller, pure litigation plays like Quinn Emanuel Urquhart & Sullivan and Boies, Schiller & Flexner.

There were a number of other themes in the reporting: “it could have been worse”; New York outperformed the rest of the country; and litigation was the place to be.*

* Sort of – Quinn Emanuel was #2 and Boies Schiller was #4 in the profits per partner rankings, but they also both had significant declines: -6.1% and -6%, respectively. Of the rest of the top 10, only Simpson Thacher (#8, -2.4%) and Cleary Gottlieb (#10, -0.6%) showed declines. Perhaps the high profitability is due to the firms’ leverage, rather than their practices. Boies Schiller has 240 lawyers, of which just 34 are equity partners. Compare that to #1 PPP firm Wachtell, which has almost the same number of lawyers, with 231, but more than twice as many equity partners, at 86.

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But that was last year. What’s been happening this week?

After the jump, we focus on the deals, suits, and other stories from BigLaw that made headlines this week.


Deals

For all its faults, there’s one thing BigLaw has cornered the market on: documenting the biggest deals. Some of the billion-dollar-plus (or otherwise interesting) deals from the past week:

  • Continental-United: $7 billion (give or take) merger of equals (bleh) with no premium (bleh). UAL: Cravath. Continental: Jones Day, Vinson & Elkins, Freshfields. Three against one, is that fair? Well, it is Cravath. Scott Barshay leads the team, branching out from his usual work for IBM.
  • PPL acquisition of E.ON’s US operations: $6.7 billion (plus $925 million in debt). PPL: Simpson Thacher, K&L Gates. E.ON: Sullivan & Cromwell.
  • Treasury selling its stake in Citi: We called TARP the Gift That Keeps on Giving, because the firms involved (Davis Polk, Cleary Gottlieb, Simpson Thacher) got paid coming and going (although Simpson did do the work at a pretty steep discount out of a sense of civic duty, apparently).

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Suits

The tech story of the week was the raid on a blogger’s home to recover a stolen/lost/misappropriated iPhone. The best part is that the whole thing may have been kicked off by a tattletale in BigLaw. An O’Melveny & Myers lawyer reportedly filed the complaint that the phone had been stolen. No idea what the firm’s connection was yet. One BigLaw firm we do know is involved is Davis Wright Tremaine, which is representing Gizmodo, the blog at the center of the storm.

Actually, that wasn’t the only snitching. Oliver Budde, who was at Skadden a long time ago and more recently a former associate general counsel at Lehman, dropped a dime on former Lehman CEO Dick Fuld. Budde claims Fuld understated his comp by $200 million. To add more BigLaw to the mix, Simpson Thacher supposedly vetted the disclosure.

At the other end of the spectrum, Kelley Drye got in trouble for not talking enough. Or at least not telling that they had inadvertently received a confidential client communication from opposing counsel.

McDermott Will & Emery got good news on the sanctions front (although not nearly as good as they seem to think or would have you believe). The firm is off the hook for $4.4 million in costs that were charged to it for misbehavior in a patent trial.

As for more "normal" litigation:

In the rest of the post at Law Shucks, we address the employment picture, including news on start dates and deferrals, plus the oddball stories of the week.