Biglaw, Law Shucks

This Week in Biglaw: 06.20.10

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.

This is supposed to be the quiet time of year for BigLaw, but it seems firms and lawyers are taking that as an opportunity to re-assess their situations. Merger talks and lateral moves have been on the upswing lately.

The Hogan Lovells merger is old news by now, and it’s been just over a week since Sonnenschein and Dentons partners voted to approve the merger of those firms to create SNR Denton, which will become effective September 1. The Ho-Love tie-up led to more than a dozen partners’ departures, and we won’t be surprised to see similar movement in the coming months as the SNR Denton closing approaches.

We may be seeing a handful of other firm combinations, particularly continuing in that Anglo-American variety.

Chicago’s Mayer Brown, which has already integrated one UK firm (Rowe & Maw back in 2002), has been in on-again/off-again (currently on) talks with London’s Simmons & Simmons. Proskauer and SJ Berwin have also been rumored to be talking merger, although that has been quiet for the past month. Bruce MacEwen at Adam Smith, Esq. has his thoughts on what makes these mid-ranking London firms attractive targets to a certain type of US firm.

Reed Smith, K&L Gates, and Bryan Cave are other US firms that would "actively consider" UK acquisitions. Reed Smith has already walked down this path twice: with Richards Butler in 2007 and Warner Cranston in 2001.

Freshfields is taking a much-more casual approach. Rather than committing to anyone, the firm is "creating a framework for ad hoc referrals" rather than a "Lovells-style ‘Mexican Wave’" arrangement (we had to look that one up – the ‘Mexican Wave’ is just ‘the wave’ thing done by crowds at sporting events – and we’re still not sure how it applies to law firms).

After the jump, we recap the week’s news on summer programs, lots of law-firm litigation, and, unfortunately, another addition to the Layoff Tracker.

Employment

Ahh summer programs. We’ll miss you. Firms used to roll out the red carpet in their efforts to woo the best and the brightest. Work loads were reduced to the bare minimum so as not to interfere with the summer associates’ social calendars. Awkward and unpleasant senior associates and partners were shipped off to parts unknown for document reviews, and the most-gregarious of the full-time staff were tasked with ensuring that students got the full Potemkin treatment.

2Ls, who used to have the ability to pick and choose among offers, are now walking into a downright hostile environment. As if the competition with their classmates for fewer spots from already-reduced classes weren’t enough, clients don’t want anything to do with them.

Citibank got the headlines when it confirmed a policy that it would not pay for law students’ time on the company’s matters, but plenty of other pundits were there to confirm that the story is similar all across the market.

The pendulum has swung back in a hurry. In Atlanta, summer-class sizes are down by two-thirds since 2008. ABA Journal did put a nice spin on the smaller-class-size issue, saying that it was an opportunity to get more interaction with partners.

Not only have successful summer offer rates plummeted, but at McDermott, the fundamental terms of the offer can change, for the worse, in a hurry. That lines up with firms’ long-overdue acknowledgment that they just don’t want everyone to be gunning for partner. So now it’s on the gunners to think about what they really want.

Pundits like to call the end of lots of things, and summer programs may be one of them as firms turn to apprenticeship models. The firms themselves don’t appear to be nearly as interested in such a change.

For those who crave the warm, fuzzy feeling of being needed, the New York City law department is the place to be. They can’t get enough of the deferred associates. That’s not stopping the pro bono organizations that are benefitting from these programs from being picky. They’re benefiting from a tidal wave of interest.

Former employers certainly aren’t going to meet that need for affirmation. Simpson Thacher may not be allowing all its public-interest fellows to return.

It’s a long shot, but there may be a new opportunity for recent grads inhouse. HP has hired three brand-spanking new lawyers, a break from most companies’ practice of hiring only experienced lawyers (and if that’s something you’re interested in, there’s no better guide than our Jumping In(House) column).

All hope should not be lost, though. Skadden was founded by two guys who were passed over at other firms and an inhouse lawyer (and as we pointed out in that piece, they had enough common sense to not stick with the name-ordering that would have had the firm known colloquially as "ASS").

Practice

We regularly cover firms dispute-resolution work for clients in the "Suits" section of this column, but when the firms are involved as principals, that’s a horse of another color. Malpractice and discrimination are the most-common reasons for a firm to end up as party to a lawsuit, but the variety in the underlying facts never ceases to amaze.

Firm against firm is always the most interesting, and we had one this week. Drinker Biddle won more than $1.3 million in a fight, which turned ugly, to recover fees from a Pepper Hamilton client.

It’s not quite firm vs. firm, but Milbank is trying to squash a Pepper Hamilton lawyer’s dream of owning a major league baseball team.

A sampling of firms’ troubles from the past week:

  • Proskauer (represented by Boies Schiller) was able to scratch together a mistrial, when two out of six jurors voted that the firm had not committed malpractice, despite Boca Aviation’s allegation that the firm had cost it the opportunity to develop some real estate by the airport;

  • Fried Frank is hoping Proskauer will have better luck for a paying client. FFHSJ is facing four discrimination suits (age x2, race, and sexual orientation), and Proskauer’s Bettina Plavin is defending at least two;
  • Greenberg Traurig is facing a $52 million suit from investors who were allegedly victimized by a mortgage scheme involving documents the firm worked on;
  • Baker Donelson successfully reversed a denial of its motion for summary judgment that a partner’s affair with a client’s wife had not caused the firm to breach its fiduciary duties;
  • Gibson Dunn is going to arbitration in its effort to recoup $1.3 million in fees from Markstone Capital Partners;
  • Quinn Emanuel, meanwhile, is accused of running up $15 million in excess charges, which its former client calls fraud;
  • Duane Morris won summary judgment against a malpractice claim relating to its failure to serve timely some documents in a construction dispute; and
  • Six firms are involved in the Manatt Phelps & Phillips mess with the Franklin Mint over claims the firm brought on behalf of the estate of Princess Diana about some collectibles that we can only assume were nothing but classy.

Sometimes it’s not the whole firm that gets in trouble, it’s individual lawyers.

In the conclusion of the article on Law Shucks, we have actual layoff news, updated layoff counts, and the most-interesting one-off stories of the week.

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