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.
As summer programs around Biglaw wrap up, all eyes turn to offer rates.
The rising 3L participants are looking to wrap up the golden tickets* of an offer of permanent** employment (* – but don’t forget about deferrals and recisions; ** – or layoffs).
Rising 2Ls have finished applying for law reviews and journals and are focused on prioritizing their bids for OCI. High offer rates are a definite plus in deciding which firms to try to get interviews with. As are the firms’ prestige rankings, especially if there’s a particular practice area of interest.
The rest of the denizens of Biglaw view offer rates as one measure of a firm’s health.
Of course, summer programs aren’t the only way into Biglaw — or at least television producers don’t think so. There’s a new drama in the works about a slacker who gets hired at a top Manhattan firm, despite not having a law degree.
After the jump, a roundup of summer-program news, billion-dollar deals, lateral moves, and other recent developments from around Biglaw.
The first news on summer offer rates was good – Pepper Hamilton gave surprise offers to all 11 of its Philadelphia participants.
In DC, Latham & Watkins made a similar unexpected announcement. Ropes & Gray quickly followed with news that it gave offers to all 82 summers across its whole program (the previous two firms were limited to the particular offices).
The hits just kept on coming. Proskauer – 20/20 in New York. Shearman & Sterling – 27/27 in New York. Latham – 20/20 in LA.
The good news isn’t limited to hiring rates. Class sizes for next summer are growing – and in some cases, by leaps and bounds. Cravath is going from 23 to 75 (compared to 123 in ’09, though); Skadden will go to 100 from 79 this year (still down from 225 in ’09). Ropes & Gray and Jones Day will also restore some, but not all, of the numbers. Proskauer will hold steady.
Beware the "mad rush" of interviews, though. Jones Day is trying to put the brakes on the out-of-control process that requires hiring decisions to be made basically two full years before start dates – but only by a month. Huh?
Unfortunately, the news wasn’t all good. Dewey & LeBoeuf has decided to "pause" its summer program in Chicago, Los Angeles, and Houston.
Biglaw has long had a lock on the world’s biggest and most-interesting deals. A sampling of firms that had roles in recent notable deals.
- PartyGaming merger with bwin ($2.7 billion) – Not the biggest deal announced this week, but the closest to our hearts. Pre-UIGEA, Party was the 800-pound gorilla of online poker in the US. As Congress gets its act together on re-legalizing the game (3rd item), it will be interesting to see if Party can return to its former glory and challenge the hegemony of PokerStars (where we mostly play) and Full Tilt. Clifford Chance for Party, Freshfields for bwin.
Interestingly, Bird & Bird is doing the due diligence for both sides – that’s an interesting cost-cutting structure we’ll be keeping an eye on (and it screws up league tables, too).[UPDATE: 2 Birds, as they're affectionately known, is just doing due diligence for bwin and is also advising on options. Farming diligence out to a more cost-effective- firm is still a trend on the rise.]
- GM acquisition of AmeriCredit ($3.5 billion) – Andrews Kurth for the buyer, Hunton & Williams for the target (a provider of auto financing), Akin Gump for the board, and Greenberg Traurig for one of the selling shareholders. But what’s really interesting is that Weil Gotshal turns up on the seeming "wrong" side of this deal. The firm represented one of the other sellers, instead of GM itself, as would have probably been expected. Weil famously the automaker in its bankruptcy proceedings, and even that involved all sorts of other interrelationships, like legendary Weil partner Ira Millstein’s son being one of the Treasury department officials overseeing the bailout.
- Qatari Diar Finance bond offering ($3.5 billion) – Latham for the issuer, Skadden for the underwriters, Hogan Lovells for Barwa City Real Estate, the development company to which 45% of the proceeds from this Islamic financing will be routed.
- Nippon Telegraph acquisition of Dimension Data ($3.3 billion) – Keep an eye on the outsourcing deals; we’ve been saying for a while that legal is one of the last remaining large verticals for the ITOs and LPOs to start hitting up. Linklaters for the buyer, Eversheds for the London- and Johannesburg-listed IT outsourcing service provider.
- Lion Capital LBO of Picard Surgeles ($1.9 billion) – More private equity spinning off work for firms, including a double dose on this frozen foods deal, as it’s actually a flip from one sponsor (BC Partners) to another. Cleary for the seller, SJ Berwin for the sponsor.
The granddaddy of all deals, though, is the Lehman bankruptcy. Legal fees are coming up on $400 million, half of which has gone to Weil Gotshal.
Bankruptcy used to be viewed as "beneath" the white-shoe firms, but Simpson Thacher’s role in the American Safety Razor filing shows that if the money is good enough, even the stodgiest of firms will take the job. (And that there is no limit to the amount of work a good private-equity client can provide a firm)
Perhaps the most-interesting move last week was William & Connolly’s Lon Babby’s move to the Phoenix Suns. Long a sports agent, Babby is not going in as GC, but as the team’s president of basketball operations. He is one of many Biglaw alumni working in major sports, as AmLaw Daily recounts. Among others in the news this week, there are:
- Skadden alum William Daly, the NHL deputy commissioner who made the statement about the League’s rejection of Ilya Kovalchuk’s deal;
- NFL GC Jeffrey Pash, who was previously at Covington & Burling;
- Pash’s nemesis, NFLPA executive director DeMaurice Smith, who was a Patton Boggs partner; and
- Chuck Greenberg — still a Pepper Hamilton lawyer, but he moonlights as the leader of one of the consortia bidding for the Texas Rangers out of bankruptcy.
Exciting as those jobs appear, last year wasn’t great for GCs. Bonuses were down 37%, but salary and stock awards were up. Johnson & Johnson’s Russell Deyo was the highest paid GC, taking home $4.4 million in cash.
If you’re interested in making that transition, the Law Shucks Jumping In(House) column keeps rolling along with all the inside information on how to do it and, most importantly, what to watch out for. The latest edition highlights some of the "business side" opportunities for lawyers, but comes with a stern note of caution.
On the firm side, Nixon Peabody keeps losing lawyers. NYLJ reports the departures of employment partners Philip Berkowitz and Randy Gidseg for Littler Mendelson. According to the Law Shucks Lateral Tracker, the firm has lost at least 23 lawyers so far this year, including blocs of seven finance lawyers in New York to Pillsbury Winthrop, nine to DLA Piper, and four to Rochester’s Bond, Schoeneck & King.
Dewey & LeBoeuf is also starting to show a noticeable number of losses. The managing partner of D&L’s Palo Alto office took two other IP lawyers with her to Kaye Scholer. That brings the firm’s tally of 19 defections so far this year.