Biglaw

twitter logo.jpgCan social networking benefit Biglaw firms? On the one hand, any way for firms to directly reach prospective clients and new hires sounds like something that should garner Biglaw interest. On the other hand, sites like Twitter have yet to prove themselves as a business generation tool.
But regardless of whether you think Biglaw firms should be in on the Twitter game or not, certainly firms should be protecting their brand names on Twitter. (Ed. Note: Above the Law is on Twitter. And so are your editors, David Lat, Kashmir Hill, and me). It appears that if Biglaw firms ever join the Twitter age, they’ll have to fight with cyber-squatters to get their names back. Legal Blog Watch reports:

Going through a list of the top 50 law firms, I was quite surprised to see that no less than 95 percent of the names that I thought these top 50 law firms would eventually want to use were unregistered. I suggested in a post on my own blog that day that anyone reading from BigLaw should “take 30 seconds and register your law firm’s name today … Even if you don’t understand what Twitter is, please just trust me and do this. Your law firm will thank you later, I promise!” I listed about 35 no-brainer Twitter usernames that I felt BigLaw needed to immediately lock up (e.g., @dlapiper, @jonesday, @akingump).

Just a few days later, the Biglaw Twitter names were gone. But were they snapped up by law firms?
More after the jump.

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Morgan Lewis.JPGMorgan Lewis Chairman Fran Milone just finished a video conference with all associates and staff at Morgan, Lewis & Bockius. And he unleashed some big news. Morgan Lewis is making some major changes in response to the continuing economic recession. Here are the top bullet points:
* Eliminating lockstep compensation for 2010.
* Canceling on-campus interviewing during the fall of 2009.
* Canceling the 2010 Summer Associate Program.
* Pushing back the start dates of current summer associates to 2011.
The firm has already communicated their decision to law schools who had expected to host MLB interviewers this fall.
After the jump, Mr. Milone offers a brief statement about these decisions.

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Wilmer Hale logo.JPGLast month, the firm of WilmerHale denied that any layoffs have taken place at the firm. The accuracy of that statement depends on what the meaning of “layoff” is.

In an internal memo obtained by Above the Law, the firm acknowledges that “a very small number of individuals” have been asked to leave WH for economic reasons. The memo also notes that the performance review process “is affected by the reality of current economic conditions, as performance issues sometimes come to light more when business is slower.”

(This may constitute some welcome candor. Other firms try to claim, somewhat implausibly, that performance reviews are utterly unaffected by the economy, i.e., that associates are judged by the exact same standards as in boom times.)

Still, the knowledge that the economy contributed to one’s purportedly performance-based dismissal is cold comfort. From an affected associate at WilmerHale:

I was one of the ones that was cut for “performance” reasons. My evaluations were [several] pages long, single spaced — of accolades… with one half of one sentence that mentioned something I could improve on… from one partner out of [many] that evaluated me. I was let go based on that one phase, copied and pasted on the front of the eval…. Unlike the claim [in the memo] that the firm cannot give associates “three or four” chances to make improvements, I had never received a similar comment in the past.

Many partners were apparently left out of the process of deciding which associates to cut — and as a result have begun to “vent” to the associates that were cut about the process. We (as cut associates) actually had the incredibly uncomfortable task of informing partners that we worked with, who did not know we had been cut, that we were leaving. The resulting frustration of partners has led to a leak of a few tidbits of info on the numbers cut. The numbers floating around differ, but I’ve heard that between 10-15% of all associates firm wide were informed of their “transitions” over the past month. Apparently, another round may be coming in the fall.

Anxiety-inducing for current WilmerHale associates, but perhaps not a surprise. Expect a number of firms to trim their ranks after summer associates head back to school.

More discussion, plus the full memo, after the jump.

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Back in March, we reported on stealth layoffs at Davis Polk & Wardwell. Stealth layoffs are usually seen as an effort to maintain high attorney utilization rates — and high partner profits. But at genteel, WASPy DPW, long known for its passive-aggressive kinder and gentler firm culture, profits come second to pulchritude.

Everything is beautiful at 450 Lexington — the offices, the stationery, and yes, the attorneys. DPW has long been known for hiring based on beauty as well as brains. So we suspect that their recent stealth layoffs were just an “office beautification” project: lay off the less attractive associates, to increase the average hotness of the remaining lawyers. (Lord only knows what the denizens of the recently closed Frankfurt office looked like.)

A few years ago, we wrote about Davis Polk’s reputation for hiring aesthetically appealing attorneys in the New York Observer:

Bar Belles: According to Rob, a 2L at NYU, one firm that’s in demand this season is Davis Polk & Wardwell. Why? “I’ve heard they have good-looking associates.”

Some things never change. When I interviewed a decade ago, Davis was already known as a bastion of beauty on aesthetically challenged Lexington Avenue. It was the firm of choice for the prom queen and king of my law school class — the editor in chief of the law journal, a luminous doll-like beauty with a vast family fortune, and her Abercrombie-handsome future husband. They were joined at Davis by enough comely Asian females to cast Memoirs of a Geisha.

And hotness matters more at Davis Polk these days, now that their redesigned website features attorney photos (for some, but not all, of the lawyers — perhaps it was an “opt in” regime?). From an observant tipster:

Have you noticed that Davis Polk’s new website has pictures of attorneys? Weren’t they once afraid of stalkers? Glad they’ve gotten over that. Or perhaps their associate corps is simply uglier now.

We think not. If you visit the Davis Polk — er, DavisPolk — website, and surf through the attorney profiles, you’ll still find hotties to spare.

Evidence of hotness, plus additional analysis, after the jump.

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Salary Cuts.jpgWe’ve been extensively chronicling salary cuts for associates. One consistent firm rationale for cutting salaries is that firm clients are no longer willing to pay for junior associates. The consistent counter-argument is that clients don’t care what associates get paid, clients care about what clients are charged.
Unfortunately, there has been precious little information about what law firms are doing to reduce their billing rates. It seems that firms want to get the information out that they are cutting the salaries of their attorneys, but do not wish to discuss what they are charging their clients.
Today, Incisive Legal Intelligence released its 2009 Billing Rates and Practices Survey Report. Unfortunately, you have to pay for it. But here is the top-line summary from the press release:

The average hourly billing rate reported was $284. Nationally, plaintiffs’ contingency litigation is the practice area with the highest average hourly billing rate ($413), followed by labor/employment ($302), general law ($295) and real estate/land use ($294). The billing rate survey data represents a sample of more than 14,000 lawyers throughout the 50 United States, drawn from responses from 255 law firms.

More notes from the report, after the jump.

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  • 06 Jul 2009 at 3:13 PM
  • Biglaw

The Rise of Midlaw

midlaw.gifThe Wall Street Journal (subscription) has an article that doesn’t go so far as to proclaim the end of Biglaw, but does speak to the rise of midsize firms. The less-than-200-attorney firms are getting a little recession boom as clients seek out lower rates:

A survey of 550 large companies by BTI Consulting Group found that 38% of the law firms they hired last year came from below the nation’s top 200 in terms of revenue, which generally means small and midsize firms. That was up from 25% in 2007.

Florida company AutoNation is one of the clients that has switched from Biglaw to Midlaw for its legal work, and shaved its bill by a quarter. Its new firm, Angelo & Banta, charges $200 to $495 an hour for work done by senior partners, according to its managing partner.
So how can Biglaw firms hold on to their clients?

General counsel and consultants say that to keep valuable clients, big firms have been more receptive to charging flat fees, removing some uncertainty for clients who otherwise would be billed by the hour. And when large firms do charge hourly rates, they often are doing so at a discount.

The good news is that midsize firms are hiring. The bad news is that those jobs come with midsized paychecks.
Midsize Law Firms Pick Up Clients as Companies Turn From Pricey Giants [Wall Street Journal]

Orrick logo.JPGBiglaw firms have been talking about moving away from lockstep since the start of the recession. Orrick’s Managing Partner, Ralph Baxter, has been talking about it since before the recession.
Next year, Orrick will be doing it. Instead of a lockstep system, the firm will introduce three different levels for associates. Here is the how the firm describes the change in its official press release:

Orrick will replace the automatic lockstep advancement model for its partner track associates with a model that allows associates to advance at a pace that reflects their developing skill set.
The firm will have three levels of associates – Associate, Managing Associate, and Senior Associate – with well-defined performance criteria for advancement from one level to the next and with corresponding compensation levels. To implement this program, the firm is enhancing its associate training, mentoring, and feedback systems.
“The traditional associate lockstep staffing and compensation model is based upon out-dated assumptions,” said Laura Saklad, Orrick’s Chief Lawyer Development Officer. “Our new Talent Model recognizes that not all associates advance at the same pace, tenure is not a proxy for advancing skill, and clients should not bear the cost of training associates. In the end, our goal is to deploy the right lawyer or professional for the right task at the right cost. ”

The three classes apply only to “partner track” associates. What are non-partner track associates going to get? More details and an opportunity to provide some instant feedback via a reader poll, after the jump.

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A List American Lawyer Top Firms.jpgAmerican Lawyer has released its A-List for 2009. The rankings try to measure the qualities that make an elite law firm:

This list, which we launched in 2003, aims to measure and quantify the qualities that define an elite law firm, making an effort to look beyond profits. We examine four factors: revenue per lawyer, commitment to pro bono, diversity among lawyers, and associate training and satisfaction. Our formula gives more weight to the first two factors; we double a firm’s scores for revenue per lawyer and pro bono, and then add scores for diversity and associate satisfaction.

This year’s A-List? The elite of the elite? The top three firms are:
1. Munger, Tolles & Olson
2. Hughes Hubbard & Reed
3. Latham & Watkins
I’ll pause to give laid off Latham associates an opportunity to finish screaming. Please return after the jump.

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hired law grad apprentice.jpgFirst years to 100K and an “apprenticeship”?
In the past two months, we’ve reported on three firms instituting an apprenticeship model for first year associates: Drinker Biddle, Howrey, and Frost Brown Todd. “Apprentices” start at the firm at a lower salary and are not billed out to clients, billed out at a lower rate than normal associates, or billed out for lower total hours. It sounds like an apprentice is a “paralegal plus.” Of course, that “plus” includes a J.D. and its accompanying law school debt.
Still, when we polled you last week, almost 70% of ATL readers who voted said they were in favor of Howrey’s $100K-plus-professional-training apprenticeship.
The National Law Journal (subscription) has an extensive piece on apprenticeships (noting two other firms that have instituted the practice — labor firm Ford & Harri­son and Dallas’s Strasburger & Price):

These firms are putting new recruits through additional apprenticeship programs that they say will better train their attorneys for life at a law firm and for handling clients. Think of it as the equivalent of a medical residency, only with suits instead of scrubs.

The latest — and so far largest — firm to move to an apprenticeship model, 659-lawyer Howrey, announced its program last week. Starting next year, first-years at the firm will get a pay cut — from $160,000 to $100,000 in base pay plus a $25,000 bonus to pay down law school loans — and they’ll spend a good portion of their time attending classes with partners and shadowing them on client matters. The apprenticeship period will last two years.

Are law students really like medical students, in need of on-the-job training in order to operate in the real world? If apprenticeships become widespread — which admittedly seems unlikely once the tough economic times are behind us — should the training at a firm mean one less year in law school? Firm salaries are going down, but law school tuition is going up. Maybe it’s time to rebalance.
A round-up of the salaries for BigLaw apprentices, and a poll on how law schools should be reacting to deflating salaries, after the jump.

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Uptown Charlotte before the fall.JPGOh Charlotte. Oh Queen City. My how global economic crisis denuded your legal industry.
Maybe it is time for a comeback? The Charlotte Observer reports that a legal services firm is poised to hire 100 Charlotte based attorneys:
Unfortunately, we’re talking about document review attorneys:

DiscoverReady, which analyzes e-mails and electronic documents for law firms and corporate legal departments, is opening the office on Trade Street uptown in mid-June. The company has already hired about two dozen workers and will hire others in waves throughout the year, said Jim Wagner Jr., DiscoverReady’s chief executive officer.
About a third of the positions will be full time; the others will be temporary and contract jobs, he said. Most of the company’s workers are attorneys, but company officials are also looking for project managers, office staff and other employees.

All and all, isn’t this good news for the Charlotte legal economy? More details after the jump.

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