Biglaw

JP Morgan street logo.jpgIn this weekend’s piece about the White & Case business model, the New York Times noted the law firm, cash-on-hand business model. Yesterday, Kash wrote:

Law firm dons partners generally get loans from banks at the beginning of the year to pay overhead — rent, associate salaries, etc. As the year goes on, they (hopefully) collect massive fees from clients, paying off the loans (and paying themselves out). Apparently, this is how your local ice cream truck driver — or maybe cupcake truck driver — operates his business as well.

Obviously, the model doesn’t work when banks aren’t willing to lend. But today Am Law reports that JPMorgan is poised to step up its law firm lending practice. The move could result in additional lines of credit open to law firms:

JPMorgan Chase is beefing up its profile in lending to the legal industry. The bank has hired the former head of Citigroup’s law firm group.
Lester Pataki, who led the legal industry specialty group in Citi’s private bank arm, is joining JPMorgan as the national practice leader and chairman of its law firm group, the bank announced Monday. JPMorgan says it hopes to capitalize on Pataki’s strategic skills to help it boost its presence in the area.

Isn’t JPMorgan one of the banks that is doing relatively okay? You can almost hear management committees all across the law firm landscape saying “Gimmie, gimmie, gimmie.”
More details after the jump.

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Wilmer Hale logo.JPGHere on Above the Law, we have extensively covered layoffs caused by the shrinking economy. We’ve also covered stealth layoffs. And we’ve covered performance review layoffs that have been done out in the open.

But at WilmerHale it looks like we are seeing an example of this: economically induced performance reviews resulting in stealth messages that require people to openly leave the firm.

Say that ten times fast. A tipster reports:

I know of [several] associates and counsel that have been laid off at Wilmer in the past week. Many of the associates are 2-4 years, but the lay-offs reach up to the 6 year level. All of them were let go for “performance” reasons – but everyone that I’ve talked to has had nearly perfect evaluations….

The not so subtle indication we are getting from the firm is to tread lightly — find something else and leave quietly, and if [people] do that, they will get help, resources, support and references. I imagine the flipside of that is [squeaky wheels] will get a performance-based dismissal to hang over their heads….

People are just too scared to say anything in this economy. Of course, there is always the shame of thinking you’ve been let go for “performance” reasons that will keep people quiet as well.

As we understand it, these cuts have taken place in Washington D.C. and Boston.

After the jump, WilmerHale tells us that there have been no “layoffs.”

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Chambers Associate Chambers and Partners.jpgLast month, we mentioned the plans of Chambers and Partners, the U.K.-based publisher of law firm guides, to launch an online guide to U.S. law firms called Chambers Associate. Already well-known for its rankings of top firms in different practice areas — which firms love to tout in their PR materials, since they’re always good news — Chambers now seeks to supplement its coverage with a resource for law students and laterals.
The Chambers Associate site is now live. Enter a firm’s name in the search box to find its profile, or use the advanced search feature to find firms by region, practice area, or some other criterion.
How does Chambers Associate compare to other resources in the market? The field is already crowded, with players such as Vault and the new ATL / Lateral Link Career Center. Editor Michael Lovatt, whom we met at the NALP conference, explained Chambers Associate:

The emphasis we have gone for is away from the Vault prestige ranking model, and toward the notion that there isn’t a ‘best’ firm, rather that an individual’s specific interests and ambitions make different firms — with their various cultures, policies, practice strengths and identities — the right fit.

Getting law students and lawyers to look beyond prestige, in a profession as status-obsessed as the law, may be a challenge. But at least Chambers has done its homework:

For each firm, we write an overview based on the detailed practice area rankings from Chambers USA, then write 10 sections of editorial based on anonymous telephone interviews with a random, representative sample of junior associates at that firm. It’s an in-depth, substantive approach that we think gets under the skin of law firms in more detail than any other publication.

Present company excluded, of course; here at ATL, we pride ourselves on the ability to “get[] under the skin of law firms.” We checked out a few of the Chambers Associate profiles, and they struck us as comprehensive, if a bit tilted towards the positive.
Press release, after the jump.

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AmLaw 100 2009.JPGCongratulations Am Law 200 firms. You have weathered all the disparaging comments about your cities, your practice, the quality of lawyers that work at your firms. And now, as we stare into the sewage drain of the American legal economy, the Am Law 200 firms are coming out smelling like roses:

Reports of their demise, it turns out, were premature. For years, the regional firms that constitute much of the Second Hundred were told that they were exactly the wrong size: too big to compete with the narrow focus of boutiques and too small to match The Am Law 100′s national footprints and marquee names. But last year, as the financial sector began its meltdown, the Second Hundred’s slow-growth strategies were vindicated.
While average revenue per lawyer at The Am Law 100 decreased by 1.2 percent in 2008 (the first decline since 1991), Second Hundred firms were essentially flat. And when the Second Hundred’s national firms, as well as those in the nation’s biggest money centers–Boston, Chicago, Los Angeles, New York, San Francisco, and Washington, D.C.–are left out of the calculations, average RPL growth was 1 percent. In all, 49 Second Hundred firms posted increases in RPL, compared to 42 Am Law 100 firms.

As Bob Sugar might say: “This is a nice moment for you, I’m going to let you have it.”
After the jump, more ego-shattering news for coastal, prestige conscious associates and partners.

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Ed. note: Have a question for next week? Send it in to advice@abovethelaw.com.

pls hndle copy 2.jpgDear ATL –
I’ve been unemployed for almost a year. I have good academic credentials, but lost my job as a junior-associate in Biglaw before I could develop a highly valuable set of skills. At first, finding interviews for available positions was easy; I just wasn’t able to close. But about five months ago, interviews stopped altogether. I haven’t even been able to find contract work.
The economic recession is obviously a big part of my problem. But I also feel that part of the problem now is my extended term of unemployment. So my question is: How long is too long? When do I have to accept that I simply will not be a lawyer?
He Who Longs to Measure Time in 6 Minute Increments

Dear He Who Longs to Measure Time in 6 Minute Increments,
The fairy tale that you’ve concocted for yourself — that you will never again be a lawyer after T-minus one year of unemployment — is an homage to the Beast, who despairs of turning back into a prince. From the Beauty and the Beast prologue:

Ashamed of his monstrous form, the Beast concealed himself inside his castle, with a magic mirror as his only window to the outside world. The rose she had offered was truly an enchanted rose, which would bloom until his 21st year. If he could learn to love another, and earn her love in return, by the time the last petal fell, then the spell would be broken. If not, he would be doomed to remain a Beast for all time.
As the years passed, he fell into despair, and lost all hope. For who could ever learn to love a Beast?

You have one year to receive True Love’s Kiss and clinch that “awesome” associate job before the enchanted rose’s last petal fell and seals your fate. After one year, you are to remain a Beast forever, hideous to law firms and vile to any employers other than traveling circuses and minstrel side shows. The End.
If really believe that you’ve been out of the law firm game for “too long,” what are your other options? Living as a hermit by the sea? If you have another dream career, by all means pursue it, but if you really want to be a lawyer, you can be one again, even if you’ve been out for a year. This economy is like the Mayer Brown swine flu outbreak — if you make it out alive, you’re expected back at the office. Law firms will have a hard time rejecting applicants based on gaps in their resume alone, when talented and bright laid-off attorneys will comprise a huge chunk of the applicant pool. Patience, Iago. The last petal has not fallen and Elizabeth Halverson has not sung.
Your friend,
Marin
Some advice from Le Fou, after the jump.

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performance reviews.jpgPerformance reviews have never been fun exactly. But these days, when firms are periodically going on “cleanses,” the review process is more nerve-wracking then ever.
We are receiving anecdotal reports of associates who have always received good reviews suddenly being criticized for ridiculously trivial infractions — perhaps to lay the groundwork for a future performance-based dismissal. We are also hearing about reviews being moved up in time at some firms, presumably to accelerate the process of stealth layoffs.
In the worst-case scenario, you may learn that your performance is not up to par and you’re being let go (as happened to approximately 40 Ropes & Gray attorneys during spring performance reviews last week). One of the victims of Ropes’s performance-based firings wrote to us:

First, the idea that this is “performance based” is ridiculous. I received a good December review, got a bonus, and all of the partners I work with have been uniformly shocked that I was on this list (the partners were not informed in advance which associates were being let go, and the onus has been on the associates to inform them — awesome).

The only comment in my review this time around was a vague reference that I was unlikely to make partner….

Indeed, that does seem unlikely now.
An attorney at another firm writes:

During this review period, at least four female associates (including myself) were told that we are not “assertive” or “confident” enough. All four of us are strong, hardworking women, whose only bad comment on the reviews was that we are not aggressive enough.

Well, at least she was proactive enough to write ATL about her firm’s dubious review process.
Performance Review Employee Performance Evaluation.jpgHave your performance reviews changed from perfunctory to terrifying? Do you fear that seeds of criticism are being planted now in order to justify a performance-based firing later? Are you getting new kinds of criticisms?
We invite paranoid speculation in the comments. We especially welcome the leavening of humor — so if some of the review criticisms you’ve received are so silly or stupid as to be laughable, please do share them. Thanks.

wall street bull backside.jpgJust to be clear, the first quarter of 2009 was not the beginning of the great recovery everybody is hoping for. AmLaw Daily reports that Q1 revenue fell on average at 175 law firms:

They were right to be concerned. Citi’s first-quarter 2009 Flash Report indicates that revenues at the 175 firms that provided data were down 3.7 percent from first-quarter 2008, a period that was not particularly robust. Demand at those firms declined 6 percent from year-previous levels. The first-quarter 2009 Flash Report includes results from 71 Am Law 100 firms, 50 Second Hundred firms, and 54 smaller firms.
Citi Private Bank provides financial services to more than 600 law firms in the United States and the United Kingdom. Each quarter, the Law Firm Group confidentially surveys firms in The Am Law 100 and the Second Hundred, along with smaller firms. In addition, we conduct a more detailed financial survey. These reports, together with extensive discussions with law firm management conducted on an ongoing basis, provide a comprehensive overview of financial trends in the industry and insight into where it is headed.

Even more disturbingly, the revenue drop was more pronounced at top firms than the rest of the sample:

On a more granular level, our most recent data shows that Am Law 100 firms were hit harder than the broader sample: For them, revenues and demand fell 5.0 percent and 7.0 percent, respectively (versus 3.7 percent and 6.0 percent for the full sample). In fact, Second Hundred firms actually saw a modest increase of 1.1 percent in revenues and a smaller drop of 1.8 percent in demand. Clearly, those firms with heavy reliance on transactional work and clients who are more heavily weighted in financial services are feeling the pain more deeply.

This seems like a good time to mention that, over the same period, tuition costs at top law schools dropped dramatically stayed exactly the same. As Kanye West might say: “law schools don’t care about broke ass graduates suffering through the worst economic crisis since the Great Depression.”
You’re going to love the proposed remedies to the decline in revenue at law firms. Details after the jump.

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Angry boss.JPGThe ABA Journal addressed a question that is near and dear to the hearts of many associates: How do you deal with a partner that is a big, bad meanie? The story comes from a weekend Wall Street Journal article on handling interoffice bullies. Apparently, a Jones Day associate had the perfect tonic for her blustery boss:

Chelsea Grayson, 37 years old, was an associate at the law firm Jones Day in Los Angeles when she was placed on a series of deals with an ornery senior partner. “He was very intimidating,” she says. “He’d give me these unrealistic deadlines, saying sarcastically that there were 24 hours in a day. He never smiled, and I just thought he didn’t like me.”
Ms. Grayson resolved the situation by making an effort to look at it from the senior partner’s perspective. Nearing retirement, he was under pressure to train the next generation of lawyers while making sure key clients were always happy. “Once I understood his motivation, I decided to take responsibility for changing the dynamic,” she says. “I demonstrated interest and enthusiasm whenever we’d interact, and eventually he became my mentor.”

Something tells me that Ms. Grayson managed this magic trick before the economy went into the tank. Are there strategies that are more relevant to the Great Recession for dealing with mean bosses?
Let’s explore, after the jump.

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Cleary Gottlieb logo.jpgA Cleary Gottlieb partner thinks that an automated “out-of-office” reply send the wrong message to clients. AmLaw Daily reports:

Raj Panasar, a partner in Cleary’s London office, apparently sent an e-mail to London-based lawyers suggesting that they should always be available to answer e-mails or at least arrange for a colleague to answer messages when a lawyer is truly unreachable. The only time an “out of office” reply might be acceptable is when a lawyer is on a long flight, Panasar wrote.

Umm … wtf?

[T]he “out of office” reply should indicate which time zone the lawyer is traveling to and when he or she will be able to respond to the message. At The Am Law Daily, we find that such detailed “out of office” messages are already typical among oft-traveling partners, but we had never heard of a near-blanket prohibition on “out of office” replies.

On the one hand, Cleary hasn’t cut or frozen salaries or gone through a round of mass layoffs. We imagine Cleary attorneys are willing to go the extra mile to serve clients in this market.
On the other hand, what kind of crazy, self-important, gunner-emeritus do you have to be to think that a client cannot process the line: “if you have a pressing question, please contact [Name], [email], [phone number].” Maybe Mr. Panasar is only “truly” unavailable when he is fighting with the flight attendant about the relevant FAA regulations. But the vast majority of people — partners or associates — are not in the best frame of mind to answer pressing work questions when they are trolling for recent divorcees on Grand Cayman. Aren’t you serving your clients better by directing them to attorneys that are in the office and capable of responding in real time, instead of handling it yourself while you are distracted by other vacation activities?
Unless Panasar thinks lawyers shouldn’t ever take a vacation in the first place? But I don’t think Cleary is going to put that in its fall recruitment brochure.
Cleary Partner: “Out of Office” Replies Not Acceptable [AmLaw Daily]

Back in March, we reported that Skadden D.C. lost important members of its litigation team when Andrew Sandler and Benjamin Klubes left to start their own firm. Have those losses been replaced? Sources report Skadden is in the process of poaching a big name from O’Melveny & Myers. Apparently, John Beisner is leaving OMM for Skadden, and he’s taking Jessica Miller and Steve Harburg with him.

Beisner is based out of Washington, D.C. and is the chair of O’Melveny’s firmwide Class Actions, Mass Torts, and Aggregated Litigation Practice. A source says this about Mr. Beisner’s importance to O’Melveny:

Beisner’s cases are an unbelievable percentage of the entire litigation portfolio – this has been a huge fear now realized among associates/counsel.

After the jump, O’Melveny responds.

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