* Judge Ellen Huvelle has ordered the government to turn over to her an executive order that the feds claim is subject to executive privilege. Judge Huvelle rejected the administration’s argument that privilege exists because, “we don’t want to give it to you.” [Politico]
* Pepper Hamilton has joined the greener pastures of Silicon Valley, opening an office with three partners poached from Goodwin Proctor. [Reuters Legal (sub. req.)]
* Speaking of poaching, Martin Dunn, former deputy director of the SEC and O’Melveny partner is joining Morrison & Foerster. [The Blog of the Legal Times]
* And while we’re at it, M&A partner Sean Rodgers has left Simpson Thacher to merge with Kirkland & Ellis. [The AmLaw Daily]
* Publisher ALM (The American Lawyer, Corporate Counsel, The National Law Journal, The New York Law Journal) has a new technology partner and hopes to boost its readership. If they want to boost their readership, wouldn’t starting a new law school be a better investment? [Talking Biz News]
* Conservative groups are miffed about video of this Democratic party lawyer “attacking” a Republican at the polls and trying to “steal” an election. It seems like he put his hand over the lens of a camera phone, but sure, this is exactly like telling minorities the wrong day to vote. [Bearing Drift]
Today, we turn toward the other major category of Biglaw practitioners: corporate/transactional attorneys. Unlike litigators, about whom the public at least has some notion, however distorted, of what they do, most people have no clue what corporate lawyers are up to. No young person daydreams about “facilitating a business transaction,” while there are some who aspire to argue in a courtroom. As noted last week, this litigation/corporate information imbalance is reinforced by the law school curriculum, which remains largely beholden to the case method of instruction.
When comparing the experiences of corporate lawyers versus litigators, there is a familiar litany of pro and cons:
Transactional work is not zero-sum. In theory at least, you work with, rather than against, other lawyers. Although obviously you must protect your client’s interests, you’re not trying to annihilate the other guy.
Your client is probably in a better mood compared to a litigation client and more likely to see you as an ally than as a necessary evil.
Typically, Biglaw firms staff corporate deals much more leanly than litigations, which tend to be more heavily staffed and hierarchically organized.
The low-level work is awful. But this applies equally to litigation. Litigation has doc review and transactional juniors get due diligence. Pick your poison.
Litigators have dates on the calendar — filing deadlines, court dates, etc. — and are somewhat able to anticipate their busiest periods. Not so for corporate attorneys, who generally have much more unpredictable schedules, driven by the vicissitudes of client demands.
Anyway, most Biglaw aspirants are going to have to choose (or be forced into) either transactional or litigation practice. (Again, of course we must acknowledge that in the current legal job market, such a dilemma is the classic “luxury problem.”) For those in a position to choose, which Biglaw shops’ corporate departments offer the highest quality of life? We’ve dug into our survey data for answer.
The ATL Insider Survey (14,500 responses and counting) asks respondents to assess their employers in terms of compensation, training, firm morale, hours, and culture. Below are the firms that were highest rated by their own corporate attorneys in each category, as well as overall. Keep in mind that these ratings are a commentary on the firm as an employer, without regard to “prestige” or transaction values. Please note we lack sufficient survey data to generate ratings for all firms, most notably in this case Wachtell. Also, we use the category “Corporate” in its broadest sense, lumping together securities, M&A, and all the varieties of corporate practice into one group. Ratings are on a scale of 1 through 10, with 10 highest.
Davis Polk 8.82
Debevoise & Plimpton 8.75 Paul, Weiss 8.50
Simpson Thacher 8.18 Latham 8.00
Average score for all firms: 6.96
Training Cravath 8.89
Latham 8.63 Wilson Sonsini 8.53
Ropes & Gray 8.50 (tie)
Debevoise & Plimpton 8.50 (tie)
Average score for all firms: 7.09
Culture & Colleagues
Davis Polk 9.18
Debevoise & Plimpton 9.00
Simpson Thacher 8.76
Ropes & Gray 8.67
Average score for all firms: 7.69
Davis Polk 8.68
Debevoise & Plimpton 8.44
Simpson Thacher 8.35
Ropes & Gray 8.05
Average score for all firms: 7.29
Wow, Davis Polk takes the top spot in both our corporate and litigation practitioner Insider Survey results. So it’s true: beautiful people are happier. Congratulations to Davis Polk.
Overall, these lists are unsurprisingly dominated by New York firms. Not just any New York firms, but those of the old money, blindingly white-shoe variety: Debevoise, Simpson, Cravath, etc. Apparently, these firms’ reputations for genteel and courteous firm cultures are well-founded. Not to mention a breeding ground for contented lawyers who are practicing at the highest level.
If you have yet to do so, please take a few minutes and tell us about your law firm (or law school) here. Thank you for your contributions.
* Biglaw’s billing bonanza: at least 12 firms are advising on the multi-billion dollar deals going on between Microsoft / Nokia and Verizon / Vodafone, and Simpson Thacher landed a seat on both. [Am Law Daily (sub. req.)]
* Standard & Poor’s is now accusing the Department of Justice of filing its $5 billion fraud lawsuit in retaliation for downgrading the country’s credit rating. Aww, we liked the “mere puffery” defense much better. [Reuters]
* The new ABA prez doesn’t think Obama meant what he said about two-year law degrees. He thinks it’s about cost. Gee, the ABA should probably do something about that. [National Law Journal (sub. req.)]
* Meanwhile, New York Law School wants to condense its offerings into a two-year honors program that comes complete with a $50,000 scholarship. Sweet deal if you can get it, but it sounds like most people won’t. [Crain's New York Business]
* Stewart Schwab, the dean of Cornell Law School, will be stepping down at the end of the academic year. The search for someone new to oversee the filming of amateur porn in the library is on. [Cornell Daily Sun]
* Crisis? What crisis? Nothing is f**ked here, dude. Amid plummeting applications, GW Law increased the size of its entering class by about 22 percent. The more lawyers, the better, right? /sarcasm [GW Hatchet]
* Jacked up! Attorneys for NFL player Aaron Hernandez got a stay in the civil suit accusing the athlete of shooting a man in the face until after the athlete’s murder charges have been worked out. [USA Today]
* Former Congressman Jesse Jackson Jr. is heading to prison in Alabama for 30 months. Among the items he improperly purchased with campaign funds was a cape. How awesome is that? [Reuters via Yahoo! News]
* The Bureau of Prisons is planning to move its female inmates out of Danbury to convert it to a men’s prison. The author behind Orange Is the New Black has a different plan. [Jezebel]
* Reminiscent of the gun post a while back, more proof that women have all kinds of room to store contraband. [Legal Juice]
* Simpson Thacher lawyers reached some “unsettling conclusions” about the Clinton Foundation. Probably spending too much time with that Lewinsky Foundation. [New York Times]
* You thought there was animosity toward lawyers in the U.S.? Check out how much they hate them across the pond. [Legal Cheek]
For many law schools, the bidding process for the upcoming on-campus interview season closed yesterday. In bidding, schools quite reasonably advise students to select potential employers that align with their aspirations and geographic preferences. For example, the section of the Duke Law web site devoted to OCI admonishes students to “thoroughly research” potential employers and to “focus only on employers in whom you are genuinely interested and that match your career goals.” Presumably, one career goal shared by all law school graduates is to eventually be free of debt. As previously and repeatedly noted, for most, a Biglaw associate position is the only employment outcome which gives the graduate a plausible prospect of paying off his student loans.
So what shapes student perception of large law firms and drives the decision of the law student in prioritizing their OCI bids? No doubt there are unique versions of received wisdom that get passed from generation to generation of students at every school. And of course there are plenty of media entities measuring firms against one another: revenues (AmLaw), “prestige” (Vault), practice area prowess (Chambers) and so on. This being the time of year where Biglaw careers are just starting to be built, we thought it would be interesting to look at how students themselves rate law firms. Which firms are the law student favorites?
The ATL Insider Survey asks law students for their perception of specific firms as potential employers . Below are the top ten rated firms. For comparisons we’ve included the firms’ AmLaw 100 ranking, Vault ranking, and the ATL Insider Survey “Overall Satisfaction” Rating (as scored by attorneys currently working at the firms).
There don’t appear to be any clear correlations among these rankings, though it appears that Vault’s “prestige” rankings hold some sway. One striking disconnect is the appearance of Sullivan & Cromwell and Arnold & Porter in the top ten – both are among the Insider Survey’s lowest rated by attorneys currently practicing at those firms. In any event, congratulations to Cleary on being our student readers’ dream firm. Looking at survey comments we’ve received from practicing attorneys at our three top firms, the students’ positive perception of them as employers finds much support. Although not all the survey comments were this rosy—far from it—the quotes below are representative of a significant swath of insider opinion:
Cleary: The culture is terrific. People are not just nice but also interesting and proactively collegial. The cases, clients, and deals are high-level and interesting. Lock-step compensation means no competition between associates or partners for hours and labor. Open practice groups means the flexibility to gain general expertise in a variety of disparate areas. Hours are long and expectations are high, but it happens in a supportive and friendly environment.
Davis Polk: Best work you can get on the street, but, more importantly, best people to be working with. You’re going to end up being in the office at 3 am one day or the other regardless of which firm you choose, you might as well like the person sitting across from you while you’re there.
Gibson: Gibson Dunn is everything you’d want from a firm, at least relative to its peers in Biglaw: everyone is really friendly and easy to work with, the work is interesting and substantive (I’ve been here 4 months and I’ve gotten to write 2 motions and a section of a brief), the quality of work here is excellent (you really can trust anyone here with anything), it’s flexible in terms of hours and working at home, and the pay is competitive (even starting associates got stub bonuses).
Finally, if you have not yet done so, please take a couple of minutes and take our Insider Survey here.
Ed. note: This is the latest installment in a series from Bruce MacEwen and Janet Stanton of Adam Smith Esq. and JDMatch. “Across the Desk” takes a thoughtful look at recruiting, career paths, professional development, human capital, and related issues. Some of these pieces have previously appeared, in slightly different form, on AdamSmithEsq.com.
Next in our series on a taxonomy of law firms are the capital-markets centric firms.
If you think this moniker roughly translates to the classic New York white shoe elite, move to the head of the class.
But, as much in our world at the start of the 21st Century, it’s not exactly that simple. Here’s what’s different about these firms.
First, recall that we’ve hypothesized seven primary species…
1. Global players
2. Capital-markets-centric specialists
3. Corporate-centric (non-global) firms
4. Category killers
5. Traditional boutiques
6. The hollow middle, and
7. Synergistic super-boutiques
My theory is that what’s exceptional — indeed unique in our taxonomy — about the capital-markets specialists is that the Great Reset mattered less to them than to any other category, and indeed to some of them it only reinforced their ability to go from strength to strength. Indeed, if you want to detour with me for a moment into how the Great Reset hit each of our categories, I’d say it hit #1, 3, 4, and 5 “normally” in our industry, which is to say quite hard. It hit #6 with a couple of torpedoes below the waterline, which is to say very hard indeed, although the damage may not be entirely evident as yet to the naked eye, and #7 is the new category emerging largely in response to the Great Reset.
But the Great Reset’s impact on our topic du jour, #2? Not bad; maybe even half-good.
A result, not the only one but a conspicuous one, of the Great Reset has been a flight to quality coterminous and simultaneous with a flight to value. Our capital markets heavyweights represent quality incarnate, so they’ve come out by and large winners. If you doubt me, look at the Am Law 2012 results reported so far. Let’s use “Value per Lawyer” as our rough and ready proxy, which Am Law defines as a measure of “how much money, on average, each of a firm’s lawyers contributes to overall partner compensation.” Let’s set aside quibbles about methodology and focus impressionistically on the firms at the top of this particular food chain. Tell me if you see a pattern:
Davis Polk: $495,000
Paul Weiss: $540,000
Simpson Thacher: $590,000
Sullivan & Cromwell: $755,000
If you wonder whether these numbers are impressive or mid-pack, because it’s not a familiar metric, here are a few comparables if you’d like (random selection):
Baker & McKenzie: $195,000
SNR Denton: $230,000
Here are a few other Am Law metrics, this time change in gross revenue in 2012 vs. 2011:
Paul Weiss: +12.4%
Sullivan & Cromwell: 6.4%
Davis Polk: 4.4%
Simpson Thacher: 2.0%
In a “growth is dead” market, these are by and large impressive numbers, and Paul Weiss’s and Wachtell’s are shockingly good. If our pie, as an industry, is relatively static (adjusted for inflation and global GDP growth), it looks as though many of these firms are expanding their market share. They must be doing something right.
So are these firms “golden,” having found an incredibly fit-to-purpose sweet spot in the market? Do they have anything to worry about?
As a New Yorker born and raised, I should be the first to cheer them on and wish the answer were no. But I can’t say that.
The good news is that these firms are (still) on a roll, and they have been for a long time. The bad news is that New York’s share of global capital markets activity has almost certainly peaked, and having 85%—100% of your lawyers in Manhattan may not be the one and only real decision you need to make to thrive as one of these firms.
In other words, though the Great Reset seems hardly to have mattered to these firms — indeed, may have played to their “flight to quality” strengths — the global tectonic shifts taking place as capital increasingly focuses on the East and the South and less on the West and the North, may mean their fundamental footprints need revisiting. (10% of Harvard Law School students in the class of 2015 are foreign-born.)
To answer that question requires looking quite a ways out, and having plausible forecasts about such things as the velocity of globalization, the probability of enduring regional conflicts or intermittent paralysis-by-terrorism, the long-run demographic trends on various continents, and more.
Since few possess that crystal ball, permit me to suggest where we seem to actually be in the market right now. I sense a potential generational divide. It’s not complicated: If I were 55 or 60 years old and a partner in one of these firms, I would instinctively, roundly, and rightly (so far as my own future is concerned) dismiss any of these worries. My effective time horizon is five or ten years, and all should be smooth sailing for at least that long (reputational markets are extremely sticky, if nothing else).
But if I were 40, with a time horizon of a few decades? Wouldn’t I be wondering, “What’s the plan here, guys?”
I don’t know about you, but that’s exactly what I would want to know. The problem is that the answer is far from obvious, but a bigger problem by far — if true of any of these firms — would be if they’re not thinking as hard as they can about answering that question.
* Our thoughts and prayers go out to the people of Oklahoma. [CNN]
* The IRS and the Treasury Department better watch out, because it seems that the “next logical step” for the tea party victims of heightened scrutiny leads right up the courthouse stairs. [ABC News]
* #Whatshouldwecallme after advising on the $1.1 billion Yahoo/Tumblr deal? Kind of a big deal. The Biglaw firms doing the underlying legal work are Simpson Thatcher and Gunderson Dettmer. [Am Law Daily]
* The Mirena MDL judge thinks female attorneys should be on the all-male executive committee. If this is “strategic gender placement,” the strategy is to look bad publicly. [Thomson Reuters News & Insight]
* The Travers Smith trainee who was fired for getting pregnant is due in court this June to find out what type of compensation she’ll receive for being discriminated against by the firm. You go girl! [Daily Mail]
* There’s trouble in paradise: lawyers in the Jodi Arias case unsuccessfully attempted to get a mistrial and withdraw from representation — for the second time — during its punishment phase. [Fox News]
As we mentioned in Morning Docket, the American Lawyer recently released its highly influential, closely watched Am Law 100 law firm rankings. They say that “slow and steady wins the race,” and with regard to economic recovery, Biglaw firms seem to have taken that up as their new motto.
Yes, partners are still living as large as they ever were, but their success now comes in the form of single-digit returns with regard to key financial metrics. The divide between the “haves and the have-nots” in the world of major law firms has grown to epic proportions, and some Am Law 100 staples have fallen out of the top hundred firms altogether. Welcome to the new normal.
Are you ready to get excited about “modest” and “spotty” gains across the board? Let’s dig in….
Well, now we know which firms were swimming naked after all. In fiscal 2012, The Am Law 100 … posted modest gains on all our key metrics. For gross revenue, revenue per lawyer, and profits per partners, the top 100 firms notched low single-digit year-over-year increases. But those averages belied the recovery’s unevenness. Only 76 firms reported gross revenue increases last year. And only 66 had profit per partner increases—down from 80 firms and 72 firms, respectively, on last year’s Am Law 100 list.
For the Am Law 100 as a whole, gross revenue rose by 3.4 percent (representing a new record), revenue per lawyer rose by 2.6 percent, and profits per partner rose by 4.2 percent. The firms in the top half of the Am Law 100 saw PPP grow by 8 percent, while PPP for the latter half fell by 3.3 percent.
Here are some quick highlights (from articles included in the issue):
1. There were five newcomers to the Am Law 100: Bracewell & Guiliani (this firm fell off the wagon last year; welcome back), Faegre Baker Daniels, Fragomen Del Rey Bernsen and Loewy, McKenna Long & Aldridge, and Ogletree Deakins Nash Smoak & Stewart. On the other hand, four firms dropped off the list: Barnes & Thornburg, Chadbourne & Parke (ouch; the firm had appeared on the list for nearly three decades), Cozen O’Connor, and Wilson Elser Moskowitz Edelman & Dicker.
2. Thanks to a gigantic contingency fee, Kilpatrick Townsend & Stockton was a firm that struck gold: “Gross revenue shot up to $44.5 million, a 12.3 percent increase. The top-line growth boosted revenue per lawyer to $735,000, a 16.7 percent rise that is The Am Law 100’s largest, while profits per equity partner rose to $860,000, a 36.5 percent jump that is The Am Law 100’s second-largest.”
3. Several firms saw double-digit increases in gross revenue, the largest of which (more than 12 percent) were at the following firms: Paul Weiss, Quinn Emanuel, Arnold & Porter, Baker & Hostetler, Hughes Hubbard, Kilpatrick Townsend & Stockton, Fragomen, McKenna Long & Aldridge (the largest increase of all — 23.4 percent), Bracewell & Guiliani, and Ogletree Deakins.
And now, without further ado, let’s take a look at the most important metrics of all: gross revenue, revenue per lawyer, and profits per partner….
Poor Wichita State, huh? The team was robbed of a finals appearance by a terrible held-ball call. The terrible call would have been more palatable if it weren’t for the fact that the NCAA should have known better than to put Karl Hess on that officiating crew. Hess made a team go the wrong way and shoot baskets for the opposing team earlier THIS SEASON. So color me unsurprised when Hess botched a call to end the game. So much drama.
Meanwhile, in the ATL March Madness bracket, we finally got some drama with some big upsets and close calls….
Wachtell remained safe, closing out the Dewey bracket. But its opponent in the Final Four will not be Cravath as many may have thought. Gibson Dunn, fresh off its defeat of top-seeded Cahill, whipped second-seeded Cravath by 12 points. Congratulations to Gibson for becoming the lowest-seeded participant in the Final Four. It may not mean much against the juggernaut that is Wachtell, but maybe there’s some magic left in this Cinderella.
Meanwhile the top seeds in the other half of the bracket both fell. Kirkland edged Quinn Emanuel by 9 votes — a .4% victory — to cut down the Brobeck nets. Down in the Heller region, Paul Weiss (briefly unfairly excluded because I mistyped the bracket into the polls last week), took out Sullivan & Cromwell by 8 points.
Voting closes for this round on THURSDAY, APRIL 11, at 11:59 PM (Eastern) to allow us to set up the Final matchup to run through next weekend.
Which firm has the brightest future?
Gibson (59%, 2,127 Votes)
Wachtell (41%, 1,499 Votes)
Total Voters: 3,626
Which firm has the brightest future?
Paul, Weiss (54%, 1,878 Votes)
Kirkland (46%, 1,605 Votes)
Total Voters: 3,483
For those interested in the final results from the Elite Eight round, they appear on the next page.
Well, the tournament has been a “shocker,” right? I know folks from Wichita State and they are psyched to flash inappropriate gestures on national TV for another round.
Sadly, Oregon got bounced out of the Sweet Sixteen, which made me a little sad, though not as sad as my whole bracket getting bounced when Indiana lost by double digits. I’d finally put my faith in the Big Ten and they repaid me with that?!?
In any event, the ATL bracket finally got some action too, with a couple of upsets. Including my beloved Cleary…
Here’s our updated bracket:
So the favorites on the right side of the bracket held serve, but the left side got some madness. Two-seeded Cleary falls to Simpson in a minor upset that makes me pour a little out for my old firm, but the dethroning of the Howrey region’s top-seeded Cahill is the big story. Gibson Dunn rolls into the Elite Eight, where it will face off against two-seeded Cravath.
In the Dewey region, we see a clash of transactional titans: Wachtell Lipton versus Simpson Thacher. In the Brobeck region, two litigation heavyweights duke it out: Quinn Emanuel versus Kirkland.
Just like with the real tournament, the schedule now gets tighter. Voting closes for this round on SUNDAY, APRIL 7, at 11:59 PM (Eastern).
UPDATE (3:25 p.m.): An earlier version of this post had an incorrect match-up in the Heller region. We have fixed the error and restarted the poll, which pits Sullivan & Cromwell against Paul Weiss (not Weil Gotshal, which S&C previously eliminated). We apologize for the error.
Which firm has the brightest future?
Wachtell (73%, 1,458 Votes)
Simpson (27%, 544 Votes)
Total Voters: 2,002
Which firm has the brightest future?
Gibson (56%, 1,416 Votes)
Cravath (44%, 1,130 Votes)
Total Voters: 2,545
Which firm has the brightest future?
Kirkland (50%, 1,096 Votes)
Quinn Emanuel (50%, 1,087 Votes)
Total Voters: 2,183
Which firm has the brightest future?
Paul Weiss (54%, 1,182 Votes)
Sullivan & Cromwell (46%, 988 Votes)
Total Voters: 2,170
For those interested in the final results from the second round, they appear on the next page.