So should Weil Gotshal associates be rooting against a government bailout of GM and the other big automakers?
GM bankruptcy –> more fees for Weil –> bigger bonuses (which WGM has not yet announced)?
UPDATE (1:00 AM): As of now, it looks like the auto industry bailout talks have failed. This makes a GM bankruptcy even more likely.
But even if GM does file for Chapter 11 (or even Chapter 7), thereby generating thousands of billable hours for Weil associates, it’s unlikely that Weil will pay out Skadden-sized bonuses (although the speculation sure is fun). As noted in the comments, Weil generally follows the market, and the market has settled around Cravath.
Paying above market could create problems for Weil. As one reader previously noted, “Weil will never be a bonus leader because there is concern at the firm that it would seem unsightly by the firm’s bankruptcy clients to lead the market with bonuses.”
That concern seems warranted. As GM director George Fisher told Bloomberg last week, “We are fearful, very fearful, of a prolonged [bankruptcy] proceeding that would just destroy our brand in the marketplace and therefore that is not considered a viable option…. These Wall Street geniuses and law firms are coming up with all these solutions that make them a lot of money.”
Some have wondered: Where was star litigator Dan Webb at Governor Rod Blagojevich’s bond hearing?
High-powered Winston & Strawn litigators Dan Webb and Bradley Lerman were not at Illinois Gov. Rod Blagojevich’s side when he appeared at a bond hearing on Tuesday. Blagojevich instead tapped Sheldon Sorosky, a lawyer from two-partner Chicago litigation shop Kaplan & Sorosky. Whither Winston & Strawn?
Illinois Gov. Rod Blagojevich owes more than $500,000 in unpaid bills to the law firm Winston & Strawn, his primary counsel since federal investigators began looking into various allegations of corruption five years ago. It is unclear whether the legal bills are for personal or campaign work, or for both. Campaign filings show Winston & Strawn had charged the governor’s campaign fund, Friends of Blagojevich, nearly $2 million in legal fees through the end of 2007.
“Friends of Blagojevich”: probably in short supply right now.
Atlanta-based King & Spalding is in talks to acquire most, but not all of Thacher Proffitt & Wood’s lawyers, say two sources aware of the discussions. In order to avoid dissolution, New York-based Thacher hopes to find a partner to acquire it, these sources say.
One New York legal consultant says the discussions have been ongoing for the past three to four months, and that the firms hope to reach an agreement by year-end. The consultant says King & Spalding is considering taking on about 100 of Thacher’s 195 lawyers, but that it’s not yet clear which practices and offices the 100 lawyers would come from. “There’s a tremendous amount of uncertainty about who’s going to be invited to the party,” says the consultant, who asked not to be named.
Not sure we’d call it a “party.” But the alternative to a K&S acquisition isn’t appealing:
[Thacher's] overall headcount is down more than 100 lawyers compared to last year — and so are its profits. Profits per partner fell more than 22 percent in 2007 to $1.02 million, according to the Am Law 200.
The firm has had a constant stream of high-profile departures, including its vice chairman Thomas Leslie, who decamped for Greenberg Traurig in October, and Washington managing partner Richard Schaberg, who left for Hogan & Hartson’s D.C. office last month. The New York consultant and another individual familiar with the discussions say that if the deal falls through, Thacher Proffitt will likely go under.
It’s worth noting that TPW has placed its New York headquarters up for sublease (as reported by Lindsay Fortado and David Levitt of Bloomberg). If TPW is seeking a subtenant for all five floors it leases at Two World Financial Center, then one has to wonder if the firm plans to continue operations (at least in its current form).
As for King & Spalding, it’s growing strategically, despite the downturn. The firm recently snagged three energy partners from Kirkland & Ellis. KS hopefully has room in the lifeboat for Thacherites seeking a new home.
Marc Dreier, the jailed New York law firm founder, must remain in prison while he fights charges that he swindled hedge funds, a federal judge ruled after a prosecutor accused the lawyer of stealing $380 million.
“The evidence does appear to show an enormous risk of flight,” U.S. Magistrate Judge Douglas Eaton said at a bail hearing today in Manhattan federal court for Dreier, namesake of the New York law firm Dreier LLP.
Dreier, 58, was arrested on Dec. 7 on U.S. charges that he persuaded two unidentified hedge funds to give him more than $100 million by claiming, falsely, that he was selling at a discount notes issued by New York developer Sheldon Solow. He was arrested after returning to New York from Toronto, where he had been briefly jailed for impersonating a lawyer at the Ontario Teachers Pension Plan.
Last year, we reported on a nice perk for Cravath associates abroad: a hefty cost of living allowance, which had junior associates in London making over $300,000.
It looks like the half-Skadden mentality has made its way across the Atlantic. From a tipster:
Cravath Swaine & Moore cuts its COLA in the London office from $110,000 to $60,000 as of January 1, 2009. [A]ll the associates, one after one, where called into the office of a partner, Philip Boeckman, to receive the news. The reason mentioned for the cut is the evolution of the dollar-pound exchange rate.
The COLA is the same for all associates in London regardless of the level of seniority. The COLA gets paid together with the base salary on a bi-weekly basis.
That’s a big cut for the 20 associates in the London office. Before the COLA was raised to $110,000 last year, it was at $85,000.
Clearly the firm’s partners have now got wise. This week associates were hauled in one by one and told that the COLA would be reduced by $50k from 1st January, in response to weakness of Sterling. One associate complained to RollOnFriday that this comes on top of bonuses being halved and the ski weekend being cancelled, and says that these measures “pretty badly affect associate morale”. OK, no one likes to get less wedge – but low morale because of only getting £40k to live in London, when everyone else is being made redundant? Bring out the violins.
The other side of the pond just got a lot less attractive.
It’s December, and the bills are due. But many firms are finding clients reluctant to pay up. The American Lawyer reports that firms are having a tough time recovering any money from the graveyard of busted 2008 deals:
Firms that were working on one of the many deals or financings that have been postponed or terminated may never get paid for the significant hours they did log. That’s because in most instances, law firms don’t get paid until a deal closes….
When a deal fails, the law firms generally don’t have a contractual right to any money. And that can make for messy negotiations. These days most firms don’t want to drive too hard a bargain with clients they want to hold on to.
“If it’s an ongoing client we may be a bit more generous,” says one partner. “We’ll ask them to pay us a fraction of the fees, but there’s an understanding that when the market turns around they owe us.”
While the broken-deal fee will always be subject the dance between rainmakers and their clients, fees for litigation and general corporate work should be freely flowing. Right?
For matters billed on a regular basis, like standard corporate work and litigation, firms stand on firmer ground, although payment isn’t assured this year. September was particularly scary, says Jay Zimmerman, the chairman of Bingham McCutchen.
“Even the best clients were holding payment,” he says. “Everybody was sitting on cash and we had a build-up in receivables.” Since then, he says, the money has been flowing in fairly normally. “The September bills did get paid. October turned out to be very good and November is looking very good.”
The “stuff” flows downhill. Clients stiff firms, management stiffs associates, associates stiff… law school loan officers? Why not? We can’t be that far away from the “Fight Club scenario,” in which everybody gets their credit rating set back to zero.
Whoops. I’m not supposed to talk about Project Mayhem.
In September, we reported that the average pay of in-house attorneys was on the rise. At the time, we said:
Mock in-house counsel if you want to (and apparently many of you “want to”), but those jobs still pay great money. A new study says that the average pay for in-house attorneys is $236,000.
Yesterday, the Incisive Media group released a study showing the other side of the equation. The cost to run an in-house legal department has risen by ten percent over the past year.
The median internal cost of operating an in-house law department at a large company grew to $381,618 per lawyer, a 10 percent increase over the previous survey year, according to the 2008 Law Department Metrics Benchmarking Survey. Lawyer compensation and benefits, the biggest component of internal expenditures, was up 14 percent to a median of $356,205 per lawyer for these same law departments.
Great news, but are they hiring? More after the jump.
Pop quiz hotshot. You’re a law school dean who has been given 24 hours to resign or you’ll be removed. What do you do? What. Do. You. Do?
This was the ultimatum given to (former) Duquesne Law School Dean Don Guter. The Pittsburgh Post-Gazette reports that Guter was more than surprised by the move:
Reached today, Mr. Guter said he was given without explanation the option to resign in 24 hours or be removed.
“My reaction to this is shock. The school — really by a lot of people’s accounts, not just mine — has never been in better shape,” he said.
The ABA Journal underscores the apparent randomness of the Guter’s ouster:
[Guter] says he was offered no explanation for the loss of the dean’s job, and a university press release, which confirms that he is being replaced on an interim basis by constitutional law professor Ken Gormley, also does not provide any reason for the change, according to the newspaper.
* The American Constitution Society for Law and Policy is on the rise, but keeping in mind lessons learned from Bush and the Federalist Society. [New York Times]
* If your firm is still holding a holiday party, folks will likely be drinking hard. Recessions tend to have that effect. Here are some tips on dealing with the inappropriate behavior sure to result. [New York Post]
* Princeton University ends its six-year legal saga with Robertson heirs by agreeing to pay out $100 million. Nonprofits everywhere should take notice, as settlement marks the need to abide by the pesky intentions of donors. [Washington Post]
* No Chrysler Chapter 11 work for Sidley AustinJones Day. [Ed. note: Too many bankruptcies to keep track of!] For now. The $14 billion aid package for the car industry got the House’s stamp of approval, but still needs love from the Senate. [Reuters]
* Miami judge in trouble for using children in a game of ping pong. [Miami Herald]
* Musical chairs: Sullivan & Cromwell snatches Donald Korb, chief counsel of the Internal Revenue Service. [BLT]
It’s final exam time again and the ATL community is always happy to help. Now more than ever, good grades are essential to getting the Biglaw job of your dreams.
If you are a future SCOTUS clerk, getting good grades is simple. You’ve already read everything and know everything and sacrificed all manner of human connections: finals will be a breeze.
But for the rest of you out there, now is the time for useful exam tips. I never liked to read “cases” or “go to class” as the kids say, but I take tests like a Jedi master. Here are some helpful ways for you to get great grades even if you have put forth negative effort throughout the semester.
1. You can learn a lot in eight hours.
An eight hour take home exam is like doing a book report based on its well adapted movie. You might miss some of the finer details, but all of the important points are right there in front of you. With the starting point of eight hours and a reliable outline, you’ve got your B right there. Never allow yourself to think that there is any question or issue that cannot be sufficiently read up on in eight hours.
2. Organization > Studying.
Don’t waste a second of your study time learning (or God forbid “memorizing”) any fact about anything. Instead make sure you organize all of the information you have so that you can quickly find it during the exam. Your “exam map” should contain simple notes like “Shoe – Minimum Contacts – Pg 268.” Anything more is an utter waste of time and energy. See point 1.
Jiminy jillickers! ATL editors are going all over the place over the next month or so. Or at least all over the Eastern Seaboard. If we aren’t heading to your neck of the woods on these trips, never fear, we may hit you up on the next time around. We’ve already hit up Houston, Chicago, Seattle, San Francisco, and Los Angeles in the past year.
Kinney Recruiting’sEvan Jowers is currently in Hong Kong for client meetings and still has a few slots available through October 22. Evan will also be in Hong Kong November 14 to December 15. Further, Robert Kinney has been in Frankfurt and Munich this week and is available for meetings with our Germany based readers.
One of our key law firm clients has referred us to one of their important clients in the US, Europe and China – a leading global technology supplier for the auto industry – in order to handle their search for a new Asia General Counsel and Asia Chief Compliance Officer.
Kinney is exclusively handling this in-house search.
This position will have a lot of responsibility and include supervision of eight attorneys underneath them in the Asia in-house team. The new hire will report directly to the global general counsel and global chief compliance officer, who is based in the US. The new hire’s ability to make judgement calls is going to be as important as their technical skill set background.
The position is based in Shanghai and will deal with the company’s operations all over Asia and also in India, including frequent acquisitions in the region.
It is expected that the new hire will come from a top US firm’s Shanghai, Beijing or Hong Kong offices, currently in a top flight corporate practice at the senior associate, counsel or partner level. Of course, the candidate can be currently in a relevant in-house role.
The JOBS Act created new tools for companies to publicly advertise securities deals online. As a result, thousands of new deals have hit the market and hundreds of millions in capital has been raised, spurring a wealth of new business development opportunities for attorneys.
Fund deals, startup capital raises, PIPE deals and loan syndicates are just a handful of the transactions benefiting from the JOBS Act. InvestorID FirmTM is a platform designed to help attorneys equip their clients with the workflow, marketing and compliance tools to publicly solicit a securities offering online. By providing clients with the tools to painlessly navigate the regulatory landscape of general solicitation, InvestorID FirmTM helps attorneys add value above just legal services.
The Jumpstart Our Business Startups Act (JOBS Act) went into effect in 2013 and permits Regulation D offerings of securities to be advertised publicly. This means that funds and companies can now use social media, emails and web sites to market transactions to new “accredited” investors.
However, with these new powers come new pain points. InvestorID FirmTM provides a secure, fully hosted, cloud-based platform with a breadth of tools for your clients, including: