What is the future outlook for Biglaw? The Magic 8 Ball is not optimistic.
Last month, we wrote about a less-than-cheery report from Citi Private Bank’s Law Firm Group, the largest lender to U.S. law firms. The bottom line of that report for law firms: “With weak demand growth and the continuation of expense growth, it is likely that expenses will continue to grow at a faster pace than revenue, squeezing margins and making it tricky to achieve even low single-digit profit growth.”
As we mentioned in Morning Docket, there’s a new report out from our friends at Citi, and it also sounds pessimistic notes. It concerns the confidence levels of law firm managing partners.
What are the powers-that-be in Biglaw worried about right now? Let’s find out….
He’s going to Disney World? No, not this veteran M&A lawyer….
Let’s say you graduated from a leading college, summa cum laude, and from an elite law school, also summa. You began your legal career as a transactional lawyer at one white-shoe law firm, where you made partner. You left that firm for investment banking, where you encountered significant success. Then you returned to the legal world, first as an M&A partner at one top firm, then at another. At your final firm, you served as global co-chair of the firm’s renowned mergers and acquisitions group, working on some of the biggest deals around the world.
Then, in your 70s, you decide to leave your firm and also the legal world. Where would you go next?
Today we have news of another lawyer leaving the Chicago office of Sidley. But this departure reads more like a mystery novel than a memoir. Let’s find out who’s leaving, even if we don’t yet know why….
Biglaw lawyers behave badly sometimes. And Biglaw lawyers sometimes use travel as an excuse to behave badly. But no one likes to talk about the bad things they see their colleagues do. It is bad for business, especially since it is the rainmakers that usually behave the worst. Bad behavior is usually just ignored, and only gets revealed as confirming evidence of a former colleague’s failings — if and when the firm decides enough is enough and cuts ties with the evildoer. Sometimes that never happens, and the sociopath becomes a “firm leader.” Biglaw is a business, after all, and powerful people need to get away with the things powerful people decide they are entitled to do. So Biglaw lawyers and staff generally keep quiet.
When I was an associate, I was lucky enough to work with pretty decent people. Even though I did a lot of work traveling, with a variety of senior attorneys, I was never exposed to any behavior that was out of line. Back at the office, there usually was a spate of gossip following partner retreats, but that was tame stuff. To be honest, a group of pasty old partners hitting a strip club, or some millionaire partner sitting at the ten-grand-a-hand blackjack table, did not strike me as that scandalous. Especially when I was exposed in the office to blatant overstaffing of matters, do-nothing partners and associates “reviewing” things, and similar other profit-drivers that normal people would consider theft. (My firm was not so bad on the padding front; other firms I saw from cases I was on were far worse. But that is a discussion for another time.)
There was one time, however, when I saw openly unprofessional behavior, perpetrated by a pretty important Biglaw figure no less. And I kept quiet about it, despite the temptation to email Lat and expose what I saw. Now that I have this platform, I still intend to protect the identity of the Biglaw figure that I saw with my own eyes publicly debase his or herself and our shared profession. Why? For the sake of his or her family, clients, and firm. And for Biglaw — we don’t need more scandals, especially stale ones. And when there is innocent collateral damage to consider, I think it best to keep my mouth shut. If this person’s fate is to be exposed for other indiscretions, it will happen. Going by the lack of discretion they exhibited publicly (which I witnessed with my own eyes), there is a good chance they feel immune. Maybe they are. We’ll see — and I have no doubt that if things ever catch up to them, ATL will be there to capture the happenings.
I’ve been known to quip, “I thought I was wrong, once, but I was mistaken.” But I realize that my column here on Above the Law has often been “wrong” in at least one important way: I’ve compared apples to oranges.
For example, I authored a “top ten” list of differences between working in a big firm and working in a boutique. But many of the items focused on differences between employee and owner. I compared working where “you get paid either a salary or an hourly rate” with “running your own shop.” I compared “making all the decisions in my cases” with “waiting for a partner to act on my recommendations.” I compared doing the grunt work with making the important decisions.
That strikes me as comparing apples to oranges because all those comparisons actually contrasted being an employee with being an owner. That fundamental distinction accounts for many of the supposed differences between working in Biglaw and working in a small firm or boutique.
But what about associates who are considering becoming associates at a small firm or boutique? That’s the true apples to apples comparison. If you’re not starting your own business, but will instead remain an associate, what are the real differences when moving “From Biglaw to Boutique”?
* Dewey know if Citibank is planning to sue other former D&L partners over their capital contribution loans? According to one court document filed by Luskin Stern & Eisler, the bank’s counsel, the fun has just gotten started. [Am Law Daily]
* Unlike the voter ID laws in Texas and South Carolina, the Department of Justice has approved New Hampshire’s law of the same ilk. Apparently hippies from the “Live Free or Die” state are incapable of discrimination against minorities. [CNN]
* Arizona, on the other hand, can discriminate against minorities all the live long day — for now. A federal judge ruled that the “show me your papers” provision of S.B. 1070, the state’s strict immigration law, may be enforced. [Bloomberg]
* The latest argument raised in the case over the Mongolian Tyrannosaurus Bataar skeleton is that the bones are actually a “Frankenstein model based on several creatures.” This movie is getting boring. [WSJ Law Blog]
* “[T]he state of New York doesn’t get to be a dance critic.” We’re sure that any man would gladly tell the New York Court of Appeals that lap dancing is a form of art, but should it enjoy a tax exemption? [Associated Press]
Isn’t Jewel v. Boxer a great case name? Doesn’t it sound like one of the classics of the 1L curriculum, right up there with Pierson v. Post, Hawkins v. McGee, and International Shoe?
It is definitely a case that lawyers ought to know. This appellate decision, handed down by a California court in 1984, remains the leading case on how to divvy up attorneys’ fees generated by cases that were still in progress at the time of a law firm’s dissolution. Dewey care about this case? Absolutely.
But Jewel might not maintain its status as the key precedent on so-called “unfinished business,” at least if one judge has anything to say about it. Check out an interesting ruling that just came down from the Southern District of New York, arising out of one of the biggest Biglaw bankruptcies of recent years….
As we mentioned in the Labor Day edition of Morning Docket, there’s some interesting news on the Dewey & LeBoeuf front. The one former Dewey partner being sued by Citibank for allegedly defaulting on a capital loan — energy lawyer Steven Otillar, now a partner in the Houston office of Akin Gump — is opposing Citi’s attempt to collect on the debt, by arguing that he was “fraudulently induced” to borrow the money in question.
How much are we talking about? How does the debt compare to Otillar’s compensation while at Dewey? And what are Otillar’s specific allegations about “fraudulent inducement”?
I recently met a young-ish female in-house counsel. She was a Biglaw refugee, married with an eye to starting a family, who had jumped at the chance to go in-house rather than submit to the particular pleasures of the partnership push. We got to talking, and while my instinct told me to go into sell mode, I decided to play things more coolly. A lot of active listening on my part ensued, as I was subjected to various and sundry complaints about life as a female Biglaw associate, followed by a discourse on how much better in-house life was. I kept the conversation light, injecting some shots at Biglaw (these met with laughter and approval), while letting her do most of the talking. I was consciously avoiding acting like a Biglaw partner, or showing any interest in her because of her status as potential client.
Things became interesting when she started discussing her dissatisfaction with her current outside counsel. Various and sundry became a litany, as she complained about the male partner’s inattention to her, the sloppy work of the female associate she was dealing with, and the size of the bills. Most importantly, she complained of feeling unappreciated by the Biglaw firm she was using — and suspected that the lawyers working for her actually hated her. She did not want to feel hated. I can’t blame her — nor would I be shocked if she switched firms in the near future.
We eventually parted ways, but like a good Biglaw partner, I followed up with an email and my contact info. The email differed from what I would send a male in-house counsel after an introductory meeting. My email to the in-house lawyer was much less formal, and was actually jokey — but I wanted to stick with what was apparently working in terms of getting her to open up to me. It worked, as she replied right away with a joke of her own, and warm acknowledgement of how it was good to meet. Looking good — until I decided to experiment with something….
Hey, have you read Above the Law for like one single minute in the past month? If so, you probably know that we’re having this big blogger conference on March 14th at the Yale Club. Yeah, the Yale Club. You’ll be able to recognize me: I’ll be the only big… blogger guy surreptitiously holding a can of crimson spray-paint.
Speaking of coming, you should come. We’ve got CLE and all that. Click here to buy tickets to get CLE credit for listening to bloggers scream about stuff on the internet.
To refresh your memory, details on the panel that I’m moderating — almost entirely sober, mind you — follow.
My panel is called Blogs as Agents of Change, and we’re going to talk about whether all of these spilled pixels are actually making a difference. You know my view… just ask Lawrence Mitchell, but here are the panelists:
So you spent a considerable amount of time courting, selling and maybe even doing some friendly stalking of that attractive lateral partner candidate with a sizable book. After he or she ignored your emails and didn’t return your calls, a few weeks go by and you read a press release in the legal media announcing the recent move to a competing firm.
Rats. Another one got away from you. You cringe when you consider how much time was spent in meetings that did not bear fruit. Your heart aches when recall how you were led to believe this was a marriage made in heaven.
You have been rejected.
The sting of rejection is painful, even for fancy law firms. But you need to find a way that you can turn this disappointment into a legitimate learning experience.
No, this isn’t a pre-party before we come back next fall for the real thing. This IS the real thing. Quinn Emanuel is pushing the envelope on recruiting. The party is now. This is when you meet the partners and associates face to face. This is when we begin the dance that could land you an offer for your second summer BEFORE school starts in the fall.
First: You come to the party. Second: If you like us, you send your resume after June 1, 2014. Third: If we like each other, you get an offer.
We’re not waiting for fall. We’re not doing the twenty minute thing. This party is the real thing!
We hope you’ll join us, and look forward to meeting you.
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