Perhaps there’s no cause for worry right now. Things are going just as my colleague Elie Mystal predicted: “You’re going to get your money. My prediction: an extra $10,000 to $20,000 depending on class year, starting with third-year associates. It might be announced really late, end of February or early March, once firms realize they need to keep their talented midlevels.”
We’re getting the sense, based on anecdotal evidence showing up in our inbox, that law firms are quietly making cuts to the ranks of attorneys and staff. They’re doing so somewhat stealthily, however — in dribs and drabs, spread out over decent stretches of time, often invoking performance reasons. So we’re having a hard time obtaining enough information on any one firm to issue a report.
We need your help in keeping law firms honest. If you have layoff news to report, please send it our way, by email or by text message (646-820-8477 / 646-820-TIPS). As you’ve probably already noticed, we do not name our sources.
One firm that’s being commendably upfront about its reductions is Bingham McCutchen. This afternoon, the firm announced some staff layoffs….
Over the past few weeks, we’ve been receiving interesting reports about Dewey & LeBoeuf. They were nothing but vague rumblings for a while, but they’ve now reached the point where we have enough to write about.
So let’s check in and ask: How do things stand at this major, top-tier law firm? In other words, “Where’s LeBoeuf?”
If you think that making partner is like winning the Biglaw race, you haven’t actually been paying attention to what’s been happening to partners over the past few years. Sure, Biglaw partnerships overall are enjoying higher profits now than they were during the darkest days of the recession (while associate salaries remain stagnant, of course). But average “profits per partner” numbers can be misleading.
Steven Harper, the former Kirkland & Ellis partner turned law professor, writes that the income gap between the top earning partners and everybody else is “exploding.” It’s never been more lucrative to have a nice book of business.
* At least two firms probably won’t be handing out spring bonuses like candy this year. While gross revenue remained steady at Dickstein Shapiro and Crowell & Moring, PPP dropped at both firms. [Legal Times]
* Not-so breaking news: the Thirteenth Amendment applies only to humans. It seems like the only people who didn’t already know that were the lawyers PETA hired for their orca whale slavery case. [Washington Post]
* Washington has approved a bill to legalize same-sex marriage, and Governor Gregoire has vowed to sign it. Wedding planners can prepare for a fabulous summer season, and divorce practitioners can create a new niche. [CNN]
The conceit of this entire bonus season has been that the ridiculously low bonuses bar set by Cravath, Swaine & Moore was just an opening figure. People really didn’t expect that Cravath would halve bonuses. I mean, it’s CSM. They can count. Their profits went up. Why would they pay out 50% less than last year?
Well, I guess the answer “because they can” is going to have to be enough for Biglaw associates everywhere….
As we mentioned in Morning Docket, the Wall Street Journal has a good article about how various recession-era cutbacks have become entrenched in Biglaw. If you have been paying attention or are a current law student, you know the issues: smaller entry-level classes, stagnant salaries, and a partnership track long enough to make a first-year Ph.D. student laugh.
Basically, if you were already a Biglaw partner when the recession hit, you are likely to say, “What recession?” Your profits per partner have probably gone up, despite the general economy’s woes. Other industries use economic downturns to retool their business models and develop new ways to compete. Not Biglaw. It appears that Biglaw has used the recession to fire a bunch of people, exclude new partners, and keep associate salaries and bonuses at recessionary levels. They haven’t developed a new business model; they’ve just found a way to reduce the costs of the old business model.
Biglaw partner: It’s great work if you can get it. The WSJ even found one partner who was so busy loving himself and his life that he appears to be totally oblivious to the struggles of everybody else…
Last August, John J. O’Brien, who was once a highly regarded and well-liked partner in the celebrated M&A practice of Sullivan & Cromwell, pleaded guilty to four misdemeanor tax offenses. The charges of conviction were mere misdemeanors, but the amounts involved were large, as you’d expect from a well-paid partner at S&C.
O’Brien was accused of failing to file income-tax returns for tax years 2001 to 2008, on almost $11 million in partnership income. In the end, he pleaded guilty to failing to file taxes relating to $9.2 million in partnership income, for tax years 2003 to 2008.
Earlier today, John O’Brien was sentenced. The sentencing hearing provided some interesting additional information about why O’Brien acted as he did.
So is O’Brien trading Biglaw for the Big House? And if so, how long a sentence did he receive?
Despite the lukewarm job market, the lateral market for partners is going strong. Still, not all partner candidates are created equal. Whether you are trying to lateral to a big firm or a small firm, there are several considerations firms must analyze during the partner vetting process. Unlike the promotion of an internal candidate, a prospective firm does not have ready access to your employment file, does not know how you interact with co-workers, and has not seen you in real action.
On the flip-side, you do not know the internal politics of the firm, what the firm’s long-term strategic plan is, or if there are any potential conflicts with your clients. With all the unknowns, it will be the responsibility of the firm and the partner candidate to make sure all proper disclosures have been made to make sure both sides are compatible. If you are thinking about making a lateral move, check out the tips below, courtesy of the recruiters at Lateral Link….
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past seven years. You can reach them by email: email@example.com.
It’s that time of year again when JDs are starting to apply for 2L summer jobs and 2L summers are deciding which practice area to focus on.
For those JDs with an interest in potentially lateraling to or transferring to Asia in the future, please feel free to reach out to Kinney for advice on firm choices, interviewing and practice choices, relating to future marketability in Asia, or for a general discussion on your particular Asia markets of interest. This is of course a free of cost service for those who some years in the future may be our future industry contacts or perhaps even clients.
For some years now Kinney’s Asia head, Evan Jowers, has been formally advising Harvard Law students with such questions, as the Asia expert in Harvard Law’s “Ask The Experts Market Program” each summer and fall, with podcasts and scheduled phone calls. This has been an enjoyable and productive experience for all involved.
If you are considering a virtual law practice, you know that many of today’s solo firms started that way. But why are established, multi-attorney law firms going virtual?
Many small firms are successfully moving part—or even all—of their practice to a virtual setting. This even includes multi-jurisdictional practice spanning several states and practice areas, although solo and small partnerships are still the largest adopters of virtual law.
Can you do the same? The new article Mobile in Practice, Virtual by Design from author Jared Correia, Esq., explores how mobile technology bring real-life benefits to a small law firm. Read this new article—the next in Thomson Reuters’ Independent Thinking series for small firms—to explore how a mobile practice:
Reduces malpractice risk
Enables you to gather the best attorneys to fit the firm, regardless of each person’s geographic location
Leverages mobile devices and cloud technology to enable on-the-spot client and prospect communication
Transitioning in-house is something many (if not most) firm lawyers find themselves considering at some point. For many, it’s the first step in their career that isn’t simply a function of picking the best option available based on a ranking system.
Unknown territory feels high-risk, and can have the effect of steering many of us towards the well-greased channels into large, established companies.
For those who may be open to something more entrepreneurial, there is far less information available. No recruiter is calling every week with offers and details.
In sponsorship with Betterment, ATL and David Lat will moderate a panel about life in-house and we’ll hear from GCs at Birchbox, Gawker Media, Squarespace, Bonobos, and Betterment. Drinks, snacks, networking, and a great time guaranteed. Invite your colleagues, but RSVP fast, as space is limited.