We’re more or less done with our series of posts profiling various “secondary” legal markets. We thought about putting up the Portsmouth thread that some trolls commenters have been demanding, but we decided against it after reading this.
So now we’re going to loop back to a city that we previously covered, to wit, Miami. We have a news hook for this post: a recent story, from the Daily Business Review, about how 2006 treated South Florida’s top law firms.
More details about this market, after the jump.
Partner Profits
On the list of law firms that have moved their associates up to the $160K pay scale, one of the most conspicuous omissions is Jenner & Block. As we wondered in a prior post: “What’s Up With Jenner & Block?”
As it turns out, “About twenty equity partners. Toe-up.” From today’s National Law Journal:
Jenner & Block, a litigation-focused firm, is shifting between 15 and 20 of its equity partners to nonequity status this year with some being asked to leave the firm and a smaller number moving voluntarily toward retirement, according to people familiar with the discussions.
The firm’s management last month began to move forward with the plan to cut some of the equity partners during the next year or two, the sources said.
Jenner has never before taken such a step that affected so many equity partners, they said. The firm has 185 equity partners, according to a list of the highest-grossing law firms published last month by The American Lawyer, an NLJ affiliate.
Lots of Jenner associates have been clamoring for a pay raise. But in light of the partner de-equitizations, is this a case of “Be careful for what you wish for, you might just get it”? Could raising associate salaries exacerbate the problems that led Jenner to steal a page from the Mayer Brown playbook?
On the other hand, the partner purge could be viewed more charitably. Is Jenner & Block dumping deadweight partners to pave the way financially for raising associate salaries? In a recent memo, the firm hinted at “changes in our associate compensation structure.”
We’ll have more about Jenner in a subsequent post, focused on the plight of associates rather than partners. If you have anything you’d like to contribute, please email us (subject line: “Jenner and Block”). Thanks.
Jenner & Block Will De-Equitize Partners [National Law Journal via Law.com]
Earlier: Nationwide Pay Raise Watch: What’s Up With Jenner & Block?
Nationwide Pay Raise Watch: A Jenner & Block Memo
- Biglaw, Harriet Miers, Law Firm Mergers, Locke Liddell & Sapp, Lord, Bissell & Brook, Mergers and Acquisitions, Partner Profits
Law Firm Merger Mania: Locke Liddell + Lord Bissell
By David LatThe latest Biglaw combination brings together more “L”s than you can shake a stick at. From the Texas Lawyer:
Locke Liddell & Sapp, based in Houston and Dallas, and Chicago-based Lord, Bissell & Brook have agreed to merge, and will form a 700-lawyer firm named Locke Lord Bissell & Liddell.
Hmm, that’s a mouthful — the marketing people might want to rethink things. The alliteration and internal rhyme make the firm name far too “busy.”
Correction: Based on the comments, it appears that we’re wrong about the internal rhyme. But we still think the new firm name is unwieldy.
Some reactions to more substantive aspects of the deal, after the jump.
Continue reading “Law Firm Merger Mania: Locke Liddell + Lord Bissell”
Earlier this week, we reported on the unexpected early promotions of four corporate associates at Cahill Gordon. According to various comments, the four soon-to-be partners, whose promotions will take effect in July, are Doug Horowitz, Corey Wright, Bill Miller, and Jonathan Frankel.
As some speculated, this quartet was promoted early to prevent them from leaving for greener pastures. Here are more details:
The way it apparently went down is that all 7th and 8th year litigators were sat down individually by a partner and told, a week or so ago, that 7th and 8th year corporate associates — corporate associates only — were going to be voted on this summer. The given reason was to prevent these people from leaving to go to i-banks.
Litigators were apparently told that they should not consider this to be a negative commentary on their value to the firm, and that they would be considered in the normal course, either end of this year (8th years) or end of next (7th years). Their chances of making it were described as “the same as they were yesterday.”
It’s my understanding that there is a growing rift between corporate and litigation at the firm. Each group — partners included — increasingly resenting the other. Corpies think litigators are lazy, don’t have to work nearly as hard for the same amount of money. Litigators resent being treated as second-class citizens.
Very interesting. Some food for thought:
1. Several top law firms have struggled to deal with the problem of star associates leaving for investment banks, hedge funds, and other opportunities in the world of finance. Will other Biglaw shops start employing this strategy of early promotion to retain their best associates? Could we be witnessing the start of a trend?
2. According to conventional wisdom, corporate lawyers generally have “better” — or at least more lucrative — exit opportunities than litigators. As a result, law firms face more outside competition for them. Could we eventually see a system in which partnership tracks are shorter for corporate associates than for litigation colleagues, in reflection of the different markets for the two practice areas?
Please feel free to discuss in the comments.
Earlier: Some Premature Promotions at Cahill Gordon?
With apologies for the lack of details — if you have more to share, please email us — we’ve learned of some interesting news at Cahill, Gordon & Reindel:
2. All four are in the corporate department.
3. Two of the four new partners are seventh-years, which makes their promotions very early — a year and a half ahead of schedule. The firm historically has had an eight-year partnership track.
ATL congratulates this quartet of soon-to-be millionaires. A Cahill Gordon partnership is quite a nice prize. According to the recently released AmLaw 100 rankings, Cahill is the sixth most profitable law firm in the country, with profits per partner (PPP) of $2,575,000.
As noted above, if you have more info — e.g., the names of the new partners, why Cahill promoted them ahead of time, etc. — please email us (subject line: “Cahill Gordon”). Thanks!
Update: More information is available here.
- Biglaw, Cleary Gottlieb, Cravath, DLA Piper, Money, Partner Profits, Shearman & Sterling, Skaddenfreude
Skaddenfreude: So How Much Do Partners Actually Take Home?
By David LatWe’re all very familiar with the average profits-per-partner figures that are published as part of the AmLaw 100 law firm rankings. But since they’re just averages, they do raise some obvious questions:
– What’s the average take-home pay for a typical Biglaw partner?
– How much do newly minted, junior partners earn, compared to the most senior or most highly compensated partners of a large law firm?
– How much can superstars with enormous books of business rake in?
Information that goes a significant way towards answering such questions appears in this fascinating article, by Andrew Longstreth for the American Lawyer. You should read the whole thing for yourself; it’s socioeconomic voyeurism at its best.
A few excerpts, and some quick thoughts from us, appear after the jump.
Continue reading “Skaddenfreude: So How Much Do Partners Actually Take Home?”
- Biglaw, Money, Partner Profits, Robins Kaplan Miller & Ciresi, Skaddenfreude, Wachtell Lipton, Wiley Rein
Skaddenfreude: Wiley Rein Dethrones Wachtell Lipton as America’s Most Profitable Biglaw
By David LatLet the wailing and gnashing of teeth begin. The AmLaw 100 rankings — The American Lawyer’s closely watched, annual listing of the hundred largest law firms in the United States, ranked by revenue — are now available.
We’ll have more to say on the rankings later. Their release is a big story, deserving of multiple posts. They’re like the U.S. News and World Report law school rankings, but for the world of Biglaw, and they can be viewed from many different angles. Although the firms are ranked by revenue, the rankings are accompanied by other juicy data — including information about profits per partner.
For the time being, here’s the “money quote,” quite literally, from the WSJ Law Blog:
Wiley Rein broke the record for the highest profits per partner ever recorded by the magazine — $4.4 million. Why? The Washington, D.C., law firm represented patent-holding company NTP in its nearly five-year legal battle with RIM, and earned more than $200 million in fees from the case. It received approximately one-third of the $612.5 million settlement that RIM agreed to pay NTP to avert a potential court-ordered BlackBerry shutdown. The firm also shortened its name from Wiley Rein & Fielding after Fred Fielding left the firm to become White House counsel.
So New York’s Wachtell Lipton, which has sat atop the profits-per-partner rankings for many years, has been displaced. Interestingly enough, though, Wiley Rein didn’t beat Wachtell by THAT much, considering the massive contingency fee it received from the RIM-BlackBerry settlement. Wiley Rein had PPP of $4,435,000; Wachtell Lipton had PPP of $3,975,000.
(And if you look at the chart for Compensation — All Partners (subscription), WLRK still comes out on top, with $3.975 million per partner. Wiley Rein has a two-tier partnership, so its Compensation Per Partner figure, which reflects compensation paid to non-equity as well as equity partners, is only — only! — $2.7 million.)
The Wiley Rein windfall reminds of when Robins Kaplan got that huge, one-time payout for its tobacco-related work. In the AmLaw 100 rankings for 2000, based on 1999 revenue and profit figures, the Minneapolis-based firm boasted profits per partner of over $3 million — beating Cravath and all the other New York shops that year, except for Wachtell.
Do you have any juicy, AmLaw 100-related gossip? Tales of shameless attempts to manipulate the rankings? Stories about unhappy partners ranting over their firm’s placement over this morning’s coffee? Please send ‘em our way.
A table and links, after the jump.
We reported on the rumors last week — and now the news is official. From the New York Law Journal:
Just as Weil, Gotshal & Manges welcomes back legendary bankruptcy partner Harvey Miller, the firm is saying goodbye to four other restructuring stars who are leaving to join a rival firm.
Cadwalader, Wickersham & Taft is set to announce today that it has recruited George A. Davis, Deryck A. Palmer, John J. Rapisardi and Andrew M. Troop as partners in New York. The move, involving four of Weil Gotshal’s most prominent bankruptcy partners apart from Miller and practice co-heads Martin Bienenstock and Marcia Goldstein, points to a major realignment among elite bankruptcy practices.
In our post from last week, we had all of the names except for Troop.
Our tipster chalked up the move to the departing partners’ desire “to swim in Bob Link’s shark tank and make the big $$$.” The NYLJ piece seems to confirm that:
[Deryck Palmer] praised Cadwalader’s famously performance-driven culture, where top partners are rewarded handsomely and weaker ones are winnowed out.
“Cadwalader provides an environment where every lawyer can achieve their potential,” said Palmer.
And their dream of a house in the Hamptons, too.
Earlier: Musical Chairs: Weil Gotshal — In With the Old, Out With the New?
In case you haven’t seen it already, we’d like to call your attention to an update and correction to our last post about Mayer Brown Rowe & Maw’s decision — announced on Friday afternoon — to “de-equitize” 45 equity partners:
The premise of this post — that Mayer Brown intentionally tried to “get out in front of” this story — is incorrect. Our facts were correct, but our interpretation of them was erroneous.
It is factually accurate to state that the Chicago Tribune story [about the partner terminations and demotions] hit the web before Mayer Brown sent out the announcement email to its associates. It is also true that Mayer Brown representatives spoke with the Chicago Tribune about this news before the firm-wide email went out.
But there’s a backstory here that needs to be explained. We’ll have more to add in a subsequent post.
We now deliver the promised backstory. Check it out after the jump.
Continue reading “Mayer Brown Rowe & Maw-ling: A Bit of Backstory”
UPDATE / CORRECTION: The premise of this post — that Mayer Brown intentionally tried to “get out in front of” this story — is incorrect. Our facts were correct, but our interpretation of them was erroneous.
It is factually accurate to state that the Chicago Tribune story hit the web before Mayer Brown sent out the announcement email to its associates. It is also true that Mayer Brown representatives spoke with the Chicago Tribune about this news before the firm-wide email went out.
But there’s a backstory here that needs to be explained. We’ll have more to add in a subsequent post.
FURTHER UPDATE: The subsequent post describing what actually happened appears here.
********************************
One of the rules of so-called “crisis management” is to “get out in front of” bad news. The reasoning is that if you try to cover up bad news, you’ll just make matters worse. So you should just announce the bad news, take your lumps, and try to move on as quickly as possible.
Mayer Brown tried to get out in front of the news that it was axing 45 equity partners, which it announced earlier this afternoon — a Friday afternoon, which is when such things get announced. It apparently told the Chicago Tribune about the news before making a firm-wide announcement to its associates.
This may have taken “getting out in front of bad news” too far. It can be demoralizing for your employees to hear about something that affects them after (or even through?) the news media.
But this was clearly an announcement that was made with the media in mind. The internal memo that was sent around at Mayer Brown even included contact information for the firm’s communications team.
If Mayer Brown was going to be so forthright about this news, and basically throw open its kimono, why didn’t it just “go all the way” — and post a news story or press release on its website?
You handed a bunch of unprofitable geezers their walking papers. So what? That’s the way the Biglaw works in this day and age. You don’t attain profits per partner in excess of a million by coddling the useless.
Own it, people — own it!!!
Mayer Brown cuts 45 partners in restructuring [Chicago Tribune]
Mayer Brown Purging 45 Partners [WSJ Law Blog]
Earlier: Mayer Brown Rowe & Maw-ling: Firm Drops Ax on 45 Equity Partners
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