Partner Profits

Dewey & LeBoeuf: gone but not forgotten.

We recently learned that Justice Antonin Scalia is not a fan of women cursing. What would he make of partners at a leading law firm cursing?

And not just garden-variety cursing, but rather colorful deployment of highly profane language. As Hamilton Nolan of Gawker puts it, “The biggest law firm collapse in history began with ‘f**kwad’ emails.”

Which former Dewey & LeBoeuf partner referred to various former partners as “pathetic,” “little prick,” and “f**kwad”? Let’s take a look at James Stewart’s New Yorker magazine article on what caused Dewey’s demise….

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If the Houston office of Weil Gotshal & Manges ends up shutting down in the wake of the recent partner defections, management in New York might not shed a tear. In fact, it might have been part of their master plan.

As one Weil source told us, the Houston litigation defections were “not a surprise,” since the June layoffs “took away all but one assistant and all of the associates. The associates that were allowed to stay were switched to contract positions and have since left. Basically, it was an elimination by New York of the Houston group from the bottom up.”

Dallas, however, is a different story. It’s more of a standalone office, with a more diversified mix of practices, and it makes a bigger contribution to the firm’s bottom line.

But the latest partner departures do raise serious questions about its future. Which Dallas partners just left, and where are they going?

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Last Friday, we broke the news of four partners in Houston leaving the powerhouse firm of Weil Gotshal & Manges. This news came just a week after eight partners in Dallas announced their move to Sidley Austin.

In today’s episode of “As The Weil Turns,” we’ll reveal the identities of the Houston defectors, then explore the possible reasons for their leaving Weil….

(Please note the multiple UPDATES at the end of this story.)

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Use of the verein structure: all the Biglaw cool kids are doing it. Okay, well maybe not the coolest kids, at least if “cool” is tied to profits per partner and prestige. But there’s no doubt that the verein structure is spreading rapidly throughout Biglaw.

This is partly because firms that use the verein form are fond of combining with other firms. If the talks between Dentons and McKenna Long bear fruit, the resulting entity will surely be a verein, like Dentons and its constituent firms.

But does the verein structure present ethical problems for the firms that employ it? Two observers of the legal profession believe it does….

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For all the talk of layoffs and worries over an unstable legal economy, Biglaw just keeps getting bigger. Today, the American Lawyer magazine announced its Global 100, a ranking of the world’s 100 largest law firms in terms of total revenue. The view from the top is simple: as we learned from the 2013 Am Law 100, slow and steady does win the race, because Biglaw is at the biggest it’s been in years, and partners’ profits are headed up, up, up.

Now that we’re on the long road to recovery following the recession and collapse of the U.S. financial markets, there are some lessons to be learned from the past five years. Some firms were able to cash in modestly on their success, while other firms buckled under the pressure and were forced to close their doors for good. The game of musical chairs in the top 10 of the Global 100 reflects this economic uncertainty.

DLA Piper is the new top dog in terms of total revenue. Which firms are the leaders of the pack in other metrics, such as profits per partner and attorney headcount?

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It seems that Weil Gotshal & Manges enjoys the title we recently bestowed upon it: “the reigning drama queen of Biglaw.” The juicy news and novel plot twists just keep on coming.

For those of you just tuning into “As The Weil Turns,” here’s a quick recap. Last week, eight prominent partners left Weil’s Dallas office for Sidley Austin. There was lots of speculation for what motivated the move. The Boston office of Weil instituted an unusual policy for raising attorney morale. Weil in Houston lost another partner to a rival.

Today brings more news: fresh partner departures from Houston, additional drama out of Dallas….

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“Who shot J.R.?” That was the question that everyone (hi Mom!) was dying to know on the wildly popular prime-time soap opera of Dallas.

“Who drove out Yvette Ostolaza?” That’s the question everyone is dying to know on the wildly popular prime-time soap opera of Weil Gotshal.

Okay, “drove out” is probably not the right phrasing here, for reasons we’ll explain below. But there’s no denying that people are keenly interested in the drama surrounding the departure of eight Weil partners to Sidley Austin in Dallas.

Let’s take a closer look at the situation, shall we?

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Some of our older readers may, like me, remember the television show Dallas. This deliciously dishy, prime-time soap opera was packed with suspense, drama, and conflict.

Suspense, drama, and conflict have also haunted the high-powered law firm of Weil, Gotshal & Manges this year. In June, the firm conducted major layoffs, which shocked the legal world due to Weil’s profitability and prestige. In April, Weil lost some prominent litigation partners to Quinn Emanuel in D.C., amid significant controversy.

So it’s fitting that today’s juicy story comes from the Dallas office of Weil Gotshal, which just lost a slew of partners to a rival firm under interesting circumstances….

(Please note the various UPDATES added to the end of this post.)

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Partner, can you spare a dime?

Last week, we discussed the first part of an interesting essay by former managing partner Edwin Reeser that appeared in the ABA Journal. Today we’ll tackle part two.

Are you still depressed after reading in-house lawyer David Mowry’s recent reflections on the legal profession? If so, maybe stop reading here and come back later.

But if you’re willing to wallow, on this Friday the 13th and Yom Kippur, venture beyond the jump….

double red triangle arrows Continue reading “Biglaw Today: ‘Looking For Change In All The Wrong Places’ (Part 2)”

Missing: multiple midlevels

Even though there’s significant excess capacity — meaning too many lawyers chasing too little work — I am hearing the concern that there aren’t enough midlevel associates.

Dan DiPietro, chairman of the Citi Private Bank Law Firm Group, offering an explanation as to why he thinks Biglaw firms want to increase headcount in this time of economic stress. In the latest Law Watch Managing Partner Confidence Index Survey, law firm leaders’ overall confidence level was lower than it has been since last year at this time, with expectations for profits and revenues also on the decline. The only area where their confidence rose was in expectations for hiring associates and equity partners.

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