We’ve seen this story before. A firm experiences a dip in profitability, then starts losing key partners (or reverse the order if you like; falling profits and defecting partners go hand in hand). Worried about its survival, the firm starts seeking out a white knight, in the form of a merger partner. And then….
Well, that depends. Sometimes a merger partner is found and the combined firms live happily ever after. Sometimes a merger partner is found and the combined firms suffer together, with the weaker firm effectively giving the stronger firm the “cooties.” And sometimes no merger partner is found at all; the troubled firm goes down, and rival firms swoop in like vultures to pick off the top practices and rainmakers. We can all think of examples of each scenario.
* Two Biglaw firms and their even bigger revenue meltdowns: Patton Boggs and Bingham McCutcheon have posted the most dramatic revenue declines revealed thus far by Am Law. [Wall Street Journal (sub. req.)]
* Dewey know why this malpractice case is being brought against an ex-LeBoeuf Lamb partner? You know your case is screwed if one of the questions the judge asks you is “[W]hy are you here?” [Am Law Daily]
* Those who remain at Heenan Blaikie, the imploding Canadian Biglaw firm, are pretty “pissed off” they haven’t received word on their severance packages. So much for that “orderly wind down,” eh. [Law Times]
* Career alternatives for former Biglaw attorneys now allegedly include breaking and entering and assaulting state delegate’s wives. We’ll probably have more information on this juicy story later today. [NBC29 WVIR]
The prominent lobbying and law firm recently announced the closing of its office in Newark, New Jersey. Discussing the move with Politico, managing partner Edward Newberry said, “We’ve lit intentionally a forest fire, we’ve controlled that forest fire. While we’ve lost a few people over the last year, who are good friends and good partners, our firm is much stronger today than it’s been in a long time.”
The firm has lost “a few people” over the last year? How about roughly 100 attorneys, representing 20 percent of lawyer headcount, plus an unknown number of staff? With additional prominent partners said to be eying the emergency exits?
Law firms have been in a “slow growth” phase ever since the nation began its recovery from the Great Recession. As we mentioned when we discussed the 2013 Am Law 100, “success now comes in the form of single-digit returns with regard to key financial metrics,” with Biglaw gains described as “modest” and “spotty” across the board.
Big-name lateral hires can sometimes bring in enough positive publicity and fanfare to make even the sickest of firms seem like the very picture of health and vitality. According to the latest American Lawyer Lateral Report, those lateral moves can be likened to a peacock’s tail: they offer “no advantage” for a firm’s ultimate survival, and may hinder the firm in the future. It happened at Dewey, and it can happen at other firms if they’re not careful. If only partners’ attentions weren’t so easily grabbed by the promise of higher profits.
So if this growing reliance on lateral hiring is truly capable of destabilizing law firms, wouldn’t you like to know which firms did the most lateral hiring over the past year? We’ve got the details for you….
* Kansas Law School has been fined and censured by the ABA for recruiting violations surrounding Andrew Wiggins. Wait, no, I got that wrong. KU Law started an LL.M. program without asking, which I’m sure they did only because Wiggins is from Canada. [Topeka Capital-Journal]
* The proposed merger between Patton Boggs and Locke Lord has been called off. Fingers crossed that Bendini Lambert is the next target for Locke Lord. [Am Law Daily]
* Mayor Bloomberg swears at his last set of judges. I mean swears “in.” Man, who gets up this early? [NYC.gov]
* President Obama commutes the sentences of eight inmates convicted of crack-cocaine offenses. [New York Times]
* Did EA know Battlefield 4 would kind of suck before they released it? [Techspot]
* So evidently R. Kelly isn’t “trapped” in the closet, so much as he’s hiding there waiting for your daughter to come home. [The Root]
* Here’s your homework for today: everybody has to go find a dispirited Duck Dynasty fan and patiently explain to him or her the difference between a government infringement on free speech and a network momentarily suspending a bigot. You’re not allowed to punch the fans, you can only use words, and if necessary, hand gestures. [Huffington Post]
* An inside look at the jury deliberations in the recent insider trading trial of Michael Steinberg of SAC Capital. [New York Times]
Let’s not mince words: Patton Boggs is stuck in the muck. In the most recent Am Law 100 rankings, the firm showed a 15 percent decline in profits per partner — one of the biggest dips in the entire survey, contrasting with the modest growth that most of Biglaw enjoyed. Gross revenue also fell, by 6.5 percent.
The Am Law 100 rankings looked at 2012 performance compared to 2011 performance. Perhaps things have improved for Patton Boggs in 2013?
Alas, no. While many firms have resorted to voluntary buyouts or layoffs of support staff this year, few have laid off lawyers (at least not openly). But Patton Boggs has already been through two significant, open and notorious rounds of layoffs in 2013 to date, affecting not just staff but lawyers as well.
How is Patton Boggs trying to save itself, and will its plan work?
It was just two weeks ago that we told you about the merger talks between Patton Boggs and Locke Lord. At the time, we wondered about redundancies between the two firms’ offices. We thought that “most jobs” would be safe, considering the fact that there were only three overlapping locations.
Well, it looks like we were dead wrong. Guess which firm just laid off both support staff and lawyers?
Ed. note: This is the latest installment in a series of posts on lateral partner moves from Lateral Link’s team of expert contributors. Today’s post is written by Michael Allen, the Managing Principal of Lateral Link, who focuses exclusively on partner placements with Am Law 200 clients.
Merger season has arrived, yielding a fruitful harvest of potentially enormous mergers between Patton Boggs and Locke Lord and between Pillsbury and Orrick. Perhaps the most interesting aspect of these mergers is the potentially “super” practice groups these mergers will make.
Patton Boggs has recently undergone a period of mild strife, as we detailed several months ago. Though they lost a significant number of energy and environmental attorneys after the fallout of the Chevron litigation, this merger with Locke Lord could be effective not only as a stopgap, but could also vastly strengthen each firm’s energy department….
As reported in Morning Docket, it looks like there’s another big merger in the offing. While it might not create a new top 10 mega-firm like the proposed Pillsbury and Orrick union, if the rumored merger talks between Patton Boggs and Locke Lord come to fruition, it would join one of the major players in energy law with one of the most influential lobbying shops in D.C.
Sounds like a deal rife with “synergy” and all those other corporate buzzwords.
And this may not be the only deal Patton Boggs is looking at….
* Hot on the heels of news about Pillsbury’s talks with Orrick, we’ve got the scoop on yet another possible law firm merger. Patton Boggs has the urge to merge, and Locke Lord seems pretty receptive. [Reuters]
* Three people who were optimistic about law school graduated with three very different results. One has a job, one is unemployed, and one failed the bar. Sadly, this seems pretty standard. [National Law Journal]
* Lat’s going to be on vacation this week (lucky him), but while he’s gone you can check out his review of a new novel set in a law firm, The Partner Track (affiliate link) by Helen Wan. Enjoy! [Wall Street Journal]
* A judge denied the NCAA’s motion to dismiss Ed O’Bannon’s antitrust lawsuit, noting everyone could “suck her dicta” concerning the Supreme Court’s notion that players cannot be compensated. [ESPN]
* Jodi Arias wants to fire Kirk Nurmi, her lead attorney, claiming in a 12-page handwritten motion that he has an “utter poverty of people skills.” Her words hurt as much as her stab wounds. [Arizona Republic]
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: firstname.lastname@example.org.
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.
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