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?
As was vividly demonstrated by our recent infographic, Biglaw’s summer associate classes have undergone a major and seemingly permanent contraction. For the most part, large — arguably bloated — summer associate classes are a thing of the past. Among the Am Law 50, only eight firms are bucking this downward trend, with actual increases in the size of their summer classes since 2007. These firms are a collection of Wall Street’s oldest and most elite white shoe mainstays: Sullivan & Cromwell, Cravath, Davis Polk, and their ilk. On average, these firms were founded 112 years ago (i.e., during the McKinley Administration). The outlier here is the relative upstart litigation powerhouse Quinn Emanuel, founded only back in 1987.
Besides the durability and strength that comes with such a refined pedigree, what other trends are apparent in this great downsizing of Biglaw’s summer associate classes?
The results of the annual American Lawyer midlevel associate survey are out, and it looks like people have been taking happy pills. We thought things were going well last year, but this time around, it’s all lollipops and double rainbows for third-, fourth-, and fifth-year associates. According to Am Law, these happy campers gave their firms the highest composite scores the publication had seen in almost 10 years.
These associates have good reason to be happy. They’ve secured and maintained jobs at elite firms while entry-level hiring has been swirling down the drain. Spring bonuses have come and gone, but they’ve managed to stick it out. They’ve seen the rise and fall of Biglaw empires. They’ve seen the worst of the profession’s worst, and still, they’ve survived it all. They have the right to be happy.
Of course, not everyone is as thrilled. For the first time, American Lawyer measured gender differences in question responses, and women are markedly less satisfied with their jobs than their male colleagues. Considering how difficult is is to gain entry to the Biglaw boys’ club, who could blame them?
Enough idle chatter, let’s delve into the details of the survey and discuss the results…
We’ve just entered August, so you know what that means: the start of on-campus interviewing season. If you’re a law student researching firms or a lawyer involved in your firm’s recruiting efforts, check out Above the Law’s law firm directory, where law firms get letter grades in different categories. Law firms might look alike on the surface, but there are very real differences between them, as our grading system reflects.
For example, law firms diverge when it comes to diversity. While every firm gives lip service to diversity, some firms have the goods to back up their claims, while others do not.
Let’s check out the latest diversity rankings, from two different news outlets, to see which firms are truly diverse….
Ed. note: This is the latest installment in a series from Bruce MacEwen and Janet Stanton of Adam Smith Esq. and JDMatch. “Across the Desk” takes a thoughtful look at recruiting, career paths, professional development, human capital, and related issues. Some of these pieces have previously appeared, in slightly different form, on AdamSmithEsq.com.
There seems to have been a spasm an unusual concentration of articles recently advancing the theory (I generalize) that all is well in BigLaw and that in fact even the universally acknowledged cost/benefit mismatch of a J.D. degree is mistaken.
Regular readers know that I’m the last person to be apocalyptic about the legal industry writ large, but I also would like to believe I apply rigor in analysis and tough love in attitude, so when sloppy happy talk comes front and center. I feel compelled to respond.
Law schools first. I haven’t really entered the “Law school NPV—positive or negative?” debate, and I don’t plan to start. It’s of enormous import on many levels, from the tragic human toll to the socioeconomic policy questions it raises. It’s simply a bit far afield for me to give it the attention it deserves. And I’m not going to do a half-baked job. Still, for the yin and yang of this debate, I refer you to (first pro and then con):
For many law schools, the bidding process for the upcoming on-campus interview season closed yesterday. In bidding, schools quite reasonably advise students to select potential employers that align with their aspirations and geographic preferences. For example, the section of the Duke Law web site devoted to OCI admonishes students to “thoroughly research” potential employers and to “focus only on employers in whom you are genuinely interested and that match your career goals.” Presumably, one career goal shared by all law school graduates is to eventually be free of debt. As previously and repeatedly noted, for most, a Biglaw associate position is the only employment outcome which gives the graduate a plausible prospect of paying off his student loans.
So what shapes student perception of large law firms and drives the decision of the law student in prioritizing their OCI bids? No doubt there are unique versions of received wisdom that get passed from generation to generation of students at every school. And of course there are plenty of media entities measuring firms against one another: revenues (AmLaw), “prestige” (Vault), practice area prowess (Chambers) and so on. This being the time of year where Biglaw careers are just starting to be built, we thought it would be interesting to look at how students themselves rate law firms. Which firms are the law student favorites?
[I]n today’s environment, averages mislead more than ever. If anything is true about law firm performance in the post-Great Reset era, it’s that dispersion has never been wider. We have more highly outperforming winners and more poorly underperforming laggards.
But if you want to generalize? Out of ‘alive, well, and rich,’ the evidence seems to support one for three.
The 2012 Biglaw numbers are starting to trickle in. The American Lawyer (and the rest of the legal press) follows a near-uniform format in reporting them. Revenues — up or down x percent. Profits per partner — slightly to moderately up (if your executive committee was unable to generate higher profits, via financial sophistry or good-old de-equitizations or stealth layoffs, I am very sorry). Revenue-per-lawyer, slightly up. Feel-good comment by managing partner. Slightly passive-aggressive commentary by a “legal consultant.” Repeat, on a daily basis for about a month, until the Am Law 100 (and “interesting” Am Law 200 firms as well) is covered.
As a partner, you obviously hope your firm is reporting good news, even though the likelihood of that news reflecting on your personal situation is pretty low for most Biglaw partners. No one wants to be associated (or own the obligations of) a loser, and when everyone is proclaiming “modest” or “respectable” growth, the peer pressure can be tremendous. Especially where the Biglaw death spiral is a recognized phenomenon, and firms who report poor performance in a generally positive climate are quickly judged negatively, like a figure skater stuck doing double lutzes when everyone else is knocking out triples. Outliers, for good, but mostly for bad, stick out, and their ignominy is frequently paraded on these pages. With bonus Lat commentary for additional effect.
I for one, enjoy reading this kind of reportage…..
To date, we’ve received nearly 8,000 responses to our ATL Insider Survey. Among other things, our survey poses this question to law firm lawyers: “If you had the chance to do it all over again, would choose to work for your firm?”
Unsurprisingly, those who answer “yes” tend to highly rate their firms in such areas as compensation, culture, and training. For those that wish they could take a Mulligan when it comes to their choice of employer, the inverse is true. Here is a comparison of ratings scores (on a scale of 1-10) for the various aspects of law firm life, broken out by responses to the “Mulligan” question:
Culture and Colleagues
Hardly counterintuitive stuff, we know, but it allows us to use the “Mulligan” response as a proxy for overall happiness/satisfaction, as it’s so broadly predictive of the nature of the individual’s assessment of his firm.
Back in April, we shared our survey findings showing that Davis Polk was the top firm when it came to morale (to date, this holds true.) Today, we look at whether there are notable differences regarding satisfaction based on practice area. If we slice our survey data by practice, we find that there certainly are. So after the jump, let’s look at how practice groups stack up against one another in terms of the happiness of its practitioners….
The world keeps getting smaller, but the law firms keep getting bigger. The American Lawyer magazine just announced its Global 100, the world’s 100 largest law firms in terms of total revenue, and Biglaw seems bigger than ever.
Despite the challenging economic climate, law firms continue to grow. In three key categories — revenue, profits per partner, and attorney headcount — the top firm for 2012 boasts a bigger number than last year’s #1 firm….
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 six years. You can reach them by email: [email protected].
Since late last year, things have been booming in Hong Kong / China in cap markets, especially Hong Kong IPOs. M&A deal flow has recently been getting a bit stronger as well. Although one can’t predict such things with any certainty, all signs are pointing to a banner entire 2014 for the top end US corporate and cap markets practices in Hong Kong / China. This is not really new news, as its been the feeling most in the market have had for a few months now and things continue to look good.
The head of our Asia practice, Evan Jowers, has been in Hong Kong for about 10 days a month (with trips every other month to both Shanghai and Bejing) for the past 7 months (Robert Kinney and Evan Jowers will be in Hong Kong again March 15 to 23), and spending most of his time there meeting with senior US hiring partners at just about all the major US and UK firms there, as well as prospective candidates at all associate levels and partner levels, and when in the US, Evan works Asia hours and is regularly on the phone with such persons, as our the other members of our Asia team. Our Yuliya Vinokurova is in Hong Kong every other month and Robert is there about 5 times a year as well. While we have a solid Asia team of recruiters, Evan Jowers will spend at least some time with all of our candidates for Asia position. We have had long standing relationships, and good friendships in some cases, with hiring partners and other senior US partners in Asia for 8 years now.
Are you challenged by the costs and logistics of maintaining your office, distracting you from the practice of law?
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:
Everyone is talking about the importance of Social Media in Corporate America. But it is relatively safe to say that most law firms and lawyers are slightly behind the social curve. Most lawyers, at minimum, use LinkedIn, for networking. Some even use Twitter for pushing out short, pithy content, while many have Blogs, where they write their little hearts out. The adage “it is better to give than to receive” is not always true though in the world of Social. In the Social World – it is best to listen, give back and engage.
Social Media is a communications tool that can deeply educate you about the needs and wants of your clients and prospects when used in conjunction social media monitoring and sharing tools.
Take this quick quiz and see if you know how to use Social to help you engage more with your clients or to better service the ones you have.