As we noted in Morning Docket, there’s a new survey out about corporate America’s legal spending in 2013. As noted by Am Law Daily, the LegalView Index “is based on actual dollars paid by clients, not on surveys of law firms” — so perhaps it’s more reliable than many of the other studies.
What does the survey say? Here are some highlights:
There are only so many ways that we can tell our readers that the Biglaw boom years are over. Slow firm growth in terms of attorney headcount is now praised. Law firm mergers are common occurrences, if only because there’s always someone to save from a fate suffered like that of Dewey and the failed firms of yesteryear — Brobeck, Coudert, Heller, Thelen, and Howrey. Alternative fee arrangements are trending, and discounts are handed out as if clients are enrolled in fast-food loyalty programs (buy one multi-million dollar patent suit, get the next one 75 percent off!).
But just because the heyday is over does not mean that Biglaw’s all-stars are going to charge their clients any less cash. Back in the day, $1,000 per hour billing rates were considered obscene by some. Now, even in a still recovering economy, four-figure billing rates are just business as usual. In fact, some partners are edging closer and closer to a $2,000 per hour fee every day.
So which firms have the highest partner billing rates? Let’s find out…
* While we’re celebrating recently anointed Biglaw partner classes, let’s take a minute to call out the firms that haven’t bestowed the honor upon a single woman this year. Cheers, jerks. [Am Law Daily]
* The results of the NLJ’s Law Firm Billing Survey are out, and lo and behold, one of the top partners in the country is pushing $2,000 an hour for his services. Congrats, Ted! [National Law Journal (sub. req.)]
* Everyone’s buzzing about the federal law clerk who’s been accused of attempted aggravated rape and solicitation of a minor under 13. Don’t let that legendary 4.0 GPA go to waste. [Times-Picayune]
* Iowa is thinking about allowing law grads to practice ASAP instead of having to pass a bar exam. Paired with its recent tuition cuts, the Hawkeye State is looking better and better. [Des Moines Register]
* If you’re in the unfortunate situation of still having to look for a law job once OCI has ended, then you might want to start considering applying for some of the other law jobs that don’t want you. [Mashable]
Two weeks ago, I wrote about one of Biglaw’s most pressing issues: the failure of senior partners to pass along clients to younger partners. But that is not the only problem some of Biglaw’s senior partners are causing for their firms and the industry as a whole. Unfortunately, a measurable portion of senior partners, those of the august titles and stratospheric billing rates, are among the worst offenders of one of Biglaw’s most notorious shortcuts to extreme profitability: creative time entry and billing.
While I hate to acknowledge, even though I have seen it firsthand, that partners make up time entries wholesale for work never performed, it is not hard to realize that in this age of the multimillion-dollar partner there exists a tremendous incentive for such behavior. Or at least for partners to “round up” time entries, a tacitly accepted practice within Biglaw.
Incentives matter, and the more richly compensated a senior partner is, the more pressure there is on them to put down a solid four to five hours for “reviewing and revising” a draft brief on Tuesday, only to make a similar entry when they review a more robust version of the same brief a few days later. And because senior partners are frequently responsible for a horde of timekeepers below them, the tone set by the lawyers at the top of the pyramid has an impact on the behavior of those lower on the chain….
Ed. note: This is a new column from a person who didn’t just go from Biglaw to a smaller office, he went from big bad New York City to someplace where they care about the Big Ten network. It’s a different client roster and a different life.
As promised, the topic of this column is the difference in client service when you move to a smaller regional firm. First things first: I see from the comments on my last article that many of you are curious about the clients I represent here in Real America. Apparently it is very hard for some of you to believe that the types of clients that you have on the coasts also exist here in the Midwest. Believe it or not, we have banks! We have real estate investment trusts! We have life-science companies! We have parts manufacturers for any number of industries! We have mortgage servicers! We have large retailers with labor and HR issues!
And because these things exist, they need help from attorneys like us….
Partners versus associates in Biglaw. I am not referring to the annual end-of-summer softball game. This is more serious. Many groups are flat or slow. Even though associates leave firms and get replaced very slowly, or not at all, and even though incoming associate classes have shrunk, Biglaw firms make every effort to keep associates as busy as possible. For one, associates are expensive, with their high salaries and real benefits packages. Plus, it is always easy to generate some make-work for them, particularly when there are not as many around as there used to be.
These efforts are surely welcomed by associates, but at what cost to the firm’s other timekeeping employees — the partners? Does the fact that a partner “got elected,” has the title, signed a partnership agreement, and has money (either their own or a friendly bank’s) in the firm’s capital account mean that he or she should have first dibs on all available work? Put another way, do I have the right to insist that a fellow partner assign me work rather than an associate? Do I need to make sure my fellow partners are all fully busy before I assign some of my hard-earned client matters to them? Assuming that the clients do not care about who services a particular matter (e.g., it is a new client who only cares about the price and not who is providing the service), these are very difficult questions. Unfortunately for many in Biglaw today, they are also timely….
Is the slowdown in Biglaw that we’ve seen since the Great Recession a long-term trend or just a temporary blip? Only time will tell, but in the meantime, the debate rages on. (The latest salvo: New Republic editor Noam Scheiber’s response to critics of his controversial article, The Last Days of Big Law.)
Because of its power, prestige, and profitability, Biglaw gets a big proportion of the media coverage that’s aimed at law firms. But let’s not overlook small firms and solo practitioners, who make up about 70 percent of American lawyers in private practice.
One often hears stories about small firms, especially boutiques formed by ex-Biglaw attorneys, that are thriving. The tales are inspiring; the small-firm lawyers talk about how they enjoy their practice more, have greater autonomy, and make the same or even more money than they did back in Biglaw.
But such information is anecdotal. How are small law firms doing compared to bigger firms on a broader level? A new survey has some answers….
In fairness to DLA Piper, the craziness might not be that high on a per capita basis. DLA Piper is one of the largest law firms in the world. In the most recent Global 100 rankings, DLA took second place in both total revenue and attorney headcount.
Many of the DLA Piper stories are on the lighter side. But this latest one — involving serious allegations of overbilling, apparently supported by internal DLA emails saying things like “churn that bill, baby!” — is no laughing matter….
Over the last three weeks, we have heard from an In-House Insider, an opinionated source of insight into Biglaw-client relations — see here, here, here, and below. As with the three prior installments, the only changes I made to the Insider’s words were those done to protect their identity, and Insider was given the opportunity to revise their points once I added the questions and commentary. Again, I thank Insider for the candid observations and thoughtful opinions on these core issues….
AP: Any serious observer of Biglaw can see that firms continue to struggle adapting associate development to the new state of Biglaw-client relations. What can Biglaw learn from corporate clients like yourself on that front?
The evolution of relationships between the genders continues. Currently, in law firms, there is an interesting conundrum; balancing the desire for a gender-blind workplace where “the best lawyer gets the work and advances” and the reality of navigating the complicated maze created by the fact that, in general, men and women do possess differences in their work styles. These variations impact who they work with, how they work, how they build professional connections and how organizations ultimately leverage, reward and recognize the talents of all.
Henry Ford sat on his workbench and sighed. A year earlier, he had personally built 13,000 Model Ts with his own hands. Fashioning lugnuts and tie rods by hand, Ford was loath to ask for help. Sure, there were things about the car that he didn’t quite understand. This explains the lack of reliable navigation systems in the Model T. But Ford persevered because he knew that unless he did everything, he could not reliably call these cars his own.
“Unless my own personal toil is responsible for it, it may as well be called a Hyundai,” Ford remarked at the time.
The preceding may sound unfamiliar because it is categorically untrue. And also monumentally stupid. Henry Ford didn’t build all those cars by hand. He had help and plenty of it. Almost exactly one hundred years ago, Henry Ford opened up the most technologically advanced assembly line the world had ever seen. Built on the premise that work can be chopped up into digestible pieces and completed by many men better than one, the line ushered in an age of unparalleled productivity.
Today, an attorney refers business because he can’t do everything the client asks of him.
There are three reasons why this is way dumber than a made-up Henry Ford story…
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, 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.