With this year more than halfway done, let’s look in the rear-view mirror and survey managing partners’ confidence in the legal industry during the second quarter of 2014. Wall Street investors seem generally optimistic, at least based on the state of the stock market (despite today’s turbulence). Are law firm leaders similarly hopeful?
Survey says — well, nothing terribly exciting, but let’s have a look anyway….
D.C. is dysfunctional, as pundits constantly complain about. Has the lack of productivity on Capitol Hill expanded to affect the private law firms of Washington?
Perhaps. According to Citi Private Bank’s recent survey of law firm performance, which showed that the first half of 2013 was bad for Biglaw nationally, D.C.-based law firms did even worse than their counterparts in other cities.
The sky is not falling for the world of large law firms. But could Biglaw be a frog in boiling water? We can’t rule that possibility out just yet.
The latest report on law firm performance, focused on the first six months of this year, shows some signs of weakness. The numbers aren’t awful, but if Biglaw continues to travel down this path, it won’t wind up in a good place….
The first quarter of 2013 was not particularly kind to large law firms. There’s no crisis at hand, but things aren’t exactly great either, with demand registering as slightly sluggish.
Citi Private Bank’s Law Firm Group, which possesses great insight into the legal industry because of Citi’s role as a leading law firm lender, just released its quarterly survey of managing partners’ confidence. The results are consistent with the general sense of “meh” that we’ve been anecdotally picking up from partners we hear from….
I was recently chatting with a young litigation partner about how the year was going for his firm thus far. He confessed it was off to a sluggish start. He was not extremely busy himself, but he said that his colleagues on the transactional side were practically twiddling their thumbs.
He wondered: was this slowness specific to his firm, or was the legal industry in general not exactly going gangbusters? I shared with him my sense, admittedly anecdotal, that 2013 to date has been pretty “meh.”
Now we have actual data on the first quarter. My partner friend should be relieved. Misery loves company….
The legal economy right now is not unlike the economy writ large. People with small or non-existent paychecks are suffering, but those at the top are actually doing just fine for themselves.
This isn’t necessarily a bad thing; it might just be reality. As David Brooks put it in a recent New York Times column, “[t]he meritocracy is overwhelming the liberal project.” He argues that in our current, rapidly changing economy, people who are smart, well-educated, and hardworking just end up doing better and better for themselves — and there are practical limits on how much redistributive policies can “fix” this situation.
Sorry for that digression — back to Biglaw. Let’s take a look at how the rich are getting richer….
What is the future outlook for Biglaw? The Magic 8 Ball is not optimistic.
Last month, we wrote about a less-than-cheery report from Citi Private Bank’s Law Firm Group, the largest lender to U.S. law firms. The bottom line of that report for law firms: “With weak demand growth and the continuation of expense growth, it is likely that expenses will continue to grow at a faster pace than revenue, squeezing margins and making it tricky to achieve even low single-digit profit growth.”
As we mentioned in Morning Docket, there’s a new report out from our friends at Citi, and it also sounds pessimistic notes. It concerns the confidence levels of law firm managing partners.
What are the powers-that-be in Biglaw worried about right now? Let’s find out….
The fable of the ant and the grasshopper may have lessons for the world of large law firms.
As regular readers of Above the Law well know, most major law firms — with a fewnotableexceptions — did not pay spring or mid-year bonuses in 2012. Our associate readers generally viewed this news with disappointment, while our partner readers had less of a problem with it.
But perhaps even associates should have been supportive of their firms’ decisions not to pay spring bonuses. Storm clouds are gathering over the law firm world. So says a recent report by Biglaw’s biggest bankers, over at Citigroup….
* Johnson & Johnson will have to fix several factories after an agreement with the FDA prompted by massive product recalls. This still doesn’t explain why my bottle of Tylenol may contain tree nuts. [Bloomberg]
* Charlie Sheen hammered out a custody agreement With Brooke Mueller. That’s nice. [People Magazine]
* Texas may consider a law that would make losers pay attorneys’ fees. Easy, New York Mets. Not all losers. Just those who lose lawsuits. [New York Times]
* A discussion of the legal complaints lodged against the Wisconsin Legislature for Wednesday night’s votes. You know who’s not complaining? This guy. [Wisconsin State Journal]
* A former assistant attorney general from Maine was sentenced yesterday in a child porn case. This is definitely the year of the assistant AG. [ABA Journal]
Happy Birthday Nino
* Not all people living in Idaho are racists, duh. Some are gangsters from Boston. [New York Times]
* Law firm profits and productivity were up in 2010, while demand was flat and revenue was modestly up. Someone named Dan DiPietro and someone named Gretta Rusanow tag-teamed a report all about it. [Am Law Daily]
* A former McGuireWoods partner pleaded guilty to falsifying a tax document. [ABA Journal]
If you are considering a virtual law practice, you know that many of today’s solo firms started that way. But why are established, multi-attorney law firms going virtual?
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:
Reduces malpractice risk
Enables you to gather the best attorneys to fit the firm, regardless of each person’s geographic location
Leverages mobile devices and cloud technology to enable on-the-spot client and prospect communication
Transitioning in-house is something many (if not most) firm lawyers find themselves considering at some point. For many, it’s the first step in their career that isn’t simply a function of picking the best option available based on a ranking system.
Unknown territory feels high-risk, and can have the effect of steering many of us towards the well-greased channels into large, established companies.
For those who may be open to something more entrepreneurial, there is far less information available. No recruiter is calling every week with offers and details.
In sponsorship with Betterment, ATL and David Lat will moderate a panel about life in-house and we’ll hear from GCs at Birchbox, Gawker Media, Squarespace, Bonobos, and Betterment. Drinks, snacks, networking, and a great time guaranteed. Invite your colleagues, but RSVP fast, as space is limited.
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: email@example.com.
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.