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.
* Hot on the heels of the SCOTUS stay, Utah has ordered its state agencies not to recognize any of the same-sex marriages that took place. Eww, Utah, you are being disgusting right now. [NBC News]
* The eminently quotable Chancellor Leo Strine of the Delaware Court of Chancery has been nominated to serve as chief justice of the state’s highest court. Best of luck with your confirmation! [Chicago Tribune]
* Law firm mergers rose by almost 50 percent after 88 firms joined forces throughout 2013 (a new record, according to Altman Weil). Let’s see if this year’s pace is as frenzied as last year’s. [Am Law Daily]
* The legal profession isn’t very good at diversity, especially in Texas. Here’s a not-so fun fact: just six percent of all equity partners at the largest law firms in Dallas are minorities. [Dallas Business Journal]
* “[I]t was the first time he had ever heard of someone being killed by a pair of underwear.” A man in Oklahoma was tragically killed after becoming the first-ever recipient of a fatal atomic wedgie. [News OK]
* A Supreme Court whose members are still afraid of using email will most likely have the final say on the NSA case, one of the biggest technology and privacy rulings in ages. Well, that’s comforting. [Talking Points Memo]
* Pittsburgh firm Buchanan Ingersoll & Rooney is reportedly in merger talks with Tampa firm Fowler White Boggs. Boy, a merger between two firms from lackluster cities sure sounds promising. [Daily Business Review]
* Law professors are completely outraged by the ABA’s proposal to cut tenure from its law school accreditation requirements. Quick, somebody write a law review article no one will read about it! [National Law Journal]
This is my first column of 2014, so I’m due to join the ranks of those who make predictions for the coming year.
But my predictions will be slightly different from others, because mine will be based on fact.
In the last months of 2013, I heard that two different law firms had reduced partners’ draws to offset the firms’ poor financial performance. At least one of the firms reduced draws retroactively — announcing near the end of the year that partners’ salaries would be reduced as of January 1, 2013 (which slices partners’ incomes dramatically in the last few months of the year). Both firms shared the pain among all partners — folks suffered in the equity and non-equity ranks alike. (This is a particularly nasty trick to play on income partners: “Here’s your partnership deal: If the firm does better than expected, you’re a mere income partner; of course you will not share the wealth. On the other hand, if the firm performs worse than expected, we’ll permit you to share the pain, and we’ll cut your pay. Here’s the partnership agreement! Sign right here on the dotted line!”)
I’ve now been in-house for four years, and my ear has lifted pretty far from the law-firm ground: If I heard about two law firms suffering from such terribly bad years that they were forced to reduce their budgets as year-end approached, then I’m guessing that many more than two firms suffered this fate. This means that, for many firms, 2013 was not a good year, which leads me to my predictions for 2014 . . . .
As reported in Morning Docket, the year is quickly drawing to a close, and two large law firms may be getting ready to celebrate their future together in 2014. Sources say that Blank Rome and Nixon Peabody have the urge to merge, and they’ve supposedly been in talks for two months or more.
The last three proposed Biglaw mergers we reported on — McKenna/Dentons, Pillsbury/Orrick, Patton Boggs/Locke Lord — fell apart, but if the Blank Rome/Nixon Peabody combination comes to fruition, their union would create one of the top 50 largest firms in the U.S. (number 33, to be exact).
Will they or won’t they? Let’s discus the details…
* Exciting news: Justice Sonia Sotomayor will be leading the countdown on the New Year’s Eve ball drop in Times Square. She’ll be the first SCOTUS justice to perform the task. You go girl! [New York Times]
* Blank Rome and Nixon Peabody are reportedly in merger talks, but one firm’s managing partner says he “talk[s] to firms all the time,” it’s no big deal. No word on what guys from his high school do. [Reuters]
* Sorry, Quinn Emanuel, but this limited discovery thing is going to happen. Judge Ronnie Abrams recently slapped down the firm’s attempt to appeal her MTD denial in this contract attorney’s suit. [Am Law Daily]
* A state court judge from Texas stands accused of strangling his girlfriend over the balcony of his apartment and threatening to “f**king kill [her].” Romance in Texas has certainly got some of that je ne sais quoi. [Dallas Morning News]
* A legal soap opera? An ex-prosecutor whose relationship with a judge landed her lover in hot water was found dead in her home hours after a judicial misconduct ruling came down. R.I.P. [Reno Gazette-Journal]
* Take a look back at the legal profession’s year that was: from the highest of highs in gay marriages to the lowest of lows in law school enrollment, 2013 was a year for the record books. [National Law Journal]
* In November, Supreme Court justices engaged in the “totally unnecessary” practice of releasing 41 pages of nondecision opinions. In all fairness, we can’t really blame them for enjoying hearing themselves speak. [National Law Journal]
* These D.C. Circuit judges of differing political viewpoints “disagreed less than 3 percent of the time” over the course of two decades. Please, keep arguing about the court’s “ideological balance.” You’re accomplishing lots. [New York Times]
* With more tie-ups than ever before and another record broken, 2013 is officially the year of full-blown law firm merger mania. Query how many more we’ll be able to add to the already huge list of 78 by the end of December. [Am Law Daily]
* Speaking of which, Baker Hostetler is merging with Woodcock Washburn, an intellectual property firm with a name that sounds like the aftercare instructions for a painful sex toy injury. [Philadelphia Inquirer]
* Of course a fired ADA’s scandalous emails landed on BuzzFeed. This is one more embarrassing chapter in the Brooklyn District Attorney’s Office’s terrible, horrible, no good, very bad year. [New York Times]
* It’s amazing how things can change in a year. In 2012, New York bar pass rates for in-state schools fell. In 2013, they’re up — except for one school, which is way down. Which one? [New York Law Journal]
* The right to choose… to drive out of state? SCOTUS rejected an application to block Texas from enforcing a law requiring abortion doctors to have privileges at nearby hospitals. [New York Times]
* Patton Boggs should prepare for the day when Locke Lord is too busy washing its hair to go on a date. The would-be merger is just one of many “interesting opportunities” the firm is considering. [Am Law Daily]
* Law firm merger mania, mid-size Midwest edition: Chi-Town law firm Shefsky & Froelich merges with Cincinnati-based Taft Stettinius & Hollister. [Crain's Chicago Business]
* When it comes to law faculty hiring, it doesn’t matter what color your skin is or what you’ve got between your legs, so long as your résumé is covered in Ivy and you’re dripping with prestige. [National Law Journal]
* Ave Maria School of Law is in need of a new dean. It seems the man who created the school’s “Advanced Critical Thinking Department” engaged in deep thought before deciding to call it quits. [Naples Daily News]
If you’re hiring a lateral partner at this level, then quality is assumed….
If you’re using Bigg & Mediocre, then quality is assumed….
If you’re hiring only from the top ten percent at the top ten schools, then quality is assumed….
Let me start again:
By the time you get to major league baseball, quality is assumed.
Right. But I’d rather have Babe Ruth than a journeyman outfielder.
We instinctively realize that, in every endeavor known to man, there are true superstars. But, when we talk about lawyers, we somehow assume that they’re all fungible. Or, in the examples I just gave, that all the lawyers within a certain rarefied group are fungible. That’s just not true. There’s quality, and then there’s real quality. In the words of Arthur Schopenhauer: “Talent hits a target no one else can hit; genius hits a target no one else can see.” Talent is nice; genius is better.
If you’re with me so far, then you don’t believe that all law firms are created equal; you don’t believe that all lawyers (or partners) within a single firm are created equal; and you understand that many law firms are basically incapable of true quality control….
So you spent a considerable amount of time courting, selling and maybe even doing some friendly stalking of that attractive lateral partner candidate with a sizable book. After he or she ignored your emails and didn’t return your calls, a few weeks go by and you read a press release in the legal media announcing the recent move to a competing firm.
Rats. Another one got away from you. You cringe when you consider how much time was spent in meetings that did not bear fruit. Your heart aches when recall how you were led to believe this was a marriage made in heaven.
You have been rejected.
The sting of rejection is painful, even for fancy law firms. But you need to find a way that you can turn this disappointment into a legitimate learning experience.
No, this isn’t a pre-party before we come back next fall for the real thing. This IS the real thing. Quinn Emanuel is pushing the envelope on recruiting. The party is now. This is when you meet the partners and associates face to face. This is when we begin the dance that could land you an offer for your second summer BEFORE school starts in the fall.
First: You come to the party. Second: If you like us, you send your resume after June 1, 2014. Third: If we like each other, you get an offer.
We’re not waiting for fall. We’re not doing the twenty minute thing. This party is the real thing!
We hope you’ll join us, and look forward to meeting you.
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.
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