Profits Per Partner

We have partner profits on the brain here at Above the Law. Earlier today, we wrote about a law firm that instituted a 20 percent holdback on partner pay — a move that was met with anger by some.

In that story, we noted the “continued expansion in the gap in power and pay between what we’d call ‘super-partners’ — partners in firm management and major rainmakers, who are often one and the same — and rank-and-file partners.” You can see this yawning chasm in the disparities in partner pay that exist within the same firm. As partner turned pundit Steven Harper has argued, partners aren’t true “partners” when they are paid and treated so differently.

New information from the American Lawyer shows how extreme some of these gaps between partners have gotten….

double red triangle arrows Continue reading “Which Firms Have The Biggest Gaps Between Their Highest- and Lowest-Paid Partners?”

One firm just started pocketing 20 percent of partner pay.

Many lessons can be drawn from the collapse of Dewey & LeBoeuf. We’ve learned, for example, that it’s dangerous to have a law firm name that’s highly susceptible to puns. (Dewey know why that is? Howrey going to find out? Heller if I know.)

Another lesson: avoid excessive dependence upon bank financing. When a firm starts to spiral downwards, that spiraling can be accelerated by a bank calling a loan, not renewing a credit facility, or otherwise taking steps to protect itself that, while reasonable for the bank, can be damaging to the firm.

Firms have responded by turning to their partners for more financing. An increasing number of firms are issuing capital calls to partners or requiring high capital contributions.

So perhaps we shouldn’t be surprised to learn that one law firm has instituted a new policy of withholding 20 percent of partner pay….

double red triangle arrows Continue reading “Not A Popular Policy: Withholding 20 Percent of Partner Pay”

Biglaw partners may not be having coke-fueled orgies on piles of cash any more, but partners are still doing well compared to mere mortals.

In fact, the biggest rainmakers are doing really really well compared to many of their colleagues. According to Steven Harper, the Northwestern professor and author of The Lawyer Bubble: A Profession in Crisis (affiliate link), the highest-paid Biglaw partners used to make three times more than their run-of-the-mill colleagues. Today, rainmakers can pull down ten times more.

And this is not good for the legal industry…

double red triangle arrows Continue reading “The ‘Biglaw Partner Compensation’ Is Too Damn High”


As we mentioned in Morning Docket, the American Lawyer recently released its Am Law 200 law firm rankings — a list that’s still closely watched, but not quite as prestigious as being a ranked member of the influential Am Law 100. Sorry, but being a part of the “Second Hundred” just doesn’t have the same ring to it.

While the Am Law 100 celebrated a year of “slow growth” in 2012, it looks like the Am Law 200 will be known for its “bets on bulk.” When all of the big boys were busy playing it safe, perhaps out of fear of becoming the next Dewey, firms in the Second Hundred were gobbling up talent like there was no tomorrow.

Of course, as could’ve been expected, this kind of aggressive hiring had some pretty major effects on firms’ financial performance. So how did the Am Law 200 stack up? Let’s find out…

double red triangle arrows Continue reading “The 2013 Am Law 200: A ‘Hiring Binge’ Hangover”

As we mentioned in Morning Docket, the American Lawyer recently released its highly influential, closely watched Am Law 100 law firm rankings. They say that “slow and steady wins the race,” and with regard to economic recovery, Biglaw firms seem to have taken that up as their new motto.

Yes, partners are still living as large as they ever were, but their success now comes in the form of single-digit returns with regard to key financial metrics. The divide between the “haves and the have-nots” in the world of major law firms has grown to epic proportions, and some Am Law 100 staples have fallen out of the top hundred firms altogether. Welcome to the new normal.

Are you ready to get excited about “modest” and “spotty” gains across the board? Let’s dig in….

double red triangle arrows Continue reading “The 2013 Am Law 100: A Year of ‘Slow Growth’”

What’s happening to the compensation of top partners at one major firm.

What kind of world are we living in? As we mentioned yesterday, a law school just announced that it’s lowering tuition — a shocking move, given that law schools almost always increase tuition by a few percentage points per year.

And now we get this news: a major law firm is cutting — yes, cutting — pay for top partners. This is a big surprise too, given that the powerful trend in the industry has been in favor of a growing divergence in pay between the highest- and lowest-earning partners. According to one recent study, “the spread in compensation between the highest- and lowest-paid partners in law firms has increased to 6-to-1 or 7-to-1 from the previous count of 4-to-1 or 5-to-1.”

So which firm is making this move, and what’s motivating it?

double red triangle arrows Continue reading “A Biglaw Firm Plays With Its Partner Pay Scale”

If you follow the world of large law firms, then you are probably familiar with the incisive and candid commentary of Steven J. Harper. Over at his blog, The Belly of the Beast, Harper offers excellent insights into the world of Biglaw.

Harper knows so much about that world because he spent his entire legal career in it. He joined Kirkland & Ellis after graduating from Harvard Law School in 1979. He practiced litigation at the firm for about 30 years, until his retirement in 2008, at the early age of 54 (which you can afford to do when you’re an equity partner at a firm as lucrative as K&E).

In addition to blogging, Harper has written four books. I spoke last week with Harper about his latest book, The Lawyer Bubble: A Profession in Crisis (affiliate link), and about his views on the worlds of Biglaw and legal education….

double red triangle arrows Continue reading “An Interview with Steven Harper, Former Kirkland Partner and Author of ‘The Lawyer Bubble’”

* If you’re looking for an easy résumé line, then consider joining the Supreme Court bar, an elite organization that doesn’t check to see if its members are still alive. All you need is three years of practice, two signatures, and $200. [Associated Press]

* Stanley Chesley, the master of disaster himself, was disbarred for his “shocking and reprehensible” conduct in a fen-phen case. His wife, U.S. District Court Judge Susan Dlott of the Southern District of Ohio, must be oh so pleased. [Courier-Journal]

* Howrey like dem apples now? Some of Howrey’s former partners, including ex-chairman Robert Ryuak, all lined up to make deals to delay lawsuits from the firm’s bankruptcy trustee, Allan Diamond. [WSJ Law Blog (sub. req.)]

* This Biglaw firm’s future was just a little bit dimmer in 2012, with a 4.9 percent dip in profits per equity partner. This is unexpected from Milbank, a number 3 seed in our March Madness competition. [Am Law Daily]

* The NRA’s New York affiliate filed suit challenging the state’s new gun laws, claiming that a ban on assault weapons violates the Second Amendment — because this is clearly what the founders intended. [Reuters]

* Raj Rajaratnam’s younger brother, Rengan Rajaratnam, was indicted yesterday in a federal insider-trading scheme tied to the Galleon case. You can’t fault the guy, he was just trying to keep it in the family. [Bloomberg]

* Sorry, Dean Boland, but you’re not going anywhere. A judge denied the attorney’s request to withdraw from Paul Ceglia’s Facebook case. He must be wishing there were a dislike button now. [Law 360 (sub. req.)]

PPP at one top law firm?

* Law School Transparency? Nay, Biglaw Transparency! Peter Kalis, global managing partner of K&L Gates, just opened the kimono wide on his firm’s financial performance in an “unusually detailed” fashion. [Wall Street Journal (sub. req.)]

* Talk about a pain in the pocketbook: although profits per partner and revenues are up overall, one firm saw shrinkage of 16 percent in PPP. [Thomson Reuters News & Insight]

* The ABA is just now thinking of trying to find someone who will audit the graduate employment data that law schools release each year. Gee, it only took 15 fraud lawsuits to get the ball rolling. [National Law Journal]

* Oh my God, you guys, carrying six figures of law school debt on your shoulders is “unsustainable” in the long run, especially when your salary sucks. This is new information that no one’s heard before. [News-Gazette]

* Former U.S. Attorney Jim Letten is now Tulane Law’s new assistant dean for experiential learning. For the school’s sake, hopefully he’ll be able to control his students better than he did his AUSAs. [Tulane Hullabaloo]

* “You’re a cold-blooded murderer and I’ll stare you down until I die.” Drew Peterson was sentenced to 38 years in prison for the murder of his third wife. A sequel to the Lifetime movie is likely forthcoming. [Reuters]

* Aside from writing powerful opinions that will last the ages, being a mentor “is the most valuable thing” this Supreme Court justice can do. Sonia Sotomayor: motivational speaker? [New York Times]

* Aww, poor Biglaw partners. You want bigger cuts of your firm’s profits, but according to the latest Peer Monitor report, expectations like that are incredibly “unrealistic.” [WSJ Law Blog (sub. req.)]

* This actually isn’t something women like to shop for: the $200 million class action suit over the Greenberg Traurig “boys club” is currently being held up in two federal courts by arbitration and forum shopping issues. [Am Law Daily]

* With news that the legal industry is shedding jobs faster than the ABA can accredit more unnecessary law schools, career services officers must be hanging their heads in shame. [Thomson Reuters News & Insight]

* Dear law schools, your crappy business model is making us take a look at all crappy higher education business models, and we don’t like what we’re seeing here. Pls hndle thx. XOXO, Moody’s. [Washington Post]

* This is justice, Texas style: District Attorney Mike McLelland says the reward fund for tips in the brutal slaying of ADA Mark Hasse will grow to an “astronomical amount” until the killers are found. [Dallas Morning News]

* This lawyer allegedly had a fling with his sister-in-law out of the goodness of his heart, and in return, she accused him of sexual assault. Now he’s suing her for $7 million. You can’t make this sh*t up. [New York Post]

* In trying to get $700 in tickets dismissed, this lawyer says the U.S. Postal Service is immune from state and local traffic regulations. Other USPS immunities include not losing my mail on a regular basis. [USA Today]

Page 5 of 10123456789...10