Profits

The absence of spring bonuses makes cute animals sad.

Today is March 1. By this time last year, about a dozen firms had announced spring bonuses, as you can see from our prior coverage.

This year? Crickets.

Perhaps there’s no cause for worry right now. Things are going just as my colleague Elie Mystal predicted: “You’re going to get your money. My prediction: an extra $10,000 to $20,000 depending on class year, starting with third-year associates. It might be announced really late, end of February or early March, once firms realize they need to keep their talented midlevels.”

I can’t say I share Elie’s optimism….

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We’re getting the sense, based on anecdotal evidence showing up in our inbox, that law firms are quietly making cuts to the ranks of attorneys and staff. They’re doing so somewhat stealthily, however — in dribs and drabs, spread out over decent stretches of time, often invoking performance reasons. So we’re having a hard time obtaining enough information on any one firm to issue a report.

We need your help in keeping law firms honest. If you have layoff news to report, please send it our way, by email or by text message (646-820-8477 / 646-820-TIPS). As you’ve probably already noticed, we do not name our sources.

One firm that’s being commendably upfront about its reductions is Bingham McCutchen. This afternoon, the firm announced some staff layoffs….

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Over the past few weeks, we’ve been receiving interesting reports about Dewey & LeBoeuf. They were nothing but vague rumblings for a while, but they’ve now reached the point where we have enough to write about.

So let’s check in and ask: How do things stand at this major, top-tier law firm? In other words, “Where’s LeBoeuf?”

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Last year, Sullivan & Cromwell announced spring bonuses on January 21st. Today is February 3rd. It might be time to panic.

The conceit of this entire bonus season has been that the ridiculously low bonuses bar set by Cravath, Swaine & Moore was just an opening figure. People really didn’t expect that Cravath would halve bonuses. I mean, it’s CSM. They can count. Their profits went up. Why would they pay out 50% less than last year?

Well, I guess the answer “because they can” is going to have to be enough for Biglaw associates everywhere….

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At the start of this new year, what is the outlook like for legal employment? There’s certainly a fair amount of bad news out there, particularly for recent law school graduates.

But what about for denizens of Biglaw, the lawyers fortunate (or unfortunate) enough to work at the nation’s largest law firms? What does 2012 hold for them?

Earlier this month, my colleague Elie made some predictions for the legal profession. I will follow in his footsteps and venture some prophecies of my own for the year….

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At large law firms around the country, associates and counsel are eagerly awaiting their bonuses. But partners and chief financial officers have their minds on other things: namely, collections. The fourth quarter is when firms step up their efforts at shaking down clients for cash.

As we all know from the law-and-economics reasoning that was taught to us in law school, people — yes, this includes lawyers — respond to incentives. At one leading law firm, bonus anxiety is being shrewdly harnessed in service of collections efforts.

CHECK YOU TIME SHEETS….

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Say hello to the Global 100 for 2011. This is the American Lawyer’s list of the world’s 100 largest law firms, ranked by total revenue.

There’s a lot of economic anxiety these days, with fears of a double-dip recession running rampant. But looking back — the list is compiled based on 2010 revenue numbers — the legal business seems to be hanging in there. As noted by Am Law, total revenue for the Global 100 increased by 3 percent last year.

Lawyers are a competitive lot. So you’re probably less interested in the overall figures than in how different firms fared in the rankings….

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Edwards Angell & Wildman Harrold: A match made in heaven?

What results from the coupling of an angel and a wild man? One might think: angel + wild man = air traffic nightmare.

In the law firm context, however, the result is quite different. Edwards Angell is merging with Wildman Harrold, to form Edwards Wildman Palmer. The merger will take effect on October 1 and “will bring together 650 lawyers across two legacy firms renowned for their deep experience, shared dedication to client service, and highly collaborative cultures,” according to the new firm’s website.

What else do we know about Edwards Wildman Palmer? And what might be motivating this merger?

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Last month, we broke the news of seven key corporate partners leaving O’Melveny & Myers to join Paul Weiss. Shortly thereafter, we learned that two other prominent partners were leaving O’Melveny to join Weil Gotshal.

Of course, partners come and partners go at large law firms — but some of these nine were major rainmakers and practice group heads. Paul Weiss snagged Gregory Ezring, who chaired O’Melveny’s corporate finance and capital markets practice, and Brad Okun, who headed O’Melveny’s tax practice. Meanwhile, Weil scored Harvey Eisenberg, a leading private-equity adviser, and M&A partner Douglas Ryder.

Could something more be going on at OMM?

“You guys are missing a huge story about O’Melveny,” a tipster recently told us. “In the last two years or so, around 60 partners have disappeared.”

“The pace is now quickening,” this source added. “Since January 1, around 10% of the OMM partners, including many practice group leaders and other key rainmakers, have departed.”

These numbers sound significant — but, in fairness to O’Melveny, they should be viewed in context. Let’s hear what the firm had to say about them….

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It’s been a while since we checked in with the coming junior associate apocalypse that is legal outsourcing. Rest assured, LPOs around the globe are working hard to make sure that the Biglaw junior associate becomes extinct — at least as we know it.

There’s a fascinating article on Law21 that discusses the evolution of legal process outsourcing — and what LPOs need to do next:

Still in its relative infancy, legal process outsourcing has already had a huge impact on the legal services marketplace: scoring major deals with the likes of Microsoft and Rio Tinto, garnering the attention of private-equity investors, and helping to expose the degree to which law firms have overcharged for the simplest legal work, among other accomplishments. But this impact has set off two important chains of events.

The first affects LPOs themselves: they now need to move their value proposition beyond cost savings in a market they helped to make more sophisticated. The second affects everyone: the legal profession’s response to LPO is having an unexpected effect on how legal work is distributed and how legal resources are allocated.

Some law firms still seem to be fighting the last war and are committed to fending off outsourcing until the bitter end. But other firms are preparing themselves for the next war: remaining the primary legal advisor to their clients in a world where the clients themselves can go to a number of providers to get the work done…

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