IRELL & MANELLA — OBSERVATIONS FROM A FORMER IRELL ATTORNEY
As you likely know, the firm has over the last several years undergone a major structural change in order to increase profits per partner. This is reflected externally in partner headcount shrinkage.
With the ascendency of Morgan Chu to power there, what was once a full-service law firm with a strong IP litigation group narrowed its focus to become more of an IP boutique. Real estate, tax, estates and trust, and entertainment partners were “transitioned” away from the firm, with those departments essentially being shuttered. Partner headcount was reduced significantly, with an increasing focus on Morgan’s group.
Keeping Law School Accessible When Federal Loans Fall Short
As federal borrowing caps tighten financing options for law students, one organization is stepping in to negotiate the terms they can't secure alone.
(You have separately reported on the fallout of this when Morgan went to war with the entertainment group, which resulted in Juliette Youngblood’s lawsuit [in which Irell ultimately prevailed — see the December 17 update]. This also resulted in the loss of key legacy clients [in the entertainment sector].)
Given the nature of the demand for Morgan’s services, the firm was able to initially sustain higher fees, less controls on costs to clients, and virtually no discounting or fee caps. Legacy, evergreen corporate clients were increasingly shunned, with a focus on taking work from “one-off” plaintiffs or, in the patent parlance, “non-practicing entities.” The reduced partner count also offset significant associate attrition, so leverage was maintained overall (likely even increased some). (For context, the firm turned over about 20-25% or more of its associates in 2011, a little-known event.) In all, coupled with some contingency wins, the firm raked in increased profits, rising to the elite levels noted recently as endowing it with “prestige” status in the law-ranking press.
All this may, however, have come at some cost — and the payment appears to be coming due soon. As you may know, Morgan is set to retire [in 2015]. (I&M’s partnership agreement sets forth a mandatory retirement age of 65.) One might think that he will stay on [in some way or another, but] many are critical that he has not planned well for his succession. Legacy clients have been offended by the firm’s billing practices, and Morgan himself has been reluctant to “hand off” client management or first-chair case duties to his very capable partners.
[The firm has been shrinking due to associates quietly being “transitioned out” of the firm in double-digit numbers. Irell has] given up two floors in its Century City office to accommodate the shrinkage. I understand that staff cuts are equally deep (but that has been secretly going on there for years).
Opus 2 Steps Up Its AI Game With Acquisition Of A Legal Tech Startup
With the addition of Uncover’s technology, the litigation software is delivering rapid innovation.
The net result from what I hear is that firm morale is at an all-time low among associates…. I have heard from colleagues at other firms that they are receiving a substantial number of calls from I&M associates looking to lateral.
As Morgan’s reign comes to a close, the firm appears to be set for a painful transition. You may want to keep an eye on it. You don’t hear about the firm much in the law press, except some limited “positive” reports on the PPP or associate bonuses. You do not tend to see much of the real facts of the firm reported, which is unfortunate.
Prominent Business Trial Lawyers Announce New Firm [PR Newswire (press release)]
Star litigators break from Irell & Manella with dozens in tow [Daily Journal (sub. req.)]
Earlier: Associate Bonus Watch: 10 Leading Law Firms — Who’s Naughty And Who’s Nice?
3 Predictions For The Legal Profession in 2015