January 18, 2008
Summer Associate Forecast Brighter in '08
Taken from Law.com http://www.law.com/jsp/llf/PubArticleLLF.jsp?id=1200594603897
Summer Associate Forecast Brighter in '08
January 18, 2008
Jennifer Nejad, a second-year at Boalt Hall School of Law, worried that her status as a transfer student might affect her desirability in the eyes of summer employers.
But as it turned out, she found the fall recruiting season was a cinch. After 11 initial interviews led to about eight callbacks, Nejad followed up with four firms and received three offers. She'll be spending this summer at Orrick, Herrington & Sutcliffe, earning $3,077 per week.
She says her friends reported similar stories. "Almost everyone I talked to was pleased with how things worked out," said Nejad, a transplant from Hastings College of the Law.
Her experience reflects the conclusion of another robust summer hiring season, which apparently wasn't affected much by the darkening economic outlook, the turmoil in credit markets nor a slowdown in M&A activity.
Seven Am Law 100 and 200 firms interviewed for this story report that larger economic forces played little role in their summer program plans. The majority said their summer programs will be slightly bigger than last year.
Morrison & Foerster Chairman Keith Wetmore says that firms, particularly those that sport a well-diversified practice, are much better equipped to handle isolated downturns than they were two decades ago.
"Generally, we haven't seen a recession that hit diversified firms significantly since the early 1990s," he said. The dot-com bubble burst hit technology-oriented firms hard in the early part of the decade, he said, and some New York securities firms are being buffeted by the credit storm. But for many other firms, 2007 was a good year, and firm leaders say they expect 2008 to bring more of the same.
Summer programs are a valuable recruiting tool that can influence students' perception of a firm, said Peter Ocko, a recruiter with Major, Lindsey & Africa in Los Angeles. "If anybody publicly slashes its summer associate group, it's like putting up a stop sign, 'Not welcome,'" Ocko said.
While general hiring hasn't slowed down, he added, even big firms that are doing well are hiring laterals in a more targeted fashion, not creating positions for every great candidate that crosses their threshold.
Both MoFo and Orrick wrapped up 2007 with 16 percent increases in gross revenues. Both firms are also reporting bigger summer programs.
At Orrick, last year's summer class totaled 93. This year, the firm has already hired 97 second-years and still expects to add 10 to 15 more first-years, said West Coast hiring partner James Kramer.
The Summer Forecast
Compare the size of the 2007 and '08 summer classes of more than half a dozen Am Law 100 and 200 firms (.pdf).
"The economic factors played a role in the sense that we paused and took a hard look at where we expect the firm to be in two years," Kramer said. "And we're comfortable with where the firm is going, and because of what we learned we decided to hire more people."
"We want to make an offer to every single summer associate that joins us," he added.
MoFo bumped its number of summers to 134, up from last year's 108. And the increase is spread over both coasts. The firm's San Francisco office is bringing 42 students aboard, up from 24 last year, while the New York office is hiring 27, up from last year's 14.
Reed Smith's hiring co-chair, Morgan Tovey, said he expected tougher competition for students this year, but his firm ended up increasing its summer class slightly, from 77 total last year to 69 so far this year, with 12 more slots budgeted for first-years. First-year hiring will be completed by March.
"Back in the fall we expected that the competition would be stiffer," Tovey said. "We extended fewer offers and got a better yield."
By contrast, Heller Ehrman was the only one in a random sampling of seven firms to significantly slash its summer program. Only 50 summers will work at Heller this year, down nearly 50 percent from last year's 97. But the firm is also boosting summer pay from $2,800 to $3,100 in most offices across the country.
In early Am Law 100 financial results published this month, Heller reported gross revenues of $491 million, down more than 3 percent from the previous year.
But David Sanders, Heller's chief human resources officer, said the decrease in summer hires is the result of rebalancing the proportion of first-year associates as opposed to judicial clerks and junior lateral hires.
A few years ago the firm had a large proportion of midlevel associates due to lateral hiring. The firm doubled the size of its summer program to fill out the early classes, Sanders said.
Now, he said, "We can go back to the norm that we have used in the past."
January 10, 2008
San Francisco Bay Area Law Firms
The article below, from the Recorder, found at http://www.law.com/jsp/article.jsp?id=1199931032887 discusses the financial state of Bay area firms.
San Francisco Bay Area Law Firms Float on Turbulent Waters
Niraj Chokshi and Zusha Elinson
A rough economy in late 2007 killed a lot of the M&A and corporate work that had powered 2006, but leading Bay Area firms say global presence and a balance of practices helped insulate them from the downturn.
Despite the subprime mortgage crisis and resulting credit crunch, most of the eight Bay Area law firms that have released financial data so far showed . solid increases in revenue and profitability in 2007, according to The Recorder's annual survey of California firm finances.
Two exceptions were Heller Ehrman, which saw revenues and profits per partner drop slightly, and Townsend and Townsend and Crew, whose 2006 numbers had been goosed by an exceptionally large contingency fee.
Leading the pack in revenue growth, Morrison & Foerster and Orrick, Herrington and Sutcliffe each posted 16 percent increases in revenue, to $772 million and $894 million, respectively.
Cooley Godward reported a 45 percent increase in revenue -- but that number is somewhat less jaw-dropping when considering that much of the increase is from its late 2006 merger with Kronish Lieb Weiner & Hellman.
Leaders at MoFo and Orrick credited their increases to international scope and diversity of core practice areas.
"[With] the international platform of the firm, we are now able to serve our clients around the world in a significantly more comprehensive way than we were just a few years ago," said Orrick Chairman Ralph Baxter Jr.
Orrick's ranks and revenue per lawyer grew by 8 percent each. RPL is now at $850,000, which Baxter predicted will continue to rise "year on year going forward."
Headcount at MoFo grew by 6 percent and was outpaced by RPL, which grew by 9 percent to $890,000.
Referring to 2006's 12 percent revenue jump, MoFo Chairman Keith Wetmore called 2007's across-the-board increases "more of the same."
"We saw lots of activity in our core litigation strengths," Wetmore said, pointing to major wins such as the November jury verdict in favor of JDS Uniphase Corp. in a securities fraud trial.
Pillsbury Winthrop Shaw Pittman saw a more modest 2 percent increase in revenue, to $590 million. Its gross had risen 1 percent the year before. In 2007 the firm lost 24 lawyers while RPL increased by 5 percent to $810,000.
Though the firm's gains weren't as large as other firms, Pillsbury Chairman James Rishwain Jr. was happy with the increase.
It was "on the path that we expected," he said.
Heller Ehrman was the hardest hit of the large San Francisco firms reporting so far, falling from $507 million to $491 million in revenue, a 3 percent drop. RPL fell by 5 percent to $800,000, canceling gains made in 2006.
Firm Chairman Matthew Larrabee blamed the losses on a series of large litigation cases that wrapped up early in the year.
"In the first quarter of 2007, in a period of about 45 days, we won or settled eight or nine very large litigation matters," he said.
He also blamed "an environment where litigation was down nationwide."
The nationwide decline, said Newport Beach-based legal consultant Peter Zeughauser, comes after years of above-average activity.
"It just so happens that it was extraordinarily busy for a good five years, and it's fallen off a little bit," he said.
That's not to say litigators everywhere were twiddling their thumbs.
"Litigation remained robust and ... in litigation shops or firms that had big litigation practices, generally, I think they had good years," he said, noting that "there were a few exceptions."
Heller also lost 25 equity partners, a 15 percent drop, while gaining 26 non-equity partners, a 30 percent increase.
Those changes, Larrabee said, are due to the firm adhering to The Recorder's survey definition of equity and non-equity partners -- something the firm hadn't done in the past.
"In the past we did not report everybody who fit The American Lawyer definition as a nonequity partner as nonequity," Larrabee said.
Regardless, the lower financial numbers won't drive lawyers away, Larrabee said.
"We have a very transparent organization. The partners are well aware of what happened this year and why," he said.
"Our partners have been very supportive."
Though most firms escaped the full wrath of the subprime crisis and credit crunch, the economy still held back growth.
Corporate and private equity trended downward, Zeughauser said.
"That's really what kept this year from being a great year."
He expects 2008 to be a lot like 2007.
"I think it's going to be a mixed year again. I think litigation is going to be strong," he said. "I think corporate is going to be weaker."
Employment powerhouse Littler Mendelson had a year of expansion that saw healthy growth in gross revenue -- up 28 percent to $307 million -- but losses in revenue per lawyer and profits per partner as headcount grew by half.
Managing partner Marko Mrkonich said that as employment law becomes increasingly specialized, his firm is looking for underserved corners of the country to set up new offices. In 2007, it opened offices in Portland, Ore.; Orlando; Cleveland; and New Haven, Conn., adding 220 lawyers in the process.
Mrkonich said that much of that growth also took a bite out of profitability. Profits per equity partner dropped by 10 percent, to about $420,000. Revenue per lawyer was down almost 15 percent, to $460,000.
Mrkonich said that the best-performing areas continue to be cross-border employment issues, payroll and traditional labor law, and class actions. "The total number of class actions being defended passed 300 pending matters at any one time in 2007, up from 250 a year ago," Mrkonich said.
The growth phase isn't over, either. He said he expects the firm to employ more than 700 lawyers by the end of this month.
The other two largest S.F.-based firms -- Thelen Reid Brown Raysman & Steiner and Sedgwick, Detert, Moran & Arnold -- did not provide financial data by the time of publication.
PEAKS IN THE VALLEY
Unlike the mixed results from San Francisco firms, some key Silicon Valley firms reported strong results for 2007.
Cooley Godward Kronish had a very strong year, boosting revenue by 45 percent to $485 million. While that outsized hike was thanks in large part to its merger with New York's Kronish Lieb, Cooley said that a strong year across all of its practices also boosted its 2007 results. That was evident in the healthy 10 percent bump in RPL.
"The Valley was extremely busy and I think the more pure tech firms weren't nicked as much by the subprime problems as other firms were," said Mark Pitchford, Cooley's COO. "In our space it was a really, really nice year."
Pitchford said IP and commercial litigation, as well as the firm's M&A practice, were particularly busy in 2007. Also, the firm's work for emerging companies rose on an increase in clean-tech activity, he said.
Profits per partner were up 42 percent at Cooley, hitting $1.42 million -- but that number was aided in part by a drop in equity partners and a huge increase in nonequity partners. The firm reported 6 nonequity partners in 2006 and 72 in 2007. The equity ranks went from 148 to 129.
Changes were made to the Cooley pay system in 2007 that caused a number of mostly junior partners to be reclassified as nonequity partners as defined in the Recorder survey, explained Joseph Conroy, Cooley CEO. The Recorder and American Lawyer magazine define a nonequity partner as a partner who receives more than half of his or her compensation from guaranteed salary rather than from profits.
Conroy said the change was made to better manage partner compensation as partners move up through the ranks. It also, he said, provided a more "apples to apples" comparison with PPP at other firms.
"That was not part of the motivation for the change," Conroy said. "That was part of the calculus of whether we would report these partners as nonequity partners."
Pitchford added that the change had nothing to do with the merger.
Fenwick & West boosted its top line nearly 10 percent to $183 million.
"Litigation was busy, corporate was busy, tax was busy and IP was busy," said Fenwick's Chairman Gordon Davidson.
Fenwick also raised its PPP nearly 8 percent, breaking the million-dollar mark for the first time in its history. The firm did drop four equity partner slots and gain six nonequity partners. Davidson said that's because new partners get a certain amount of compensation guaranteed for the first two years, a new practice at the firm.
"It was our strongest year ever, including the bubble," Davidson said.
What looks like a lousy year for one IP-heavy firm was just a numbers trick. After booking huge contingency fees in 2006, Townsend and Townsend and Crew showed a 15 percent decline in revenue to $145.5 million, with PPP nearly halved to $750,000.
Chairman James Gilliland Jr. predicted a year ago that 2007 wouldn't match the previous year, when the firm pulled in a $40 million award from a huge antitrust case against Microsoft. The firm also had landed a big contingency fee in 2005 from a patent suit for MicroUnity Inc. against Intel Corp.
"From our perspective 2007 was not a down year, it was a typical year," Gilliland said this week. "[2005 and 2006] were definitely aberrations and the partners knew that."
Before the two big years, the firm's PPP was at $550,000 while revenue stood at around $100 million.
Wilson Sonsini Goodrich & Rosati said it would wait until the close of its fiscal year Jan. 31 to report results. But firm spokeswoman Courtney Dorman said it would be a record year for the firm.
Staff writer Petra Pasternak contributed to this story.
Editor's note: For related financial information, see The Recorder story "Quinn Partner Profits Clear $3 Million."
September 13, 2007
The most exhaustive list of the largest Michigan firms
For students looking for a list of the largest Michigan firms, NALP might not quite do, as only a few Michigan firms are featured in NALP. The Michigan Lawyers Weekly publishes an annual list of the largest Michigan firms. It ranks firms by how many attorneys they have in Michigan (thus a firm like Foley which has a Detroit office would not be ranked amongst the top Michigan firms even though nationally it is larger than virtually any of the Michigan firms). The list can be viewed here: http://www.michiganlawyersweekly.com/mi2007LargestFirms.cfm
August 13, 2007
Bruce MacEwewn of the blog Adam Smith, Esq. http://www.bmacewen.com/blog/
"Associate Moneyball" comments on the American Lawyer's recent story on associate recruitment and hiring by the top law firms. Bruce focuses in on the traditional law firm recruitment model which often times falls short of helping acheive law firms' recruitment goals (as associate retention rates continue to rise) and leaves law students less than satisfied with their choices (among other things, law students have a hard time differentiating one firm from another). Below is an except from Bruce's blog:
"Is this any way to recruit associates?" asks a lead story in this month's American Lawyer.
What is "this way?" We all know the drill, most of us from both sides of the table:
* Top law schools orchestrate dances of 20-minute interviews between visiting firm partners and law students;
* questions are kept superficial (one Latham recruit got a steady diet of fantasy football questions);
* grades and class rank are presumed to be valid proxies for post-employment performance; and, in the event,
* of students offered summer jobs by "big" firms (> 250 lawyers):
o just 28% accept
o 40% of whom are gone by their 3rd year, and
o 62% of whom are gone by their 4th.
* And, according to NALP, half of associate departures are "unwanted" by the firms.
* Finally, depending on who you believe, replacing a needed associate costs from one to three times their fully loaded annual costs.
Worse, the pressure is intensifying. According to the National Law Journal's "250" report (ranking the largest 250 US firms by lawyer headcount), the number of associates at those firms has increased 76% over the past decade while the number of law school graduates has gone up just 7%. Firms are going to more law schools, reaching farther down into the class ranks, or both. And at the elite schools, firms are simply pushing harder. Georgetown Law, for example, anticipates a 10% increase in firm interviews this year, and the same again next year.
Need I add that most of this takes place with students fundamentally in the dark about what differentiates one firm from another?
"[Students] aren't helped much by firm marketing materials, which often say the same thing and make firms indistinguishable from each other. "They all tell you they have great clients, and they work hard but [have] a very collegial atmosphere," says the Stanford student. "It's the same discourse over and over again."
Fine. Diagnosis is one thing, prescription another.
To continue reading this blog entry, please visit Adam Smith, Esq. at http://www.bmacewen.com/blog/
August 01, 2007
Annual Survey Shows the New Reality of Associate Life
Four facts -- from too few lawyers to too many sent packing -- set the stage for the latest war for talent
The American Lawyer
August 1, 2007
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Put aside the conventional wisdom. Here's the state of associate life.
-Associates aren't miserable, except perhaps in certain high-pressure New York precincts. The average satisfaction score hit a record high this year: 3.81 on a five-point scale.
- Associates don't plan on staying. Despite the high level of job satisfaction, only 44.9 percent of the respondents predicted that they would be at their firms in five years, and only 11.7 percent expected that they would become equity partners at their current firm.
- Despite all the hand-wringing over associate retention, law firms report that in nearly half the associate departures -- 49 percent -- the firms were either neutral about the departures or happy to have the associates leave. (This statistic comes from the latest survey by the National Association for Law Placement.)
- There may not be enough lawyers to feed the hiring appetite. According to our survey of summer associate hires, Am Law 200 firms expect to bring on roughly 10,000 associates next fall. That astonishing number equals about one-quarter of all the students who will graduate from U.S. law schools next year. To put it another way, the top 20 law schools will only produce about 6,500 graduates.
What do these four facts mean? For law firms, at least three things. First, in the short run, the war for talent will become more ferocious. Second, the cost of talent will only increase. And third, the need for firms to differentiate themselves will become apparent even to the hidebound.
This year's famous hike to $160,000 in starting pay for first-year associates did not buy hiring firms anything in terms of separating themselves from their competition. The firms that can afford to pay more will pay more; but there is a price point that not all Am Law 200 firms will be willing to match. We're confident that that number begins with a 2.
As costs rise, the price of a mistake only grows. The feverish but unsystematic, even casual, recruiting habits of firms seem painfully inadequate now. Firms will sharpen their techniques or start losing ground to others who have grown weary of viewing recruits through a glass darkly.
As we have argued before, firms are not all alike and do themselves and their potential associates little good by pretending otherwise. Firms need to define themselves and then make their distinctive qualities known to the job market.
A word for potential associates: Enjoy! The seller's market will last until the next downturn -- by which time most of you will be on to something else.
May 25, 2007
Another law firm merger
Locke Liddell Merger With Lord Bissell Will Form 700-Lawyer Firm
Brenda Sapino Jeffreys
Locke Liddell & Sapp, based in Houston and Dallas, and Chicago-based Lord, Bissell & Brook have agreed to merge and will form a 700-lawyer firm named Locke Lord Bissell & Liddell.
Jerry Clements, the Austin, Texas-based managing partner of Locke Liddell, says the firms signed a preliminary term sheet on Tuesday. The merger must be approved by at least 75 percent of the partners in each firm at votes set for mid-July and is expected to close by Aug. 1.
Clements will head a nine-member executive committee that will also include a vice chairman and three other representatives from each firm. The firm's headquarters hasn't been decided, Clements says, although she notes it may be Austin because that's where she lives.
Thomas W. Jenkins, chairman of the executive committee at Lord Bissell, could not immediately be reached for comment.
"This represents a beginning of a new era for Texas law firms," Clements says. "To my knowledge, this is the first time a large Texas firm merges with a law firm from outside Texas with offices outside the United States."
Locke Liddell is the larger firm with 399 lawyers, but Lord Bissell, which has about 300 lawyers, has a wider range of offices. Locke Liddell has offices in Houston, Dallas, Austin, New Orleans and Washington, D.C. Lord, Bissell's offices are in Chicago, Atlanta, Los Angeles, New York, Sacramento, Calif., and London.
Washington, D.C., is the only location where both firms have offices; Clements says Locke Liddell is moving soon into new office space in D.C., and the merger plans call for lawyers from Lord Bissell's Washington office to move into that new space once the merger closes.
Locke Liddell, meanwhile, boosted the size of its D.C. office earlier this week when it brought on 14 real estate lawyers from the Washington office of Chicago firm Katten Muchin Rosenman. The group includes partners Jennifer Beer, Christopher Hart, Adam Lichenstein and Edward Zughaib as well as 10 associates.
Clements, who has been Locke Liddell's managing partner for less than a year, says the merger with Lord Bissell makes a lot of sense for Locke Liddell due to cross-selling opportunities -- particularly, in the financial services, intellectual property, litigation and health-care areas -- and geographic expansion. The deal also makes sense from financial and cultural perspectives, she says.
"It gives us the national footprint we are wanting to serve our clients better," Clements says. "It gives them opportunity to get to a [larger] size."
Clements says Locke Liddell has been looking for a good merger partner for several years and started talking with Lord Bissell earlier this year.
"It's one that finally made sense," she says.
She declines to identify other prospective merger partners.
Clements says lawyers from Locke Liddell and Lord Bissell have worked together in the past on banking regulatory matters and as co-counsel or counsel for co-defendants on litigation or arbitration related to reinsurance disputes. She declines to identify clients the firms share.
The merger would be the largest for the firm since January 1999, when Houston-based Liddell, Sapp, Zivley, Hill & LaBoon merged with Locke Purnell Rain Harrell of Dallas to form Locke Liddell & Sapp.
Locke Liddell's national reputation got a large boost in October 2005 when President George W. Bush nominated Harriet Miers, a former co-managing partner in Locke Liddell and then-White House counsel, for a seat on the U.S. Supreme Court. Miers withdrew her name from consideration three weeks later amid controversy over her qualifications. Miers, a commercial litigator, left the White House in February and returned to Locke Liddell as a partner in Dallas.
Financially, the firms "match up nicely," Clements says.
"The economics work for both firms. There's a very good cultural fit," she says.
Profits per partner at Locke Liddell averaged $831,000 in 2006, up 16.1 percent from 2005's $716,000, according to Texas Lawyer's Annual Report on Firm Finance. Revenue per lawyer at the firm averaged $693,000 in 2006, up 4.7 percent when compared to $662,000 in 2005.
In 2005, profits per partner averaged $610,000 at Lord Bissell, while revenue per lawyer came in at $580,000 at the firm, according to The American Lawyer's Am Law 200 report, published in June 2006.
Clements says Locke Liddell can do a deal such as the merger with Lord Bissell because of the firm's positive financial position. She says that's due to hard work by the partners in the firm and by former managing partner Bryan Goolsby, now a partner in Dallas.
March 16, 2007
Summer Hiring is Heating Up
Summer Hiring Is Heating Up
The National Law Journal
Several of the nation's top law firms are hiring more summer associates for the upcoming season, with a few bringing aboard significantly greater numbers of would-be lawyers than in years past.
A snapshot of some of the largest firms shows a greater demand for summer associate help than last year, which itself marked an increase for most shops compared with the previous year.
With record profits at many big firms, summer associates are a hot commodity, especially when combined with a stagnant supply of law graduates and a shrinking law school talent pool.
"We had a great recruiting year, we have lots of work and there's room for everyone," said Carol Sprague, legal hiring director at Skadden, Arps, Slate, Meagher & Flom.
The 1,915-attorney New York firm is expecting 292 summer associates, an increase of 35.2 percent compared with 2006, when 216 summer associates joined the firm. In 2005, Skadden hired 184 summer associates across its 22 offices.
The rise in summer associate positions partly is due to a boom in business among large law firms, many of which are reporting record growth for 2006. For example, Paul, Hastings, Janofsky & Walker announced last month that it grossed some $813 million in revenue in 2006, an increase of 22 percent compared with 2005. Profits per partner totaled $1.6 million, up 21 percent, the firm said.
In addition, 825-attorney King & Spalding also announced last month that its 2006 gross revenue topped $582 million, an increase of 13.2 percent compared with 2005. Profits per partner shot up by 25 percent, the Atlanta-based firm announced, for a record $1.3 million last year.
Also touting record results recently was Buchanan Ingersoll & Rooney. Gross revenue at the Pittsburgh firm, the result of a merger last year between Buchanan Ingersoll and Klett Rooney Lieber & Schorling, climbed to $271.3 million, up from the $193.7 million Buchanan Ingersoll made in 2005. Profits per partner grew by 14 percent, from $457,000 in 2005 to $522,000 in 2006.
But with the good news at big firms comes the challenge of finding qualified summer associates to fill those posts. Despite the increased demand for associate help, law schools continue to churn out about the same number of graduates: some 40,000 each year. Meanwhile, the number of applicants is dropping, by 6.3 percent last year and by 5.2 percent the year before, according to the Law School Admission Council.
Boosting its summer associate ranks by 19.9 percent in 2007 is Kirkland & Ellis, which plans to welcome 229 students. Last year, the 1,218-attorney Chicago-based firm hired 191 summer associates, and in 2005, it ushered in 188 summer associates.
"We are very, very busy," said Sallie Smylie, chairwoman of Kirkland & Ellis's recruiting committee.
To find those summer associates, Kirkland & Ellis visited some new schools last fall, Smylie said, and made trips to schools that it had crossed off its list a few years ago. Indeed, several schools reported visits last fall from law firms that previously had not participated in on-campus recruiting.
For example, Northeastern University School of Law for the first time welcomed the firm now known as Kirkpatrick & Lockhart Preston Gates Ellis, in addition to Chicago's Seyfarth Shaw and New York's Proskauer Rose.
The University of Pittsburgh School of Law had inaugural visits from Dechert. New York-based Cadwalader, Wickersham & Taft also collected resumes for the first time at the school.
Loyola Law School, Los Angeles, had first-time visits from Seyfarth Shaw and Sonnenschein Nath & Rosenthal. And Philadelphia's Duane Morris, with 581 attorneys, visited some smaller schools this fall, including North Carolina Central University School of Law and Southern University Law Center in Baton Rouge, La.
According to NALP, formerly the National Association for Law Placement, on-campus interviews typically result in about 21 percent of law students ultimately securing a permanent position with a law firm.
The latest summer-recruitment figures available from NALP indicate that more law firms are visiting more schools. Nationwide, 50 percent of law schools reported an increase of 5 percent or more in the number of employers visiting their schools to hire summer associates in 2005.
Some bet-hedging also may be fueling the jump in summer-associate hiring. As firms battle an attrition rate that, by NALP's estimates, has soared to 78 percent by the time associates are in their fifth year of practice, some firms may be hiring more people in hopes that a greater number of associates will join the firm for the long haul.
"There's probably some of that," Smylie said. "You have to be realistic when you're projecting your needs that there will be attrition."
Retention problems are one reason that law firms are hiring more summer associates, said Joel Rose, principal of Joel Rose & Associates in Cherry Hill, N.J. He added that competition for top summer help has prompted some of the more prestigious firms to hoard associates.
"They want to give as many of these top-quality candidates as they can an opportunity," Rose said.
Also bringing in more summer associates is DLA Piper. For the upcoming summer, it expects 105 law students, compared with 92 in 2006, for a 14.1 percent increase. The 3,333-attorney firm, a result of a merger, was created in 2005.
Latham & Watkins also is hiring more summer associates, but only slightly. This year, it expects 282 law students, compared with 276 last year.
Last year, Morrison & Foerster hired 109 summer associates, a 14.7 percent increase compared with 2005. But this year, the 1,062-attorney firm is expecting 108 summer associates, one fewer than in 2006.
Morrison & Foerster Chairman Keith Wetmore said that the firm's San Francisco office was "oversubscribed" last year in terms of its number of summer associates. The firm this year has "redistributed" some of those positions to its other offices, he said.
March 07, 2007
What Does The Great Associate Salary Spike Really Mean?
If you’re interested in a thorough analysis of the latest rounds of associate hikes (e.g. NY firms raising starting salaries from $145,000-$160,000 and the rest of the Am Law 100 following suit), you should read the latest posting on Adam Smith, Esq., a prominent blog which discusses the economics of law firms. http://www.bmacewen.com/blog/
March 06, 2007
Greenberg Traurig--Revenues up by 880% since 1996
Want to learn more about the fastest growing firm in the Am Law 100 and the only Am Law 100 firm with a minority chief executive? What drives the firm's growth (the firm grew from 325 attorneys in 1997 to over 1600 today)? Read the American Lawyer Magazine's recent article on Greenberg Traurig. http://www.law.com/jsp/article.jsp?id=1173101898582
March 02, 2007
Law Firm Partners Find Out What Associates Really Think of Them
Law.com recently ran an interesting article about some large law firms engaging in upward reviews of partners. Upward reviews are evaluations of partner performance and skill by associates. According to the article upward reviews "give associates the opportunity to evaluate and provide input on the management and leadership performance of partners...". Moreover, the article encourages other law firms to follow suite, "Law firms aiming to create an outstanding working environment for their associates and attract prospective recruits should seriously consider implementing an upward review process."
White & Case has been engaging in upward reviews of partners for several years now and has found that such reviews can make a powerful impact in improving management performance and reinforcing the value a firm places on associates.
While many students likely know the statistics on lawyer attrition, they may not be aware of the steps some firms are taking to address attrition through lawyer engagement and experience management.
Read the article here: http://www.law.com/jsp/llf/PubArticleLLF.jsp?id=1172052185553&rss=newswire
February 22, 2007
Summer Hiring is Heating Up According to the National Law Journal
According to a recent article in the National Law Journal, http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1172138579742 the nation's largest law firms are hiring more summer associates for the upcoming summer. Some firms are bringing on significantly more summer associates than years past.
For example Skadden, Arps, Slate, Meagher & Floam has seen an increase of 35.2% in summer associates since last year. Last year it employed 216 summer associates, and for this coming summer it expects 292 summer associates.
Kirkland & Ellis is boosting its summer associate ranks by 19.9% in 2007 as it plans to welcome 229 students. Last year, the 1,218-attorney Chicago-based firm hired 191 summer associates.
Meanwhile law firms are finding it harder to find qualified candidates as their revenues and profitability continue to swell, especially as the the number of law school applicants is dropping, by 6.3% last year and by 5.2% the year before, according to the Law School Admission Council.
What does this mean for Michigan law students?
February 12, 2007
Midsize Firms Shift Recruiting Strategies
As the need for law students from top law schools increases, mid-sized firms are finding themselves at a disadvantage in terms of attracting associates from the leading law schools. The good news: law students who are having difficulty placing with the larger firms will find mid-sized firms more receptive and will have an increased chance of finding employment. The downside: mid-sized law firms on average pay significantly less than the larger firms.
February 08, 2007
New firms, dead firms and merged firms
The National Law Journal's recap of 2006 with respect to the growh and decline of large law firms is a good read. See 'NLJ 250' Shows Strong Law Firm Growth Continuing http://www.law.com/jsp/article.jsp?id=1163066728127
While the full article can be found below, following is a summary of the most significant changes in the law firm landscape:
1. Largest Law Firm Mergers: Some of the larger couplings included Bingham McCutchen with Washington's Swidler Berlin; Pittsburgh-based Buchanan Ingersoll with Klett Rooney Lieber & Schorling, also in Pittsburgh; Boston-based Edwards & Angell with Palmer & Dodge, also in Boston; Palo Alto, Calif.'s Cooley Godward with Kronish Lieb Weiner & Hellman, also in Palo Alto; Philadelphia's Fox Rothschild with Roseland, N.J.-based Grotta Glassman & Hoffman; and New York's Kelley Drye & Warren with Washington's Collier Shannon Scott. 20th-ranked Reed Smith announced that it was merging with Chicago's Sachnoff & Weaver, also creating a law firm of about 1,500 lawyers. Also, Kirkpatrick & Lockhart Nicholson Graham, in the 23rd spot, recently announced that it was in talks with No. 99 Seattle-based Preston Gates & Ellis, which, if completed, would result in a law firm of about 1,400. Further, Day, Berry & Howard, ranked No. 166, announced its plans to merge with Pitney Hardin, a 170-attorney firm based in Florham Park, N.J.
2. Biggest drop in attorneys: The biggest decline occurred at Chicago's Gardner Carton & Douglas, which dropped by 44 lawyers and plunged by 18 percent to the 217th position. Last year the firm was ranked 173rd. It now has 195 attorneys. Some observers have questioned the firm's stability, though its leaders insist that the firm is sound. And there have been reports that Gardner Carton has been in merger talks
3. Dead firms: The Cochran Firm; Austin, Texas-based Brown McCarroll; Pitney Hardin; Chicago's Neal Gerber & Eisenberg; Palmer & Dodge; Seattle-based Lane Powell; St. Louis-based Lewis, Rice & Fingersh; Steptoe & Johnson PLLC, with offices in West Virginia; Los Angeles-based Jeffer, Mangels, Butler & Marmaro; and Kansas City, Mo.-based Shughart Thomson & Kilroy
4. New firms born in 2006: Ten firms new to the list were Chicago's Clausen Miller; Atlanta's Fisher & Phillips; New York's Kasowitz, Benson, Torres & Friedman; San Diego-based Lerach Coughlin Stoia Geller Rudman & Robbins; Phoenix's Lewis and Roca; Morristown, N.J.-based McElroy, Deutsch, Mulvaney & Carpenter; Newark, N.J.-based Sills Cummis Epstein & Gross; Grand Rapids, Mich.-based Warner Norcross & Judd; and Orlando, Fla.'s Broad and Cassel.
http://www.law.com/jsp/article.jsp?id=1163066728127http://www.law.com/jsp/article.jsp?id=1163066728127'NLJ 250' Shows Strong Law Firm Growth Continuing
The National Law Journal
The nation's largest 250 law firms grew by 4 percent in 2006, a figure that was just shy of last year's gains but still reflected a sound legal economy.
The results of the 2006 NLJ 250, The National Law Journal's 29th annual survey of the nation's largest law firms, revealed that 121,423 attorneys worked at those firms this year, some 4,752 more attorneys than last year.
In 2005, the top 250 law firms had 116,671 attorneys, which represented a 4.4 percent increase from 2004, when firms grew by 1.5 percent. In 2003, firms expanded by 1.6 percent.
The increase in the number of attorneys at the top 250 firms indicates that firms continue to boost their ranks to meet the demands created by a strong business economy.
The survey measured attorney populations at the nation's largest firms between Oct. 1, 2005, and Sept. 30, 2006. This year, the cutoff point for law firms to make the NLJ 250 was 172 attorneys. In 2005, the smallest firm on the list had 165 attorneys.
Partner totals showed solid growth this year, climbing by 5.1 percent compared with last year. Law firms reported that they had 48,954 partners, as opposed to 46,563 last year, when the number of partners rose sharply by 4.6 percent.
At the same time, the average number of attorneys designated as nonequity partners this year surged by a resounding 16 percent. This year, the average number of nonequity partners at firms identifying attorneys in that category was 51, compared with 44 attorneys last year.
Also showing a gain was the number of associates, which rose by 4.8 percent. This year, firms reported 61,648 junior attorneys, compared with 58,805 last year, when the number of associates rose by 4.6 percent.
The average number of lawyers identified in the "other" category, meaning that they were nonpartner and nonassociate attorneys, rose by 2 percent. This year, the average number of "other" attorneys was 43; last year, it was 42.
In general, this year's results reflect a "healthy legal economy" spurred by strong mergers and acquisitions activity and "big-ticket" litigation, said Ward Bower, a principal with Altman Weil, a law firm consultancy. He added that the climb in the partner population most likely stemmed from the large numbers of associates who were hired during the dot-com boom of the late 1990s and who now are climbing the law firm ladder. "It's a little bit of a hiring bulge coming through the system," he said.
The slight downturn in attorney population growth this year compared with last year appeared to reflect an economy that is rolling along but not bounding ahead. Sluggish home sales and high energy prices early in the year dampened enthusiasm, but record stock market performance later in the year and relatively stable inflation and interest rates brightened prospects.
In 2006, law firms continued to reconfigure themselves to meet the needs of their high-yield clients through mergers, which played a key role in the rankings this year.
Some of the larger couplings included Bingham McCutchen with Washington's Swidler Berlin; Pittsburgh-based Buchanan Ingersoll with Klett Rooney Lieber & Schorling, also in Pittsburgh; Boston-based Edwards & Angell with Palmer & Dodge, also in Boston; Palo Alto, Calif.'s Cooley Godward with Kronish Lieb Weiner & Hellman, also in Palo Alto; Philadelphia's Fox Rothschild with Roseland, N.J.-based Grotta Glassman & Hoffman; and New York's Kelley Drye & Warren with Washington's Collier Shannon Scott.
Lisa Smith, vice president of Hildebrandt International, a professional services consultancy, said that the total number of law firm mergers this year -- 52 by the end of the third quarter of 2006 -- is ahead of last year's tally of 49 mergers. In addition, she said, law firms of all sizes engaged in merger activity. "The mix is not all that different," Smith said.
She predicts mergers to remain strong next year, even as the number of high-profile target firms may be shrinking. "The market seems to regenerate itself," she said.
Smith said that she has observed "some uptick" in law firm merger activity in the last few months. Indeed, after the NLJ 250 survey was closed, Orrick, Herrington & Sutcliffe, ranked 26th, agreed in principle to merge with New York-based Dewey Ballantine, ranked 70th to create a firm of more than 1,500 attorneys.
THE BIG WILL GET BIGGER
In addition, 20th-ranked Reed Smith announced that it was merging with Chicago's Sachnoff & Weaver, also creating a law firm of about 1,500 lawyers. Also, Kirkpatrick & Lockhart Nicholson Graham, in the 23rd spot, recently announced that it was in talks with No. 99 Seattle-based Preston Gates & Ellis, which, if completed, would result in a law firm of about 1,400. Further, Day, Berry & Howard, ranked No. 166, announced its plans to merge with Pitney Hardin, a 170-attorney firm based in Florham Park, N.J.
STRATEGY OVER PITY
Law firms have learned lessons from the abundance of mergers in the last few years, Smith said. Five to seven years ago, geography and size for size's sake often were the motivators of law firm consolidation. But firms now take a much more "strategic" approach, she said, making sure that they have the client base to support consolidation and compatible firm cultures to sustain collaboration. She added that the days of the so-called pity mergers, in which one firm scoops up a firm in trouble, are gone.
"These days they're being driven for the right reasons -- about serving clients," she said.
The growth leaders this year among all NLJ 250 firms showed hefty gains, with wholesale mergers resulting in the biggest expansions. Topping the list of firms that grew the most was 75th-ranked Edwards Angell Palmer & Dodge, which, through its merger, created a firm some 50 percent larger than Edwards & Angell's size last year.
The second-biggest gainer was 68th-ranked Buchanan Ingersoll & Rooney, again representing an expansion through merger, which ballooned by 41.8 percent. In merging to become Cooley Godward Kronish, Cooley Godward grew by 29 percent and jumped into 71st place.
Other growth leaders included Fox Rothschild; Los Angeles-based Quinn Emanuel Urquhart Oliver & Hedges; Kansas City, Mo.-based Polsinelli Shalton Welte Suelthaus; Washington's Covington & Burling; San Francisco's Littler Mendelson; Orrick, Herrington & Sutcliffe; and New York-based Fried, Frank, Harris, Shriver & Jacobson. Except for Fried Frank, which swelled by 19 percent, those firms grew between 20 percent and 25 percent
THE BIGGEST DROP
The biggest decline occurred at Chicago's Gardner Carton & Douglas, which dropped by 44 lawyers and plunged by 18 percent to the 217th position. Last year the firm was ranked 173rd. It now has 195 attorneys. Some observers have questioned the firm's stability, though its leaders insist that the firm is sound. And there have been reports that Gardner Carton has been in merger talks with Philadelphia's Drinker Biddle & Reath, but, at least so far, a consolidation has not materialized. The firm declined to comment for this story.
Also experiencing a big reduction in size was Thelen Reid & Priest, which decreased to 378 attorneys this year from 454 last year, for a 16.7 percent drop. The firm, which ranked 114th this year, took the 79th spot last year.
The firm has announced a merger with Brown Raysman Millstein Felder & Steiner of New York. Thelen Reid did not return phone calls seeking comment for this story.
Other firms with sizable downturns this year were Cleveland-based Calfee, Halter & Griswold; New York-based Shearman & Sterling; Pillsbury Winthrop Shaw Pittman; Holland & Knight; Philadelphia's Wolf, Block, Schorr and Solis-Cohen; New York's Strook & Strook & Lavan; Chadbourne & Parke, also based in New York; and Pittsburgh-based Eckert Seamans Cherin & Mellot. Declines among those firms ranged from 8 percent to 12 percent.
A departure of 10 law firms from the list this year made room for 10 new firms. The firms that dropped off the list were The Cochran Firm; Austin, Texas-based Brown McCarroll; Pitney Hardin; Chicago's Neal Gerber & Eisenberg; Palmer & Dodge; Seattle-based Lane Powell; St. Louis-based Lewis, Rice & Fingersh; Steptoe & Johnson PLLC, with offices in West Virginia; Los Angeles-based Jeffer, Mangels, Butler & Marmaro; and Kansas City, Mo.-based Shughart Thomson & Kilroy.
Ten firms new to the list were Chicago's Clausen Miller; Atlanta's Fisher & Phillips; New York's Kasowitz, Benson, Torres & Friedman; San Diego-based Lerach Coughlin Stoia Geller Rudman & Robbins; Phoenix's Lewis and Roca; Morristown, N.J.-based McElroy, Deutsch, Mulvaney & Carpenter; Newark, N.J.-based Sills Cummis Epstein & Gross; Grand Rapids, Mich.-based Warner Norcross & Judd; and Orlando, Fla.'s Broad and Cassel.
Among top 10 law firms, those composing that group this year were the same firms as last year. The only marked change came from White & Case, which fell from fourth in 2005 to sixth this year. Latham & Watkins bumped up one slot this year, to fourth place. Skadden, Arps, Slate, Meagher & Flom of New York also moved up a space, to fifth place, this year.
The increases in attorney totals among the top 10 firms, up 4.4 percent this year, were in line with this year's overall results, a 4.3 percent jump.
THE GROWTH LEADER
This year's growth leader in the top 10 was Greenberg Traurig, although its rank remained unchanged, in eighth place. The law firm upped its number of attorneys by 12.4 percent, to 1,667. Also making big strides in the top 10 was Chicago-based Mayer, Brown, Rowe & Maw, which expanded by 9.1 percent, to 1,410 attorneys. It stayed in ninth place.
Jones Day, sticking to its third-place slot, lost the greatest percentage of attorneys among the top 10 firms, reducing its rosters by 5.6 percent.
The firm in the top 10 that added the largest number of attorneys was the No. 1 firm, Baker & McKenzie, which was home to 226 more lawyers than last year.
Regarding the top 20, Shearman & Sterling fell to 27th place this year, from 17th place last year. The firm decreased by 11.6 percent, to 895 attorneys.
Also falling from the top 20 was Kirkpatrick & Lockhart Nicholson Graham, which dipped to No. 23 this year from No. 19 last year. The firm's total number of lawyers decreased by 34, or 3.3 percent.
Making it into the top 20 this year at No. 15 was Paul, Hastings, Janofsky & Walker, which moved up from the 23d position last year. It increased its size by 111 attorneys, or 11.5 percent. In addition, O'Melveny & Myers rose to 18th this year from 21st last year, by adding 136 lawyers for a total of 1,043.
Another big mover in the top 20 was Kirkland & Ellis, which climbed three slots to 11th and grew by almost 15 percent.
The greatest decline in rank among firms in the top 20 occurred at Holland & Knight, which sank from the 11th spot to 14th. Its attorneys totaled 1,102, compared with 1,224 last year.
SEVERAL BIG JUMPS
Among all the law firms on the list, some experienced huge jumps in their rankings. Besides big moves by Edwards Angell, which vaulted 48 spots to 75th place, and Fox Rothschild, which gained 24 spots to 112th, Best Best & Krieger, based in Riverside Calif., made a giant leap. It powered up 32 places, from the 247th spot to 215th this year.
The advances at Best Best & Krieger were attributable to an increase in work from its public-agency clients, said managing partner Eric Garner. The firm serves as general counsel for about 30 cities in California and represents local government agencies, including water districts, throughout the state, he said. "We're increasingly seen as the go-to firm in California," Garner said.
The firm also focuses on transactional and litigation work for small and midsize businesses. Most of its attorney growth was at the associate level, he said.
Other firms with big gains up the ranks included Charlotte, N.C.-based Parker Poe Adams & Bernstein, which climbed 29 spots to 209th; and Quinn Emanuel, which jumped 23 spots to 135th.
Still other firms slid considerably in the rankings. In addition to big tumbles from Gardner Carton, which slumped 44 spots to 217th, and Thelen Reid & Priest, which spiraled down 35 spots this year to 114th place, San Diego's Luce, Forward, Hamilton & Scripps dropped 29 places to 242, and Boston's Choate, Hall & Stewart declined 28 spots to 227.
But despite those downturns, the overall outlook for the law firms included in the NLJ 250 this year is upbeat, said Altman Weil's Bower.
"There's a good bit of confidence out there," he said.