Law firm mergers and acquisitions are on track to reach an all-time high in 2017, according to the latest report released by legal consulting firm Altman Weil. So far this year, there have been 52 combinations announced, including 24 in the second quarter, topping the prior mid-year peak of 48 in 2016.
Altman Weil’s MergerLine report revealed acquisitions of firms with twenty or fewer lawyers accounted for 86% of all deals in the first quarter and 71% in the second quarter of 2017. For these deals, acquirers’ primary focus was the Midwest, including firms in Ohio, Indiana, Missouri and Michigan, and the Southern US, including firms in Florida and Texas.
“The chief driver of combinations is the battle for market share that’s being waged in response to flat or decreasing demand for law firm services, and we don’t expect that to change any time soon,” said Altman Weil principal, Eric Seegar. “Law firms of all sizes are vying to acquire new clients, expand into new markets, and upgrade their brands through quality combinations. Many of the largest U.S. firms are now routinely looking outside the domestic market for those opportunities.”
See the full report and article on The American Lawyer.
Contact Bill Sugarman for more information.
Law firm managing partners’ expressed greater optimism in the economy and legal market for the second half of 2017, according to a report released by Citi Private Bank.
The quarterly survey polled law firm leaders, 106 of which are among Am Law’s top 200 firms. Over half of those who participated in the survey expressed confidence that the second half of the year will be considerably or somewhat better than the first, indicating an uptick in overall confidence from the previous quarter.
The projections, according to the Am Law Daily, “may prove to be a bullish outlook for an industry that has been dogged by stagnant demand, particularly among Am Law Second Hundred firms.”
See the full report and article on The American Lawyer.
Contact Bill Sugarman for more information.
The announcement of the $2,000 per hour lawyer and the first-year associate starting salaries rising to $180,000 has stirred up a largely negative reaction from Biglaw clients, Above the Law reported. After the first-year salary news release, Bank of America’s global general counsel made their opinions very clear in an email that’s become public, “we are aware of no market-driven basis for such an increase and do not expect to bear the costs of the firms’ decisions” (Above the Law). According to BTI Consulting Group, the $2,000/hour billable rate structure reflects a shocking 25% increase from 2014’s highest rates, as reported in The American Lawyer.
According to Above the Law, the increase of compensation and rates at large law firms will likely open a door for “value” firms, making them more attractive to legal departments at corporations. The technology and tools available today make it possible for smaller firms to have access to the resources that Biglaw can provide to its corporate clients. Social media outlets and digital publishing software play a large role in making it easier for smaller firms or lawyers to make themselves more reputable to a larger audience. The release of these two pieces of news has created an optimal time for small and medium firms to take advantage of impressing corporate counsel (Above the Law).
For more information, contact Bill Sugarman.
In conjunction with the Am Law 100 results, the American Lawyer released their annual Am Law Second Hundred report, which includes data and rankings for the top Second Hundred U.S. law firms (firms 101-200). The 2015 financial report indicated that the Am Law 200 fell even further behind the Am Law top 100. In comparison to the 2.7 percent increase that the Am Law 100 experienced in 2015, gross revenue dropped by an average of 3.2 percent for the Second Hundred firms. Despite the underwhelming results, the top 200 managed to reach a 0.1 percent raise in average profits per partner and a 0.3 percent gain in revenue per lawyer. However, results are still less than impressive compared to last year’s 2.1 percent gross revenue increase.
The most recent version of the report reveals Manatt leading the Second Hundred with a 6.9 percent increase from last year and a gross revenue of $324 million. Shook Hardy, 2014’s front runner for the Second Hundred, slipped one spot this year and ranked at No. 102. Dykema Gossett experienced the most significant growth, jumping to No. 130, moving up 29 spots from 2014.
See more of the highlights from the 2016 Am Law 200 on The American Lawyer.
Contact Bill Sugarman for more information.
The American Lawyer just released the results of the most recent Am Law 100, their annual financial report of the top 100 U.S. law firms. Overall, the data revealed only slight increases for the firms overall, with the average profits per partner increasing 4 percent since 2014 and the total net income up by 3.3 percent. Latham & Watkins claimed the number one slot for gross revenue for the second year in the row, with an impressive $2.65 billion over the last-place contender’s $332 million (Kramer Levin). The ever-growing Polsinelli tied with Locke Lord for the biggest change in their Am Law 100 rankings, each increasing by twelve spots from the previous year. And predictably, major big law firms Latham, Greenberg Traurig, Mayer Brown, and Reed Smith worked their attorneys to the bone to claim the most billable hours in 2015, with DLA Piper leading the pack at over 5.5 million hours–an astonishing 2 million-plus hours over the second-place Latham.
See more of the highlights from the 2016 Am Law 100 on The American Lawyer.
Contact Bill Sugarman for more information.
Mega-firm Reed Smith had a rough year in 2015, The American Lawyer reports–a year that perhaps led to the highly publicized 45-lawyer layoff in January 2016. According to their annual Am Law 100 report, gross revenue fell 2.5 percent, revenue per lawyer went down by 1.4 percent, and profits per partner declined an alarming 8.3 percent.
However, global managing partner Sandy Thomas called the results “solid,” and told press that the layoffs were simply an “efficiency measure,” although he also referred to the slumping commodities market, noting that “we are not immune,” (as quoted in The American Lawyer).
Law360 recently released their annual Glass Ceiling report, ranking ten firms above their peers based on the percentage of women in their ranks. Milwaukee-based Quarles & Brady outpaced the other 300 U.S. firms to win the number one spot. Quarles is also the only firm on the list to have a female chair. Akerman came in eighth, and law firm giant Baker & McKenzie took home the bronze.
Quarles & Brady chairwoman Kim Johnson attributed a variety of equality practices to the win, including an “equal opportunity” approach to promotions, which ensures that a minority is considered for every open position, and simply “making female attorney support and retention a priority,” (as quoted in Law360).
Astor Professional Search president Bill Sugarman quoted in Law360, discussing the Midwest legal market: http://www.law360.com/articles/789064/midwest-firm-falls-victim-to-cutthroat-lateral-market
In a profession “less diverse than doctors or engineers [who are] 88 percent white,” says Danielle Holley-Walker, dean of Howard University Law, the legal community is still struggling with diversity (as quoted in the ABA Journal). In fact, the recently released Vault/MCCA Law Firm Diversity Survey found that out of 250 law firms, an overwhelming 84 percent of attorneys self-identify as white/Caucasian, with only 3 percent identifying as African-American, 6 percent as Asian-American, and another 3 percent as Hispanic/Latino. The report also concluded that while the recruitment of minorities has slightly increased, the attrition of these minority attorneys is still occurring at a disproportionate rate.
Perhaps even more alarming is the ‘double jeopardy’ plight of minority women in law. The ABA Journal reported in their March issue headliner that an astounding 85-percent of U.S. minority female attorneys will quit their large firms within seven years of starting their practice. And, minority racial status aside, “women account for only 18 percent of equity partners in the Am Law 200 and earn 80 percent of what their male counterparts do for comparable work, hours, and revenue generation,” reported the 2015 survey by the National Association of Women Lawyers (as quoted in the ABA Journal). Add race back in to find that minority women accounted for a mere 2.55 percent of partners in 2015, rendering them the “most dramatically underrepresented group at the partnership level, a pattern [holding] across all firm sizes and most jurisdictions,” (NALP, as reported by the ABA Journal).
So, in light of the many disturbing statistics, what can and are law firms doing today to help bridge the inequality gap? Howard law dean Holley-Walker suggests that young minority lawyers should make an extra effort to build relationships with partners, who serve to not only mentor them now, but eventually to act as a sponsor, ready to “go to bat” for the younger attorney (as quoted in the ABA Journal).
And it appears that some firms are already going the extra mile. Above the Law released the results of their 2016 Law Firm Gender Diversity Index, which classified over 200,000 attorneys and assigned grades based on each firm’s gender diversity statistics. Milwaukee-based Quarles & Brady stood out in the top six of all firms, and was awarded an A+.