In-house attorneys have always extolled the abolishment of the billable hour as a major plus over traditional firm life.  But now, The American Lawyer reports that the time sheet “seems to be gaining popularity with in-house lawyers,” many who have begun using the it as a way to prove their worth to their employers.

Stephen Kaplan, general counsel and executive vice president of XOS Digital, is a strong proponent of the time sheet, having started tracking his own hours over a decade ago.  Kaplan notes that “the legal department is one of the only departments in companies that, without tracking hours, has difficulty coming up with the metrics that prove the company’s return on investment is worthwhile”–metrics that, since the recession, have become “increasingly important in the eyes of chief financial officers,” (as quoted in The American Lawyer).  Kaplan further points out that the job of every CFO today is to “ask the hard question of every single member of every single company: Why are you here?”

Although in-house attorneys, as non-income generators for the company, may have the most to gain from using time sheets to prove their value, some companies are now requiring all departments to report billable hours for clients.  Adam Rubin, general counsel for PrizeLogic, says that tracking hours is standard at his company, and observes that “this is a trend, not just for lawyers, but for all employees,” (as quoted in The American Lawyer).

Of course, many attorneys still feel that tracking billable hours is a unnecessary and time-consuming burden.  Rubin argues that basing the worth of an in-house lawyer solely on the hours worked means that “you’re missing out on a more important analysis of the employee,” (The American Lawyer).

Kaplan concedes that tracking time may not be necessary if “you are naturally very organized or if you work in a department where your value has never been called into question,” but concludes, “How many of us are in an environment that checks both of those boxes?”

Last year saw the dissolution of several high-profile firm mergers, yet still boasted a record 91 successful law firm amalgamations (Altman Weil).  However, closely following the recent termination of merger talks between Greenberg Traurig and London’s Berwin Leighton Paisner, consultancy Gulland Padfield released the results of a study claiming that the “majority of law firm mergers fail to deliver benefits to clients and risk damaging partnership value,” (as reported by The American Lawyer).

James Edsberg, a partner at Gulland Padfield, says that while mergers can be “genuinely transformational…the majority of the law firms only do it if they absolutely have to,” (as quoted in The American Lawyer).  The report found that many mergers fail because of the “lack of a coherent plan to capitalize on the combined client relationships,” being instead too focused on the purely operational aspects of the integration (The American Lawyer).  Edsberg adds that the “litmus test of any merger should be whether the combined firm can bring value to clients in a way that the old firms couldn’t on their own,” (as quoted in The American Lawyer).

Read more on the report and see the indicators of a good merger here.

Schiff Hardin laid off seven current associates and retracted offers for four incoming associates yesterday, reports the ABA Journal.  This comes after the widely publicized mass exodus of 22 partners in January, which included Schiff’s former managing partner.

Schiff isn’t the only big law firm that’s conducted massive layoffs this year.  Reed Smith and Baker Donelson have also cut large numbers of attorneys and support staff in the recent months.  In January, Reed Smith, the 19th highest-grossing law firm in the U.S. last year, laid off 45 attorneys and an unspecified number of staff, announced the Wall Street Journal.

Schiff Hardin managing partner Marci Eisenstein said in her statement that, despite the layoffs, the firm is “coming off a record year,” and are anticipating “another strong year in 2016,” (as reported by Above the Law).

BTI Consulting recently analyzed over 300 law firms to identify the key characteristics shared by the most profitable law firms, observing that while “rates can help…the outsized profits come from behaviors, strategies, and culture.”

On the client side, these behaviors include concentrating the firm’s focus in certain practice areas or industries, targeting clients that tend to have a continuous stream of work, and proactively engaging with and discussing the clients’ business, even before active matters arise.

BTI also found that the most profitable firms encourage socialization among partners, in order to create a collegial environment that encourages cross-selling and collaboration for increased business development.  They conclude that “the more you can push the behaviors and strategy into the culture–the better your profits.”

See the other habits and read more here.

The “vast majority” of lawyers and staff from Houston-based IP boutique Novack Druce Connolly Bove & Quigg will be absorbed into the fast-growing Polsinelli, according to recent reports by The American Lawyer.

Polsinelli chairman and CEO Russell Welsh told The American Lawyer that acquisition by Polsinelli, which currently has just over 700 attorneys, will enhance their already “robust IP practice,” especially in the burgeoning area of post-grant patent reviews (as quoted in The American Lawyer).

Novak Druce, which had 140 attorneys in 2012, has been losing “a stream of partners to competitors,” The American Lawyer reports, including Drinker Biddle, Reed Smith, and Dykema Gossett.  This mirrors the ongoing trend for intellectual property boutiques in the recent years, many of which have been struggling and have since been absorbed into or have had partners taken by mid-sized, full-service firms like Polsinelli.

Ranked the fast-growing firm for the seventh year in the row, Polsinelli has experienced continued success in their expansion efforts, with revenue rising 11.4 percent in 2015 (The American Lawyer).  Their now-proven strategy is to concentrate growth in low overhead markets in order to compete for health care work and other “price-sensitive assignments.”  Todd Dickinson of Novack Druce’s executive committee agrees with their method, telling The American Lawyer that Polsinelli utilizes a “Midwest sensibility about rates that’s client friendly.”

Finding a foothold in the Chicago market isn’t as easy for the elite ‘big law’ firms as they might like to believe, reports Claire Bushey of Crain’s Chicago.

The article looks at three national firms that had big aspirations for growth upon their respective moves to Chicago: Paul Hastings, Ropes & Gray, and Morgan Lewis & Bockius.  New York-based Paul Hastings, for example, opened its Chicago doors in 2006, initially recruiting top partner talent and reporting goals of a 100+ lawyer office.  Ten years later, the office boasts of only 42 attorneys.  Former managing partner of the office, Rick Chesley, says that its the tough Chicago competition that forces firms to really consider their client base: “If you haven’t thought about who your clients are, who you’re going to compete with…you’re going to fail,” he said (as quoted in Crain’s).

Similarly, Boston-based Ropes & Gray opened eight years ago with predictions of a 100-lawyer headcount within two years.  The Chicago office has only 64 attorneys to date–a stark contrast to their London office, which went from 2 attorneys at their 2010 opening to 129 today.

Anthony Nasharr, Managing Partner of the Chicago office of Polsinelli, believes that firms looking to expand into Chicago need to be “chasing work characteristic to the city, like agribusiness or financial services” (as quoted in Crain’s).  Polsinelli, a firm headquartered in Kansas City, has proven that they have the right approach for Chicago growth, successfully growing their six-attorney starter office to almost 100 in just eight years.  Nasharr also notes that a new Chicago office requires strong support from their headquarters to help the office thrive–like supplying the funds to bring on quality lateral partners.  Much Shelist Managing Partner Mitchell Roth agrees that the need for good talent is critical to success in any major market, but argues that acquiring that talent can prove difficult: “To open a five-person office and expand to 100 in one or two years, when everyone’s trying to buy the exact same talent?  It’s next to impossible,” he says (as quoted in Crain’s).

Despite the difficulties, six out-of-town firms merged with Chicago firms last year–more than in any other city, Crain’s reports.  However, former Kirkland & Ellis partner Steven Harper warns the newcomers not to be fooled into thinking their high-profile reputations will be their be-all, end-all for attracting clients: “These firms believe that…clients will flock to the brand.  Well, maybe not.  Probably not,” he cautions (as quoted in Crain’s).

Seeming to defy the laws of supply and demand, hourly billing rates at national corporate law firms have increased 3 to 4 percent per year since the recession, according to Citi Private Bank’s Law Firm Group (The Wall Street Journal).  In fact, they report, these rates have continued to rise in spite of weak demand and low inflation.

A recent study of bankruptcy cases revealed that “senior partners routinely charge between $1,200 and $1,300 an hour, with top rates at several large law firms exceeding $1,400” (The Wall Street Journal).  Legal consultant Bruce MacEwen observes that “you have a very few people at the very top where price is almost no object,” allowing for the best-of-the-best lawyers to charge an astounding $1,800-plus hourly rate (as quoted in The Wall Street Journal).

While demand for legal services has only risen 0.5% in the past year, revenue has risen by 4%, according to Wells Fargo Private Bank’s Legal Speciality Group.  Heightened rates help to increase this revenue, and are consistently raised to soften the blow of client-demanded discounts, an increasingly common practice.  By implementing an annual rate increase, says an Altman Weil legal consultant, law firms are able to offset clients’ requests for discounts (The Wall Street Journal).  

John Altorelli, finance lawyer at DLA Piper, laments that “we just raise them every year,” referring to the hourly rate system as “anachronistic” (as quoted in The Wall Street Journal).  However, many firms contend that raising rates are a way to “guarantee salaries or ensure a partner’s pay doesn’t fall, even in the down years,” allowing them to attract and keep the top talent (The Wall Street Journal).

Still, argues legal consultant Bruce MacEwen,”if clients are pushing back on rates, the answer isn’t to raise them, and then ask for a discount…the answer is to provide a better total value” (WSJ).

Read more and see the top law firm billers at the Wall Street Journal.

Intellectual property boutique Brinks, Gilson, & Leone lost four litigation partners to Midwest-based Barnes & Thornburg last week, according to The American Lawyer.  This follows the recent trend for IP boutiques, many of which have either been absorbed by larger firms or have also had an unusually large number of partners depart.

John Gabrielides, one of the four partners that moved to Barnes, explained that they felt “limited in the services we could offer to our clients” at Brinks Gilson, and that joining a full-service firm “gives us a lot more flexibility and latitude” (as reported by The American Lawyer).

Who do the Fortune 500 corporations turn to when they need intellectual property litigators?  According to a recent survey by The American Lawyer, these companies don’t rely exclusively on the giant brand-name law firms, but instead often depend on mid-sized IP firms for their defense.  See the survey results at: http://www.corpcounsel.com/id=1202737903224.