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).
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
Intellectual property firm Kenyon & Kenyon neither confirmed nor denied rumors that they will be canceling their summer associate program, the ABA Journal reports. The firm said in a statement that while they “have not officially cancelled [their] summer associate program,” they “cannot say with any certainty there will be a summer program at this time,” (as quoted in the ABA Journal). Although the firm has not yet rescinded their offers to summer associates, they told them that they understand if they “may feel the need to explore other opportunities.”
AmLaw Daily reported in October that the IP giant lost 16.4 percent of their attorneys in 2015 and “watched a steady stream of partners head for the door.”
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+.
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.
Baker and McKenzie retains its title as the best-known law firm in the world, according recent rankings by UK-based research firm Acritas. However, although the “sun never sets on Baker & McKenzie’s empire,” reports The American Lawyer, “challengers continue to make progress against established, old-line firms in the minds of senior counsel at big corporations.”
Chief executive of Acritas, Lisa Hart Shepherd, observes that they are “continuing to see a decline, in the brand sense, of premium-priced brands,” but notes that global brand awareness is not easy to build in today’s increasingly fragmented market, where the average client works with 12 firms (as quoted in The American Lawyer).
If possible, however, corporate clients tend to favor sticking with their current domestic firms for any international work, said Shepherd. She adds that “once attention is won,” firms can keep such clients through “the promise of a great client experience and, for much of the work, good value” (as quoted in The American Lawyer).
Mary Young, a consultant at the Zeughauser Group, is quoted by The American Lawyer as advising any law firm trying to enter new markets to consider “what you can offer that others can’t, or what relationships you can leverage that others cannot.”
The Acritas surveys also found that many companies coveted more business-savvy firms–one client explaining that it gives the firm a competitive edge by being able to have a better understanding of potential risks and gains.
Read the full article at The American Lawyer.