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The American Lawyer released a recent report, conducted by LexisNexis’ legal pricing data service, CounselLink, which revealed the gap between partner hourly rates for firms with 750+ lawyers and firms with 501-750 lawyers continues to grow. According to the report, the gap between the two groups widened by 11 percent over 2016, with the bigger firms now demanding a whopping 45 percent higher rate on average than their less gigantic counterparts.

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The report also revealed rate increases were higher and more widespread than in previous years. The report showed that Seattle, Chicago, Los Angeles and Boston all rivaled New York for partner billing rate increases. The Big Apple firms still led the pack, with a 5.7 percent growth rate. But firms in those other cities experienced greater than 4 percent annual growth in their rates. Nationwide, partner rates increased an average of 3 percent, with Minnesota, Georgia, Oregon and California seeing the highest increases on a statewide basis, (as quoted in The American Lawyer).

See highlights from the full article on The American Lawyer.

Contact Bill Sugarman for more information.

The American Lawyer released results from its annual Lateral Report, which tracked lateral movement strategies among the nation’s largest and most successful law firms. The report, conducted by ALM Intelligence, reported 2,895 lateral moves among Am Law 200 firms in 2017, decreasing 2.3% from 2016. According to the report, law firm leaders reported a variety of strategies aimed at improving lateral hiring such as geographic expansion, spending top dollar on superstar partners, hiring lateral groups, recruiting experts in other fields, and expanding lower cost-firms in larger markets.

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Chicago-based Winston & Strawn hired the most lateral partners of any Am Law 200 firm, the report revealed. The firm brought on 73 partners, representing nearly 22 percent of its partner ranks. DLA Piper hired the second-most partners, 69—a mere 5.7 percent of its partnership. The next three firms to grow their partner ranks by more than 10 percent through lateral hiring included Cozen O’Connor, Fox Rothschild and Hogan Lovells opening new offices in Pittsburgh, Los Angeles and Seattle, respectively (as quoted in The American Lawyer).

Kansas City, Missouri-based Polsinelli is another firm to see recent growth in the lateral partner market. Much of the firm’s recent growth has been in Chicago, where it has grown from just six lawyers in 2006 to 99 as of last December. The firm has found success recruiting from some of the city’s legacy firms, many of which have pursued a more international, higher-profit model (as quoted in The American Lawyer).

See highlights from the full article on The American Lawyer.

Contact Bill Sugarman for more information.

Law firm financial performance finished 2017 on a positive note, with a larger segment of the legal market contributing to upward trends in revenue and profits than in recent years, according to a new report by Wells Fargo Private Bank’s Legal Specialty Group.

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The report, drawn from a survey of 160 firms, reported that law firm revenue and profits were up between 3 percent and 4 percent for the legal market overall. Firms in the Am Law 50 reported revenue growth of 6.8 percent in 2017, while the Am Law 100 as a whole reported a 5.26 percent increase in revenue. Firms in the Am Law Second Hundred saw a smaller revenue uptick of 2.33 percent in 2017, the report revealed (as quoted in The American Lawyer).

“The enthusiasm is derived from a slight-to-moderate improvement in transactional activity,” the Wells Fargo report said. “Most believe the corporate tax changes and a general improvement in our economy will buoy corporate, M&A, capital markets, and other transactional work.”

See highlights from the full article on The American Lawyer.

Contact Bill Sugarman for more information.

In-House Counsel at large international companies experience greater satisfaction when working with small or medium sized firms, according to a new survey reported on The American Lawyer. The survey, released by The Lawyer Research Service in collaboration with Globality, found respondents at large global companies are three times more dissatisfied working with larger law firms (19%) than smaller ones (6%).

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Of the 71% of respondents that outsource the majority of work to smaller firms, nearly two-thirds (63%) report smaller firms provide better client service and almost half (40%) find smaller firms to be more innovative than traditional Big Law firms. Additionally, companies are becoming increasingly turned off by large firms due to their high prices, with over half of survey respondents saying their primary frustration when working with larger law firms is cost.

“We get better client service from smaller firms. When we instruct larger firms, we are probably one of their smaller customers and just another customer in the long list they already have. If you go to a smaller firm, even with a fairly small legal spend, we can be an important customer to them,” said Ben Woolf, General Counsel EMEA at Tate & Lyle, a U.K.-based multinational agribusiness, in a press release announcing the survey results.

See highlights from the full article on The American Lawyer.

Contact Bill Sugarman for more information.

The American Lawyer reports that there’s plenty to look forward to in 2018, according to partners at two of the largest Am Law 100 firms. DLA Piper co-chair Roger Meltzer, for one, expects a rise in corporate transactional work due to “very robust capital markets” and an increase in M&A, including in the middle market. Ora Fisher, one of two vice chairs at Latham & Watkins and a member of the 2,280-lawyer firm’s executive committee, also expects good times to persist. “Assuming the global economy continues to grow, we see a whole lot of demand for our transactional practices and all the related practices that support them,” Fisher forecasted. In addition to transactional work, Fisher said she expects a rise in demand for complex trial litigation, white-collar criminal defense work, privacy and cybersecurity matters, and financial regulatory work globally (as quoted in The American Lawyer).

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See highlights from the full article on The American Lawyer.

Contact Bill Sugarman for more information.

The American Lawyer released a recent article reporting that a number of midsized law firms have doubled down on their commitment to secure, and deepen existing relationships with midmarket clients. According to the article, law firm leaders in the middle market segment, which generally includes businesses with $50 million to $500 million in annual revenue, agree deep-rooted relationships are extremely common among law firms that service midmarket clients.

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Law firms with roots in major markets are also finding ways to prosper in middle-market locations. For some midsized firms, including Cozen O’Connor, Ballard Spahr and Fox Rothschild, that has spurred geographic expansion across the country. For others, like McCarter & English and Vorys Sater Seymour & Pease, it has meant doubling down in the region where they already have roots.

“Midmarket companies are normally always in growth mode, so as they’re growing there are opportunities to grow with them and expand the amount and type of work that you’re doing for them. They have the same sophisticated work that larger Fortune 1000 companies may have. The number of zeroes may not be the same, but the sophistication of the work is and the complexity of the matters are,” notes Cozen O’Connor’s CEO, Michael Heller.

ALM journalist, Lizzy McLellan concludes, “the perception of value often attracts midmarket clients to firms with a more affordable rate structure than the very top of the Am Law 100 offers. Sometimes that means a national Am Law 100 firm in the second 50, like Cozen O’Connor or Fox Rothschild. But it can also mean a midsize firm like Pryor Cashman or a regional Am Law 200 firm like McCarter & English.” McCarter & English’s chairman, Michael Kelly, notes “the big expensive firm gives them cover, but I can tell you with no uncertainty that we will do a better job with less cost.”

See highlights from the full article on the American Lawyer.

Contact Bill Sugarman for more information.

The American Lawyer reports on several key trends from this year and what we can expect for the legal industry in 2018. According to the article, key trends that we can expect to continue into 2018 include increases in law firm mergers, lateral moves within groups, and enhancements in legal technology innovation and the business operations of firms.

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2017 is set to be a record year for U.S. mergers. So far this year, there have been 85 mergers and acquisitions involving U.S. law firms in 2017, according to Altman Weil data—just six shy of the all-time record, set in 2015. But while several large-scale tie-ups hit the headlines, the overwhelming majority of deals in 2017 were extremely small: Over 90 percent involved at least one firm of under 100 lawyers, while more than two-thirds were acquisitions of firms with 10 lawyers or fewer (as quoted in The American Lawyer).

Last year also saw a large number of lateral moves that involved practice groups within targeted geographic markets. “I think there’s more and more pressure to grow breadth and depth, and laterals and groups are a big part of that for many or most firms,” notes Kent Zimmermann, a consultant at The Zeughauser Group.

In 2017, law firms continued adopting legal project management techniques to get a better grip on what matters actually cost. Am Law’s article reports more firms will adopt better pricing tools; legal operations staff will gain power inside legal departments; and the traditional competition for Big Law work will be upended. That won’t happen everywhere all at once next year. But better technology will make the change begin to gather speed. “The entire industry is stuck on the billable hour because it doesn’t understand its unit costs,” says Keith Lipman, President of the legal tech company Prosperoware. “If we get to the point of managing unit cost, law firms can actually get away from the billable hour. So, the faster you collect data to understand that is critical” (as quoted in The American Lawyer).

See highlights from the full article on The American Lawyer.

Please contact Bill Sugarman for more information.

Millennials make up the largest generational group among lawyers at large and midsize firms, according to a report released by ALM Intelligence on Law.com.

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Data collected by ALM Intelligence reported millennials (ages 18 to 36) now outnumber lawyers from Generation X (ages 37 to 52) and baby boomers (ages 53 to 71) at firms in the Am Law 200 and The National Law Journal’s NLJ 500. According to the report, millennials make up 43 percent of lawyers at nearly 400 of the nation’s top law firms included in ALM’s data. Millennials represent 88 percent of associates and only 5 percent of partners. Generation X lawyers make up 52 percent of partners, and baby boomers make up 40 percent of partners.

“The numbers starkly illustrate the reality facing law firm leaders: Millennials will soon take over the legal profession in sheer numbers—and soon enough they’ll dominate leadership positions and partnerships too,” ALM journalist, Lizzy McLellan reports. “Employing millennials appears to go hand-in-hand with profitability—illustrating how Big Law continues to use rainmakers to land major clients and young lawyers to put in long hours serving them.”

See the full report and article on The American Lawyer.

Please contact Bill Sugarman for more information.

The American Lawyer released its annual New Partners Survey, which included responses from 400 lawyers promoted to firm partnerships in 2015, 2016 or 2017. The report revealed that an overwhelming 88 percent of new partners said their firms adequately prepared them for partnership. Almost 80 percent of new partners who answered the survey said their business development efforts increased, along with their compensation and information they received regarding their firm’s finances.

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The ALM survey this year also found that two-thirds of new partners were elevated into non-equity or income partner roles. About 40 percent had spent seven, eight or nine years as associates at the firm where they made partner, and more than half had never changed firms. No single practice area dominated in partner promotions, though litigation represented almost a quarter of the survey pool.

See highlights of the full report and article on The American Lawyer.

Contact Bill Sugarman for more information.