Despite this being the busy season for the hiring and (in the few firms that cling to the traditional calendar) onboarding processes, things have been relatively quiet lately. Actually, we almost forgot about deferred associates – some of the members of the “lost” Class of 2009 are finally starting to trickle back to BigLaw.
Bimodal distribution is still the bugaboo of the legal industry. In the BigLaw section of the curve (i.e., that big spike out to the right), the good news for incoming associates is that $160,000 is still the norm for the largest firms in the top markets, despite some drift back to the left over the past few years as firms dropped down to $145,000. Don’t expect to hear cries of “NY to 180k” for at least a little while yet, even though the official word is that the recession ended in June 2009 (which coincides closely with the end of the peak of law firm layoffs). Flat is still the new up, and most of 21 managing partners who did an impromptu straw poll are optimistic.
Those salaries have to be supported by income, though. And no place beats New York for billable rates.
Unless you count the entertainment industry. Then, $900/hour is a bargain compared to the traditional commission-based structure for literary agents.
After the jump, we focus exclusively on the firms this week. No client work – we’ve got rankings, mergers, laterals, and, of course, layoffs.
Nothing beats cold, hard cash, and that’s where the Global 100 rankings come to play. The Americans have made a nice push, with Baker & McKenzie, Skadden, and Latham & Watkins going 1-2-5, bumping the Magic Circle firms a few notches.
There’s now even a “Recession Performance Index,” which is pretty similar to something we did last year (although we were far less grandiose) – analyzing layoffs at top-grossing firms. K&L Gates comes out on top, according to AmLaw, followed by Covington, McGuireWoods, Fish & Richardson, and Bingham.
It’s not just firms looking for the BBD, individual lawyers and small practice groups are on the prowl, too. The American Lawyer is reporting evidence that lateral moves are on the rise. Legal Intelligencer finds similar buzz in the Pennsylvania market, as laterals wax after a two-year lull.
Some firms are losing abnormally large numbers of lawyers. Depending on who goes, that can be a good thing or a bad thing – firms cutting dead weight or losing top talent. Decide for yourselves on a case-by-case basis. Three firms to take a look at are White & Case, which is down about 30, including the baker’s dozen that have gone to Latham & Watkins (against about 12 new partners, a number of whom weren’t partners at their previous firms and not counting the people given the partner title in an off-cycle round); Nixon Peabody, which has lost 10 partners to DLA Piper, another seven to Pillsbury, plus at least nine others to various firms, against about five new partner hires; and Howrey, which has lost at least 30 partners this year, including a huge defection just last week, and brought on two.
Big mergers don’t get done without BigLaw (and M&A activity had a nice bump in Q3), but big mergers IN BigLaw are relatively rare. That’s why news of the short-lived negotiations between Akin Gump and Orrick Herrington got so much attention. Alas, it was all sound and fury, signifying nothing. Well, not too much sound and fury – some of the firms’ partners had to read about the proposal online. And some weren’t too happy about it anyway. In this era of cherrypicking assets (something Orrick is famous for), one partner described this as like “picking up a baseball team just to get a shortstop.”
Reed Smith and Thompson & Knight are the two big firms currently in the “just dating” phase. Unlike the spate of trans-Atlantic flings, this one is almost all US, with Reed Smith coveting Thompson & Knight’s access to the lucrative oil & gas work in Texas. Reed Smith has been down this path before, having acquired at least four firms in the past couple of years.
And over in APAC, Allens Arthur Robinson from Australia (how alliterative) and Japan’s Nagashina Ohno & Tsunematsu have merged. Both are considered top native firms in their homelands and the tie-up will help them compete against the British (and to a lesser extent, American) Invasion of the region by firms looking for mining work in particular.
Another hot practice area is IP, which is the impetus behind Nelson Mullins and Lahive & Cockfield’s merger.
Sonnenschein Nath & Rosenthal and Denton Wilde Sapte did the BigLaw equivalent of a Vegas wedding. The two firms went from negotiations to consummation in about four months, as the merger went effective Oct. 1. Big as the combined firm is, we’re just SNoRing about the newly branded SNR Denton. (DLA Piper, we blame you for this wave of crap names)
SNR Denton claims it’s the clients who want these tie-ups and the powerless lawyers are just acceding to those demands.
Every time we feel justified in not overhauling the layoff tracker due to lack of news, some firm comes along and re-opens that can of worms. Most recently, Husch Blackwell & Sanders had its third round of layoffs, in which approximately 20 lawyers were let go. We were just in the middle of a nice 43-day run, the second-longest period without a layoff since we’ve been tracking. The reigning titleholder (a/k/a top party-pooper) is Townsend and Townsend and Crew, which on August 19 ended a 52-day run at the top by Eversheds. Small consolation: Eversheds remains the only firm to have laid off more than 100 people in 2010.
Even though we only track layoffs at major firms, we try to report on those we hear about from other firms. In the UK, Bevan Brittan has had its third round of layoffs, this time 26 people, split between associates and support staff.
Hildebrandt expects more layoffs to come. They’re saying as many as 17,500 non-partner BigLaw jobs are at risk. The way they got to the number is a bit dodgy, but they’re identifying the right vectors to be concerned about: reduced hiring (to match reduced demand); client-demanded efficiency (especially outsourcing) and price concessions; and cramming work down to non-associate lawyers. We’d also add forced attrition by way of increasing stealth layoffs to the mix.
Major law firms have laid off at least 675 people this year (221 lawyers, 454 staff). Since the beginning of 2008, major firms have laid off at least 14,886 people, of whom 5,807 are lawyers and 9,079 are staff.