N. CA-based Firm Leaders Hopeful For A Better Year

Today’s Recorder contains an article about 2010 revenues and profits at eight Northern California based law firms.  It also reports on interviews with some of the firms’ leaders about what they are expecting for the future. 

Read the whole thing here.  Notably, head count at six out of the eight firms dropped in 2010. 

One highlight:

“Extreme caution about hiring remains the rule – even at firms like Morrison & Foerster, where revenue per lawyer was up a healthy 6 percent. Chairman Keith Wetmore said MoFo’s biggest challenge was aligning head count with work levels. ‘We’re being very careful not to let groups hire ahead of demand,’ he said. ‘We’ve also managed costs and staff head count aggressively, not replacing people when they leave, restricting travel costs and revisiting our marketing and tech budgets.'”

Experts: Legal Market Stabilizes, But At Well Below Pre-Recessionary Levels

The latest annual Hildebrandt/Citibank Client Advisory is out.  We’ve posted about the Client Advisories before (see here). 

You can access the whole report here.

Among other things, it predicts:

  • continued sluggish demand for legal services on the part of corporate clients
  • associate recruitment goals have stabilized at levels much lower than in pre-recession years and are likely to remain there for the foreseeable future.

Some Biglaw Financial Forecasting

The National Law Journal recently conducted a roundtable with 3 managing partners at large DC-based firms.  They talked about staffing, rates, client demands, lateral recruiting, the political landscape and the future of the legal business model.   A summary of the discussion appears here.   

You should read the whole thing, but a few highlights:

  • IP litigation was unexpectedly slow in 2010, but is expected to increase in 2011
  • things have stabilized, but not likely to get significantly better in 2011
  • the expected increase in the government regulatory area did not materialize and the results of the mid-term elections suggest that it may never materialize
  • no one is expecting layoffs and salaries and bonuses have been — and are expected to continue to be — unfrozen
  • clients are expected to continue exerting pricing pressures; the billable hour will not disappear, but the use of alternative fee arrangements will continue to increase
  • we can expect to see a continuing of the trend of increased merger activity and lateral movement by partners and practice groups to competitors 

Latest on Working Part-Time in Biglaw

NALP, the Association of Legal Career Professionals, just released its annual analysis of the use of part-time schedules by lawyers at law firms. 

The headlines are that part-time lawyers remain the exception and that their ranks are comprised mostly of women.  However, the number of male partners practicing part-time “edge[d] up.”

Q 3 Numbers: Large Law Firms Lose A Little Bit of Ground

The well-known legal business consulting firm Hildebrandt Baker Robbins just published a report of its Peer Monitor Index, which includes information about key law firm business metrics for July – September of 2010.

You can read a summary of the report here.  You can read the whole thing here.   

Among other things, the report shows that — very much in line with how the overall economy performed in Q 3 — the market (at least for large law firm legal services) lost a bit (but, by no means, all) of the ground it (ever so slowly) was gaining over the previous several months. 

Demand for services was down 1% over last year.  Productivity [hours per attorney] actually fell by .4%, which reversed a recent trend of modest increases (though the rate of increase showed some slowing in the previous quarter).  The gains in the previous quarters had largely been due to headcount reductions.  The report summary states:

“Reduced productivity is pressuring firm profitability and may cause firms to re-evaluate their hiring patterns in the face of weak demand and pricing. This is particularly relevant because many previously deferred new associates are scheduled to begin work in early 2011.”

We’ve regularly blogged about the Peer Monitor system before (click here to view the most recent prior post), but to refresh you , it is a service that allows law firms to access their peers’ financial data (in the aggregate) in exchange for supplying their own data to the system for others to access (on a normalized and aggregated basis).  There are 35 Am Law 100 firms, 35 Am Law 200 firms and 30 NLJ 250 firms in the system.  You can find more information about the Peer Monitor system here.

Passage of Dodd-Frank Bill Will Increase SEC Enforcement Activities

Today’s Recorder contains an article written by a partner in Covington & Burling’s SF office who predicts that the SEC will ramp up its enforcement activities as a result of new powers conferred by the  Dodd-Frank Wall Street Reform and Consumer Protection Act. 

Unfortunately, the article is password-protected, so you will need to get the print version either in the CDO or in the main library.

But, the career-related take-away for us is that we can expect the SEC to be busier than ever (as well as the law firms that do SEC enforcement work and/or those that have securities litigation practices and/or those that represent financial services clients).

As the article concludes:

“Dodd-Frank has ramped up the SEC’s enforcement mandates to a level greater than at any time since the agency was created. Its jurisdictional reach is broader, the number of causes of action it can bring has increased, and its available remedies have expanded. Public companies, regulated entities and hedge funds, as well as their officers, directors and employees, should prepare for a significant increase in SEC enforcement activity.”    

Legal Employer Survey: Some Expect An Increase in Hiring Levels

A brief article appearing in the Recorder and on the Legal Pad blog (via reports on a survey commissioned by one of the major legal staffing companies, Robert Half International.   

100 lawyers (at firms with 20 or more employees) and 100 in-house lawyers (at companies with at least 1000 employees) were surveyed.

59% expect no change in the number of full-time legal personnel at their employer in the 4th quarter of 2010.  29% expect an increase (though the survey apparently did not inquire into the extent of the expected increase).  6% expect a decrease. 

New System of Law Firm Rankings

Two commercial enterprises, U.S. News and Best Lawyers, have released a set of rankings of over 8,000 law firms.   Rather than assigning a numerical rank to each, they divide specific practice areas of firms into one of 3 tiers.  They actually assign each practice area both a local and a national tier ranking.  81 different practice areas are included in the rankings. 

The publishers claim to have surveyed more than 9,000 clients and just about the same number of attorneys. They also apparently factored in the 3.1 million individual attorney evaluations that the Best Lawyers enterprise compiled.  They also claim to have considered: attorney experience, number of clients, billing ranges, the number of matters, pro bono work, and diversity also counted.

This set of rankings follows the recent release of a similar commercial enterprise called Chambers Associate (published by Chambers and Partners).  These rankings and surveys, along with other more established ones like The Vault Reports Guide to America’s Top 100 Law Firms and the American Lawyer surveys — (see Surveys and Rankings section of the left side bar menu) ought to be viewed with a healthy amount of circumspection. 

In making you aware of this potential new research resource, we are not offering an endorsement of it nor are we intending to vouch for ts methods or conclusions.  We encourage you to examine its particular methodology and think critically about its conclusions — just as you would with any other survey or rankings list. 

One other thing to keep in mind is that the U.S. News/Best Lawyers rankings are designed for clients to determine which firms to hire; it was not designed to inform law graduates about the best places to work.   
We continue to believe that the best resource for deciding the best place for you to work (summer and beyond) is “human intelligence” — talking to one or more CDO attorney-counselors, lawyers who are practicing in the areas in which you want to work, 3Ls or classmates who worked at firms this past summer, etc. 

Berkeley Law students can find other students’ prior summer evaluations (along with their contact information) in the b-Line (click on the “Summer Evaluations” shortcut from the b-Line homepage).  

Networking and Emotional Intelligence More Important Than Ever

There’s some great advice in a recent posting in by Ari Kaplan, a former BIGLAW attorney who wrote a great book on networking (“The Opportunity Maker: Strategies for Inspiring Your Legal Career Through Creative Networking and Business Development.”)

The posting stresses the importance of emotional intelligence (EI) to legal employers.  In a recovering market, they will be focussing on candidates who exhibit flexibility, resiliency, creativity, empathy, self-awareness, self-control, optimism, confidence, self-directedness, and determination despite setbacks.  Persons with high EIQ display good judgment and get along well with others.  (For more on EI, you should check out one or more of Daniel Goleman’s books on the subject.)   

You really should read the Ari Kaplan’s entire post, but here are a couple of key quotes:

“Individuals who demonstrate thoughtfulness about the needs of an organization’s clients, the institution’s goals and the state of the legal industry will distinguish themselves.”

“[W]hen you meet someone, add a follow-up call or e-mail to your electronic calendar. For instance, if during a conversation someone shares an important court date, a key client meeting or a personal event, set a reminder to ask him or her about it in a week, a month or even longer, depending on the appropriate timing. Every interface is an opportunity.” (emphasis added)