Here's What Law Firm CEOs think About Your Law Job Future

The credit crunch and other issues have occupied the minds of lawyers in recent months, but what does it mean for law firms in terms of the outlook? LegalWeek published an outlook from top firms managing partners. A sampling: Tim Jones, Freshfields - “Litigation is a big practice area right now. There is an increase in regulatory investgations and company investigations. They are busy areas at this stage in a downturn.”

The view generally is that it’s not so much about firm size as flexibility - the ability to fight for a smaller share of the market. Many feel that the corporate market will continue to be slow but real estate in particular has been hit hard and many Magic Circle firms will move into a more mid-market position while also continuing to focus on their far-flung outposts in Asia and the Middle East for increased deal flow and profits.
A holding pattern has emerged with many unable to predict precisely what may occur next. One thing’s for sure - it’s a changed scene and increases in insolvency, restructuring and litigation make those today’s hot practice areas.

Better Law Jobs = Less Money. Huh?

Can it be right? Lawyers looking for less money? Yesterday, around 125 law students from some of the best law schools in America - think Yale, Harvard, Stanford et al - emailed the largest law firms in the country to not only announce their new organization - Law Students Buildings A Better Legal Profession - but to also outline what should be done to build a better environment for lawyers.

What the law students want is law firms to sign a charter for sane work conditions, including:
- Making concrete steps towards a transactional billing system;

- Reducing maximum billable hour expectations for partnership;
- Implementing balanced hours policies that work; and
- Making work expectations clear.

The firm wants students to know which firms have signed on to its principles and intends conducting presentations about the work requirements at the law schools. It also makes it clear that it understands that signing on means less money. Fine by them. If that's the cost, then so be it.

Let's see what happens with this new Bill of Rights For Lawyers.

When Law Firms Die - Take Jenkins & Gilchrist For Instance

There's nothing more touching than the death of a law firm, particularly when you're an employee. So, when Jenkins & Gilchrist - a 600 attorney firm - announced their departure from the land of the legal living they did so with a message to "former clients" and friends:

Effective midnight March 31, 2007, Jenkens & Gilchrist no longer offers legal services.
It is with a profound appreciation for the clients who have allowed us to serve them for more than 50 years as well as members of the business community who have been critical to our success, that we announce the formation of a team charged with the responsibility of successfully managing the wind-down of Jenkens business matters. In the coming days, we will publish information on this website which will assist you if you have business, questions or concerns.
Thank you.
Jenkens & Gilchrist

Still, the partners for the most part are finding alternative employment. Hunton & Williams has added 93 former J&G lawyers to their Texas offices.

Associates At Freshfields Outline 'Best Practices' For Law Firm Work

We're all well aware of the efforts firms are making to improve the lot of Associates - in an effort to avoid attractive entreaties of rival firms. Instance: Freshfields London have hosted their first Associates-only conference and they're now working on developing a 'best practices' group to spread across the firm. This "we're listening to you" attitude will doubtless be followed by the appropriate action by the firm which saw partners and 200 Associates listen to key areas of associate-interest, including career paths, pay, work-life balance, appraisals, training, knowledge management and business development.

Let's watch what happens . . at Freshfields and other large, law employers. It's an Associate-Advantage world out there.

Law Firms Slowing Recognizing Rights Of Gay Employees, It Seems

Gay Rights has become an increasingly significant issue for many law firms who, surprisingly lag behind other areas in the recognition of gay staffers (witness the recent Cravath stoush and the publicity that went with it.) In London, bankers JP Morgan are running a seminar for its panel of lawyers on gay employment issues.

'The Lawyer' reports http://www.thelawyer.com/cgi-bin/item.cgi?id=124732&d=11&h=24&f=46 that its initiative has been spearheaded by assistant general counsel and JPM managing director Tim Hailes and global co-general counsel Diane Genova.

Hailes told The Lawyer: “The firms’ commitment to this agenda will be a relevant factor [in the bank choosing them]. It isn’t the deciding factor, but it will be taken into account as part of our assessment, and not doing it won’t be viewed positively. We want to see change.”

The law, it seems, is moving slowly but surely into the 21st century.

Are Law Partnerships Forever? Of Course Not

The Mayer Brown downsize recently, where the firm reduced its equity partners in order to stay lean, mean and able to attract the talent it needs to grow and compete, is not a problem for Mayer Brown alone. As the National Law Journal reports there are many other firms in a similar position.

Ranked ninth in The National Law Journal's 2006 survey of the nation's 250 largest firms, Mayer Brown, with 427 equity partners, nevertheless languished at 51st in average profits per equity partner, according to The American Lawyer. The firm's average profits per equity partner were $955,000.

Another firm with a big disparity between census and equity partner profits is 375-partner Fulbright & Jaworski, the nation's 24th largest law firm but ranked 75th in partner profits, according to NLJ.

Law firms have limited options in boosting average equity partner profits, besides upping billing rates, improving collection and taking the risk of expanding practice areas. Decreasing the number of equity partners has become a popular tactic.

More firms are removing lower performers from their equity ranks, said law firm consultant Richard Gary. And it is not just a U.S. trend. London's Freshfields Bruckhaus Deringer has shed some 50 equity partners, about 10 percent of its equity ranks, since May 2006.

Law Jobs Disappear In Purge At Mayer Brown

The moves by Mayer, Brown, Rowe & Maw to purge 45 partners demonstrates the new urgency and economics in running a profitable law practice. The purge of almost 10 per cent of the Chicago partners - almost Stalinist in scope - is unprecedented, particularly given the size of MBRW and its status as eighth on the American Lawyer law firm ranking, with partners taking a shade under $1 million each (profits per partner).

The firm's revenues topped $1 billion for the first time ever and they worked hard to minimize any suggestion of crisis. The fact is though, that the firm has lost lawyers to other law firms, particularly in New York, which has impacted revenues and morale alike.

Once again, another confirmation that nothing is forever and Big Law is as vulnerable as the rest of us to the shifting sands of law practice.

Paying Lawyers - The London Lockstep Just Got Harder

Recent reports show that European law firms are changing they way partners are paid - making remuneration more performance-based rather than the 'lockstep' system based on legnth of service. The trend is moving away fast from lockstep with more firms basing profit distribution on performance or, at least, on a combination of the two.

The survey, conducted by BDO Stoy Hayward's professional services practice, shows that the proportion of European firms that maintain a pure lockstep model fell from 42 per cent in 2005 to just 25 per cent this year. Further, the 'halfway house' part-merit, part-lockstep also fell sharply, from 36 per cent in 2005 to just 15 per cent today.

All of which is good news for young lawyers and even better for young lawyers motivated by performance-based remuneration - and show me an ambitious lawyer who isn't. The
continued surge in mergers and acquisitions activity and a sharp increase in the ratio of lawyers to partners boosted average profits at European firms by 15 per cent last year. The need to keep them - and increase their numbers - has made the move from the lockstep model an inevitability.