The American Lawyer reports that after years of globalization, some firms are pulling back to focus on building a stronger platform in the world’s most lucrative legal market. According to the article, the United States remains the world’s largest, strongest and most lucrative legal market. A recent study by U.K.-based market research company Acritas found that U.S. companies spend 166 percent more on legal services per dollar of revenue than companies around the globe.
The United States’ strength in the global legal market has also drawn attention from across the pond, particularly from London’s top firms. According to the article, Allen & Overy is reportedly in merger talks with O’Melveny & Myers, a potential move that has sent ripples throughout London and signals an increased desire and interest to finally break through in the U.S. legal market. “The U.S. is the largest and most lucrative legal market in the world, so it makes sense that firms with global ambitions would want to be here,” notes Dave Koschik, a member of White & Case’s executive committee and head of its U.S. growth team, (as quoted in The American Lawyer).
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The gap in gender parity in the legal industry remains somewhat stagnant, but there are Big Law firms that have adopted new cultures and strategies to attract and retain women lawyers. The National Law Journal highlights those firms in their annual survey of the top 100 firms with the highest number of women attorneys. The rankings were based on survey responses from 254 of the 350 largest U.S. law firms.
New York-based Fragomen, Del Rey, Bernsen & Loewry is the leading firm for women again, a repeating factor since 2011. With 62 percent of its attorneys being women, and 48 percent of partners, Fragomen has been a frontrunner in retaining women attorneys for years. Partner, Cynthia Lange, who joined the firm in 1986, tells the American Lawyer, “It starts from the top. Even 30 years ago, they were fabulous at recognizing women.” Behind Fragomen, the top 5 on the list are: Minneapolis-based Foley & Mansfield; Ford & Harrison; Constangy, Brooks, Smith & Prophete of Atlanta; and Best Best & Krieger of Riverside, California.
Employment firm Jackson Lewis, at No. 8, has promoted a number of part-time attorneys to partners, says Stephanie Adler-Paindiris, co-leader of the firms’ class actions and complex litigation practice group. Adler-Paindiris explains, “There’s an understanding from above about the importance of family and people’s lives.”
Paul, Weiss, Rifkind, Wharton & Garrison deputy chair, Valeria Radwaner, explains her firm’s outlook, “We have to give women visibility in the community, encourage them to take leadership positions and run practice groups. We encourage them to say, ‘Yes.’ That’s how they become leaders.” Paul Weiss at No. 31 is the highest ranked Big Law firm in New York that made the list, with 40 percent of its attorneys being women and 22 percent of partners. The firm has created programs designed to motivate women attorneys and develop their careers. Radwaner notes that programs alone don’t create meaningful change. She says, “At the end of the day, the program mixed with the tone from the top is really what I think makes the difference.”
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The National Law Journal released the 2016 Intellectual Property Hot List: a special report recognizing 15 law firms that performed exceptionally well in intellectual property. In no particular ranking, each of the 15 firms stood out for handling remarkable IP cases in 2015. Ranging in size, from Biglaw to small, IP boutiques, some firms lead victorious cases that impacted major industries.
Jenner & Block gained recognition for saving rapper, Jay-Z, who faced a copyright infringement battle for using a sample of an Egyptian composer’s song in one of his own in 2000. Andrew Bart, partner at Jenner, argued and won the case on the first day of trial. The Chicago-based firm also claimed big wins on the patent side for their clients: Hospira Inc., Dow Chemical Co., and Nissan North American Inc. Attorneys at Jenner are now working on new litigation cases over the innovative technology associated with gene editing.
According to the NLJ report, California-based Cooley faced a $500 million patent infringement case representing Qualcomm Technologies Inc. against ParkerVision Inc. involving converting electromagnetic signs from high to low frequency. Timothy Teter, a younger generation partner at Cooley, argued the case, resulting in the three-judge panel reversing the original verdict.
Biglaw Kirkland & Ellis made the IP Hot List, in large part, due to their extraordinary patent litigation team. Kirkland partners, Dale Cendali and Daniel Bond, handled a copyright case for Nike Inc. in 2015. Photographer Jacobus Rentmeester accused the Nike brand of copying a 1984 photo he took for Life magazine of Michael Jorden to use for its famous “Jumpman” logo—a $2 billion brand. New York partner Greg Arovas told NLJ, “There’s really substantial trial work done by some of the less senior people in the department.”
Los Angeles-based Sheppard Mullin, a firm less than half the size of Kirkland, won a unanimous case against the U.S. Supreme Court. Incredibly, the case in point, Hana Financial v. Hana Bank, was one that had not been brought to the high court in almost 100 years. Sheppard also gained a notable win in its six-year litigation fight in Intellect Wireless v. HTC, ultimately resulting in the court awarding HTC Corp. $4.1 million. According to the National Law Journal, the firm’s IP practice has grown three times in size since 2006.
Among the other dominating Intellectual Property firms that made the 2016 IP Hot List were: Covington & Burling, Debevoise & Plimpton, Fish & Richardson, Gibson, Dunn & Crutcher, Goodwin Procter, Irell & Manella, Kilpatrick Townsend & Stockton, Morrison & Foerster, Orrick, Herrington & Sutcliffe, Sterne, Kessler, Goldstein & Fox, and Wilmer Cutler Pickering Hale and Dorr.
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Law.com reported that only 34% of lawyers in large firms today are women. That statistic has faced less than a 1% increase over the last five years, according to ALM’s Female Scorecard. Senior ALM Analyst, Nicholas Bruch, reported that only 18% of equity partners and a shocking 8% of lawyers making over half-a-million dollars are women. In a goal to meet gender parity, large firms are making slow progress–but not all hope is lost.
Despite the slow moving figures, there is supporting data implying that Big Law will reach the goal of gender parity, eventually. According to Law.com, ALM reported recent figures that women account for 47% of law school graduates. This figure is generally in line with the climbing 45% of entry-level associates at large firms that are women. The increasing numbers prove that Big Law’s strategies to hire more women are effective at this phase. Attacking the issue at entry-level is key for large firms to fix the problem from occurring further down the road.
ALM conducted a Women in Leadership Survey which revealed that one in four members on key governing committees are women. This indicates that firm leaders are making a noticeable effort to place female partners in top leadership roles. The 18% of females in equity roles to choose from seems to be what is slowing down efforts.
Firms are making significant efforts to hire females at the entry-level and at the most senior level, but the focus should be to retain women in Big Law and transition female associates into partners. Firms should target two critical pieces: supporting female career progression and developing a plan to gather data on why females are leaving the firm or the industry. According to ALM Intelligence, women don’t necessarily leave the legal industry at a specific milestone in their lives or careers. So, the assumption that women are leaving the law after having a child or during key partner promotion years is largely false. Data reveals that women are leaving the law at a slow and consistent rate–an indicator that law firms must creatively solve the issue of female retention.
Law.com suggests that a single, clear and obvious solution is not likely to be found. Leaders in large firms should take a broader approach and focus on developing an assortment of strategies to retain and promote female lawyers. Some firms have started implementing mentorship and coaching programs to target women in crucial transition years. Even though the results of such programs have yet to surface, the efforts to retain females in Big Law are undeniably progressing.
For more information, contact Bill Sugarman.
Law360 recently released their annual Glass Ceiling report, ranking ten firms above their peers based on the percentage of women in their ranks. Milwaukee-based Quarles & Brady outpaced the other 300 U.S. firms to win the number one spot. Quarles is also the only firm on the list to have a female chair. Akerman came in eighth, and law firm giant Baker & McKenzie took home the bronze.
Quarles & Brady chairwoman Kim Johnson attributed a variety of equality practices to the win, including an “equal opportunity” approach to promotions, which ensures that a minority is considered for every open position, and simply “making female attorney support and retention a priority,” (as quoted in Law360).
Schiff Hardin laid off seven current associates and retracted offers for four incoming associates yesterday, reports the ABA Journal. This comes after the widely publicized mass exodus of 22 partners in January, which included Schiff’s former managing partner.
Schiff isn’t the only big law firm that’s conducted massive layoffs this year. Reed Smith and Baker Donelson have also cut large numbers of attorneys and support staff in the recent months. In January, Reed Smith, the 19th highest-grossing law firm in the U.S. last year, laid off 45 attorneys and an unspecified number of staff, announced the Wall Street Journal.
Schiff Hardin managing partner Marci Eisenstein said in her statement that, despite the layoffs, the firm is “coming off a record year,” and are anticipating “another strong year in 2016,” (as reported by Above the Law).
Partner moves were at their highest count yet in 2015, the “strongest year since 2009 for lateral partner moves at big law firms,” according to The American Lawyer. ALM’s Legal Intelligence branch (ALI) tracked lateral partner moves at Am Law 200 firms and found an astounding 43.5 percent increase since 2010, as well as a 5.6 percent increase from 2014.
‘Lateral lift-outs,’ the co-departure of a group of attorneys from a firm, have also been increasingly popular. Gretta Rusanow of Citi Bank’s Law Firm Group notes that a firm “may look to bring on a group of partners, believing that it increases the likelihood of the laterals’ clients moving to a new firm,” (as quoted in The American Lawyer).
Nearly thirty percent (28.1) of the lateral partner hires were litigators, followed by corporate, banking and finance, and intellectual property attorneys (The American Lawyer). Chicago, along with New York, D.C., Boston, and Los Angeles showed active lateral partner activity, according to the report.
Intellectual property boutique Brinks, Gilson, & Leone lost four litigation partners to Midwest-based Barnes & Thornburg last week, according to The American Lawyer. This follows the recent trend for IP boutiques, many of which have either been absorbed by larger firms or have also had an unusually large number of partners depart.
John Gabrielides, one of the four partners that moved to Barnes, explained that they felt “limited in the services we could offer to our clients” at Brinks Gilson, and that joining a full-service firm “gives us a lot more flexibility and latitude” (as reported by The American Lawyer).
The world’s largest law firms are still feeling the heat from their stagnated approaches, as discussed in last week’s post. A report released by CounselLink concluded that firms with 201 to 500 attorneys–termed “large enough” firms–are “increasingly winning the market share at the expense of the largest U.S. law firms.”
CounselLink Strategic Consulting Director Kris Satkunas suggests that the success of these ‘large enough’ firms is generally due to lower billing rates (for similar levels of service) and the increased willingness to engage in AFAs, the ‘Alternative Fee Arrangements’ widely preferred by clients today. She reports that as a result, corporate clients are “finding the same value from this size law firm for less or at least more predictable costs–and that is driving the migration of legal work into this segment of the law firm market.”
This trend is exemplified in the recent layoffs by megafirm Reed Smith, a 1750+ attorney firm who laid off 45 lawyers and a “comparable” number of administrative staff in January 2016, according to their press statement. Sandy Thomas, the global managing partner at Reed Smith who gave the statement, blamed the layoffs on the “fundamental shift in the nature of the demand for, and the delivery of, legal services in recent years.”
Another ‘big law’ firm, global giant Dentons, (now, with a 6,600 employee headcount, the largest law firm in the world), has been the subject of skepticism for its continued ‘bigger is better’ growth philosophy. Jordan Furlong of global law firm consultancy Law21 argues that since there are already many multinational firms, “having dozens of offices and thousands of lawyers isn’t enough to set you apart, and I’m not sure if 80 offices and 8,000 lawyers will do it either” (as quoted in The American Lawyer).
Time will tell if “bigger really is better” for today’s law firms, but for now, all signs seem to point to an ideal amalgamation of factors for middle market firms to flourish.