Mergers the Way to the Top of Revenue Growth Charts

According to the recent AmLaw release of their top 100 for 2011, profits per partner (PPP) rose 3% overall to an average of $1.4 million. But as young associate hiring remains low compared to pre-recession levels, where is this growth coming from? Drew Combs’ recent April 26 article “Combo Craze” for The American Lawyer pinpoints law firm mergers as one of the primary reasons.

Says Combs, law firm mergers are “the surest and fastest way to zoom up our gross revenue chart. Sixty firm mergers were announced in 2011, according to the consulting firm Altman Weil, Inc.—a 54 percent increase from 2010 and the highest number since 2008.”

For instance, take the recent rise of Kilpatrick Townsend. In 2011, Atlanta-based Kilpatrick Stockton and San Francisco-based Townsend and Townsend and Crew were in the bottom rung of the AmLaw 200. But as Combs highlights, the combined firm of Kilpatrick Townsend & Stockton, whose merger became effective as of Jan. 1, 2011, vaults its 2011 AmLaw 100 ranking to 78 with $362 million in gross revenue.

Combs goes on to cite other mergers – Edwards Wildman Palmer (ranked 18th this year), Squire Sanders (ranked 35th) and SNR Denton (ranked 37th), all of which saw the combined units shoot up the ranks as compared to their statuses pre-merger. The same will likely be true of next year’s 2012 rankings based on the recent mergers of Bryan Cave with Holme Roberts & Owen, McKenna Long & Aldridge with Luce Forward Hamilton & Scripps, and Faegre & Benson with Baker & Daniels.

While mergers can “mean the end of an era for firms that have rich local identities and histories,” Combs says, “firm leaders contend that their mergers and combinations provide strategic advantages, not just heft.” Such moves can fortify strongholds in key markets, provide a much-needed national or international footprint, and expand firms’ capabilities and practices in smaller or traditionally-weaker areas.

At the same time, many factors play into whether or not mergers are ultimately successful. Accordingly, it is important to note that short-term gain in revenues and rankings do not guarantee long-term stability or success. Nonetheless, it remains a positive and significant indicator, hence why we are seeing such an uptick over the last 3 years as the economy recovers.

Mergers the Way to the Top of Revenue Growth Charts2017-05-18T22:10:45+00:00

7 iPad Apps Lawyers Love

In Greg Hoole’s recent article for the Law Technology News, he highlights the exponential growth and usefulness of iPads and their apps for today’s lawyers. Advances in technology have always helped firms adapt and stay ahead, but Apple’s release of the iPad and many of the innovative apps paired with it have changed the game.

The rise of the iPad and its use among Fortune 100 companies has been meteoric. Says Hoole: “within 90 days after its initial release, the iPad managed to penetrate 50% of Fortune 100 Companies.” Thus in less than 3 months, half of the world’s most successful companies were already hooked. And while the iPad is not the only tablet on the market, it is by far the most popular and trusted. Hoole notes, “80 percent of businesses planning to buy a tablet device this year reported that they intended to buy iPads”.

The benefits for attorneys are manifold, and go beyond helping firms move from endless paper filing to electronic storage. More specifically, Apple’s introduction of enterprise and Business to Business (B2B) apps, has opened up a whole new world of efficiency and productivity. Hoole goes on to note 7 groundbreaking apps that lawyers love:

GoodReader: Electronic document storage app which allows users to trim down considerably the amount of paperwork, document filing, and large binders needed in court, preparations or client consultations. This app helps greatly with organization and cuts down on time needed for administrative and secretarial work. Highlights and annotations made from a desktop computer can easily be transferred, and any new comments are easily recorded.

Rulebook: Lawyers can now take e-versions of rulebooks to court in place of thick binders and briefcases. Rulebook allows lawyers to search entire rulebooks quickly and easily by typing in key words and phrases. The app also allows lawyers to personalize it with their firm logo and jurisdictions. But possibly most helpful of all, Rulebook automatically updates rules whenever they are amended.

JuryTracker: Uses intuitive graphics and graphical input options that allow lawyers to track juror responses to evidence and testimony presented in court. If desired, more detailed notes can be added using the built-in keyboard or an external/wireless keyboard.

Quickoffice Pro: This app allows for the integration of Apple and Microsoft products, such as the suite of MS office products like Word, Excel or PowerPoint.  While the iPad is not ideal for extensive word processing, Quickoffice Pro allows users to share files, edit or create documents in programs they are likely more familiar with. It is also compatible with the cloud, and can be linked to remote applications like Evernote, Dropbox and MobileMe.

Evernote: Note-taking app where notes can be recorded and synced from a tablet, smartphone, desktop computer or internet source. This is very helpful for organization and making to-do lists. Notes can also be recorded vocally or stored with other important documents and emails.

Penultimate: Another note-taking app much like Evernote, but notes can be recorded in the more conventional sense through writing. Instead of writing on a notepad, notes are written onto an electronic surface and thus stored wirelessly. It can also be linked with Evernote.

Newsstand: Allows readers to download electronic subscriptions to journals, magazines, newspapers and more. Upon its release, subscriptions to many major publications like the New York Times increased dramatically. This is especially helpful for bars, review boards and other lawyers associations that want their material more widely accessible.

7 iPad Apps Lawyers Love2017-05-18T22:10:45+00:00

Corporate Counsel’s 2011 GC Compensation Survey

As described in a recent article by Shannon Green, Corporate Counsel announced the results of its General Counsel Compensation Survey for 2011. On the whole, GCs made steady gains in compensation but with a few interesting trends, most of them expected. “General counsel compensation has two legs,” Green notes, “individual performance and the overall success of the corporation.” There is a significant tie to the corporation’s business strategy, and by extension the overall state of the economy. Many public companies had a good year financially last year as shown by the stock market’s surge. Thus, GCs are reaping the benefits.

Stock options continue to fall out of favor, and cash remains the largest part of compensation packages. Often, this comes in the form of nonequity incentive compensation tied to corporate performance goals. In fact, Green noted 93 of the 100 top-paid GCs received such compensation, “while the number receiving discretionary bonuses dipped from 23 to 20.” The survey also confirmed restricted shares remain the most favored way to reward high performers with equity.

Unexpected, however, was this year’s highest paid GC. For the first time since the survey’s inception in 1994, the highest earning GC was a woman. Denise Keane, GC of Altria Group Inc., brought in $6.5 million in total cash compensation. Yet Keane wasn’t the only GC to have a good year. Overall, cash payments increased by 18%, a norm experienced across the board as long as company execs felt GCs did good work. At the extreme upper end of options awarded, Liberty Media Corporation’s Charles Tanabe was awarded $16.5 million, and Apple top lawyer, Bruce Sewell, received stock awards worth $28.4 million.

Another interesting development captured by the survey is the apparent rise of female GCs. Beyond Keane’s success, there were 14 women in this year’s top-100 paid GCs, 1 more than last year. In terms of career advancement, Green mentions female in-house attorneys may actually be faring better than their female counterparts in law firms, with 19% female GCs in Fortune 500 companies as compared to 16% female equity partners in Am Law 200 firms.

Other notable observations include a rise in base pay by 0.5% and an 29% increase in cash bonuses to an average of $1,219,586. Also, among the top 50 highest-paid GCs, cash bonuses and nonequity incentives made up about 2/3 of total compensation. Traditional bonus earners saw a rise of 18%, while the more popular nonequity incentive compensation increased by 28%.

In all, the survey seems to indicate that performance-based compensation will continue in the future, particularly in an uncertain economy. Overall compensation should keep growing, but likely at a slower pace. But with slightly higher base pay, increased cash options and bigger bonuses, GCs are doing just fine.

Corporate Counsel’s 2011 GC Compensation Survey2017-05-18T22:10:45+00:00

Law School Applications Falling, Summer Associate Hiring Remains Low

Deterred by fewer job prospects and rising tuition costs in an industry still very much in flux following the recession of 2008, law schools across the U.S. received significantly fewer applications. Numbers of LSAT test takers are down as well.

According to a recent article by David Diaganella in the New Jersey Law Journal, the Law School Admissions Council (LSAC) “60,693 applicants submitted 440,964 law school applications as of March 30 for the academic year starting this fall.” To put that in perspective, “that’s 15.6 percent fewer applicants and 13.6 percent fewer applications than about the same time last year.”

This continues a downward trend that we saw last year as well. As Diaganella notes: “the LSAC reported 72,045 applicants turning in 510,650 applications for fall 2011 and 78,342 applicants and 561,214 applications submitted for fall 2010.”

The outlook is not much better for current law school students seeking summer clerkships. In Karen Sloan’s recent article, “Summer Associate Hiring Lackluster as New Norm Sets In” for The National Law Journal, today’s law school students face much steeper competition for summer clerkships than they did before the recession. Historic lows in summer associate class sizes and offer rates appear to have plateaued for the time being, and many firms do not see that changing.

Average summer associate classes remained at 8, matching last year’s all-time low, while median class sizes increased slightly from 4 in 2011 to 5 in 2012.

The story is not much better in terms of clerkship job offers. Says Sloan, “Summer associate offer rates ticked up modestly, from 40.6 percent in fall 2010 to 46.4 percent in 2011 for students interviewed by firms. But that figure was dwarfed by the 60 percent offer rate in 2007.” Along similar lines, she notes firms did offer more callback interviews to prospective summer associates last fall, and extended a median of 10 offers in 2012 compared to 9 in 2011. “However, that figure lags significantly behind the pre-recession median of 16 offers.”

This inherently translates into lackluster hiring of young associates for permanent positions as well. Although on the one hand recruiting on law school campuses picked up slightly, Sloan notes that most firms’ 2-year hiring projections are bleak, with little change expected through 2013 and beyond.

Law School Applications Falling, Summer Associate Hiring Remains Low2017-05-18T22:10:45+00:00

Fluctuation in Legal Employment in 1st Quarter

If the first 3 months of 2012 have shown us anything, it’s that employment in the legal sector continues to fluctuate. Statistics from the U.S. Bureau of Labor Statistics show that positive gains of 1,000 jobs in January and 800 in February were followed by a sharp decline of 1,300 in March. Overall, net gain for the year remains positive at 500 jobs gained, but the notable dip in March is reason for pause. The jolt threatens what had the makings of a slight rebound from the second half of 2011, where 1,000 jobs were added between July and December (despite significant month-month fluctuations).

Overall, 3,600 jobs have been added since February of last year. The increases of 1,000 in January and 800 in February were the industry’s largest since July of last year, when 4,100 jobs were added.

In terms of how this fits in with employment numbers in the overall economy, reactions are mixed. On the one hand, unemployment has hit a 3-year low at 8.2%, down from 8.3% in January and February and 8.5% in December. Even so, experts had hoped to see more of an increase in March jobs than they did. 120,000 were added, but it was a sign of slowed growth compared to December, January, and February, which all saw more than 200,000 jobs gained.

The sustained month-to-month fluctuations indicate that many firms are still caught in hiring freezes, particularly of young associates. With continued low summer associate hiring and patterns of decreased law school applications and LSAT takers, all signs point to lateral movements and merger talks as firms’ favored approach for growth as the economy continues to recover.

Fluctuation in Legal Employment in 1st Quarter2017-05-18T22:10:45+00:00