Law Firms & Practice Management
Challenges in the US and UK Lateral Partner Markets Analyzed
The American Lawyer and The Lawyer
This year's American Lawyer’s Lateral Report found that 2010 was the most static year in the last decade for lateral partner moves. Firms with the highest turnover included DLA Piper (which aimed to hire partners with “established global practices”) and K&L Gates (which experienced 53 exits and 42 new hires). The practice areas with the most lateral moves included litigation, financial regulation, labor and employment, and intellectual property. According to the American Lawyer, last year’s reduced mobility may have resulted from the “continued economic uncertainty” and “merger mania,” among other factors, with most experts expecting partner mobility to increase in 2011.
Meanwhile, Britain’s The Lawyer analyzed the lateral partner hiring market in London, noting that “hiring laterals is risky business” and “the statistics tell us quite how badly US firms have got it wrong.” The Lawyer cites “astonishing” figures from a study revealing that within three years of joining their new firms, one-third of partners hired laterally had already left. The bottom line according to the study’s author: “in many cases hiring partners laterally simply does not work; and US firms are worse at it in London than their UK counterparts.” K&L Gates Chairman Peter Kalis attributes this “unacceptable” performance by US firms in London to “cultural insensitivity, naïveté and hubris.”
Pay Gap Widening Between “Star” Attorneys and their Peers
Wall Street Journal
The pay gap between “star” attorneys and their peers is growing. The Wall Street Journal reports that more firms are abandoning “pay equity” and rewarding star attorneys with higher salaries across a wider spectrum. The income of star partners can now be over 10 times higher than other firm partners—roughly double the usual compensation spread of a decade ago. “Clients generally care more about which lawyer, and not which firm will be handling their affairs,” according to the Journal.
“Better-Faster-Cheaper-Ethic” Leading to Lawyer “Burnout,” New York State Bar Warns
A report by the New York State Bar Association warns that the “better-faster-cheaper ethic” demanded by some clients and adopted by many law firms has led to attorney “burnout,” and actually increased firms’ economic burdens. Among other findings and recommendations, the report also advised that work-life balance should be treated as a gender neutral issue, and that the bar should create model policies for flexible working arrangements.
Harvard Law School to Train Milbank Associates
Harvard Law School Office of Communications
Harvard Law School and Milbank have launched an innovative training program for Milbank associates. Harvard Law School will provide professional development training for Milbank associates at the end of their third year and continuing through their seventh year at the firm. The training will be conducted through Harvard Law School’s Executive Education Program on-site in Cambridge. According to Dean Martha Minow: “This collaboration will represent an important part of Harvard Law School’s continuing emphasis on strengthening the ties between theory and practice, as well as business and law, connecting our teaching with the fresh experiences of the legal practitioners who will come here to learn but also to share knowledge.” Minow also emphasized that the program will benefit Harvard faculty and students because the school “will be able to incorporate the latest real-world perspectives" into what is taught.
The American Lawyer and New York Bar Journal Report "Slippage of Hard-Won Diversity Gains"
New York Law Journal and American Lawyer
Based on a survey of 88 firms, the New York City Bar reports an overall decline in the percentage of women and minorities among its ranks, with minorities representing 16.6 percent of total attorneys in 2010 (down from 18.1 in 2009) and women representing 35.3 percent (down from 36). The survey also revealed that the percentage of minority partners shrunk from 6.6 in 2009 to 6.3 percent in 2010. Until last year the percentages of women and minorities had been steadily increasing since 2004.
Similarly, the American Lawyer surveyed 191 firms nationwide and found a 16 percent overall decline in African Americans among their non-partner attorney ranks. Twenty-three firms saw their African American associate ranks fall by more than 40 percent from 2008 to 2009, with the largest absolute drop at Sidley & Austin, wthe firm here Barack and Michelle Obama met as associates.
Law Firms’ Gay-Friendly Ratings Improving in the UK
The Workplace Equality Index, compiled by the gay rights charity Stonewall, ranks the top 100 gay-friendly employers in the UK. Over the past year the number of law firms on the list rose from four to seven, with Simmons & Simmons scoring highest among all law firms for the second year in a row. Stonewall also reported an increase in the number of law firms submitting applications for evaluation.
Harvard Law Review Elects First Openly Gay President
Mitchell Reich, a second year law student, has been elected as the 125th president of the Harvard Law Review. Reich is the Review’s first openly gay president. While he recognizes the significance of his election, Reich believes that his orientation is “a non-issue” for the organization. According to the Crimson, he intends to focus on expanding the Review’s web edition and to be “more conscientious” about limiting the length of published articles.
Attorney Regulation & Ethics
European Bar Associations Remain Mandatory
The European Commission recently requested that member states remove various restrictions on professional services, including the requirement that an attorney must be a member of a bar association. European Commission Vice President Viviana Reding, however, subsequently intervened to change the request. The modified directive requires member states to remove “unjustified restrictions on professional services such as quotas and closed shops.” According to The Lawyer, the majority of European states require lawyers to be members of bar associations, with some of these associations also serving as lawyers’ regulatory bodies.
Online Social Media Present Ethical Challenges for Attorneys
Over half of all lawyers in private practice have some sort of presence in an online social network like Facebook, LinkedIn, LawLink or Legal OnRamp, according to the ABA's recent Legal Technology Survey Report. Many of these attorneys, however, have encountered ethical issues—and even bar discipline—as a result of their online activity. The ABA Journal’s Steven Seidenberg notes that “the reason so many attorneys are running into ethics problems is that they simply don't know what they can and can't do in the realms of social media,” in part because “there's much ambiguity on how the ethics rules apply to these new technologies.”
US Judge Bars Lawyer From Using “JD” after His Name
National Law Journal
Columbia Law School graduate Bruce Andrew Brown was disbarred in 1992 and subsequently convicted of 44 felonies related to the unauthorized practice of law. Upon his conviction Brown was prohibited from using the titles “Esq.,” “Esquire,” “J.D.” or “Juris Doctor” after his name. Brown asked the court to reconsider, arguing that the prohibition against using “J.D.” after his name violated his First Amendment and due process rights. Acknowledging that other lawyers have been allowed to continue using the designation of “J.D.” after disbarment, US District Judge Patricia Gauhan ruled that Brown’s case was distinguishable because "[h]e has used the term to [convince] others, including a federal judge and city prosecutor, that he was an attorney."
How to Strengthen Relationships with Outside Counsel
Inside Counsel outlines “10 Tips to Strengthen Relationships with Outside Counsel,” including making your objectives clear, stating budget expectations, building trust, forming true partnerships, being frank, and holding “post-game conferences,” among others. Harvard PLP Executive Director Erik Ramanathan is quoted in the article as noting that most corporate law departments have “a stable network of preferred providers” and “we should all be embracing the long-term durability of a law firm relationship and then focusing on strengthening it.”
DLA Piper to Merge with Australia’s Phillips Fox, Creating the World’s Largest Law Firm
DLA Piper’s expected merger with Australia’s Phillips Fox will create the world’s largest law firm with 4,000 attorneys. DLA Piper formed an exclusive alliance with Sydney-based Phillips Fox in 2006, and their formal integration will enable both firms to better compete for business in the Asia-Pacific market. The merger is part of DLA’s strategy to expand in the “Group of 20 countries,” according to firm Chairman Frank Burch.
IP Lawyers See Growth in Asian Outbound Work
Asia Legal Business News
Hong Kong, China, Japan and Korea are becoming the world’s top patent filers, surpassing previous top filers, including the United States. Chinese filings for trademark protection, for example, increased by 20 percent last year, while US filings fell by over 10 percent, according to the World Intellectual Property Organization. Asia Legal Business attributes these trends not only to economic developments over the past year, but also to Asia’s improved intellectual property protections and increased research and development activity.
Innovation and New Models
2011: The Year of the “Free Agent Lawyer”?
While 2010 might be characterized as the year of law firm outsourcing, 2011 may be the the year of the free-agent lawyer, with “the shift of lawyer work away from full time associates and towards independent, unaffiliated, networked and mobile practitioners,” according to legal blogger Jordan Furlong. Furlong notes that while this may temporarily cause insecurity and lower pay for new lawyers, "free agent lawyers" will ultimately enjoy greater career flexibility and improved quality of life.
New Venture Trailblazing “Radical Plans” to Take Over In-House Legal Functions
According to The Lawyer, The new technology boutique law firm, Radiant.law, “is considering radical plans that would see its associated business take over an-house legal function.” Radiant.law prefers fixed fees over hourly rates, utilizes offshoring via outsourcing provider Pangea3, and favors staffing with only senior lawyers. The firm claims that it is the first firm to truly embrace scholar Richard Susskind’s vision of the legal market’s future as detailed in his book, The End of Lawyers? Skeptics, however, variously claim that the business model is not revolutionary and may be unsustainable in the long term.
British Law Firm Vows to Eliminate Associate “Drudge Work”
The Lawyer reports that the British law firm Addleshaws Goddard “is rolling out a firmwide process of unbundling its chargeable work in a bid to free associates from routine assignments and develop their relationship-building skills.” Addleshaws will send “commoditized work” to a “transaction services center” in Manchester, England, which has been operating as a pilot project since November 2010. While other firms have engaged in similar initiatives, Addleshaws is apparently one of the first “to explicitly link disaggregation of legal work to the training and development of its lawyers.”
Is the Love Affair Between Applicants and Law School Waning?
New York Times
Law school applications have fallen 12.5 percent in the past year, according to the New York Times. In addition, the number of people taking the LSAT has also fallen, with nearly 17 percent fewer takers in the December 2010 administration of the exam. The Times’ Catherine Rampell attributes these trends to the uptick in the economy and the fact that “law school in particular isn’t the guaranteed money-maker it once was.”
Law Firms Pressuring Law Schools to Increase Skills Training
The National Jurist
The National Jurist reports that large law firms are increasingly pressuring law schools “to shift their focus from intensive research to more hands-on training,” in part because “clients are no longer willing to pay for firms to train new associates.” The issue was discussed at the recent annual meeting of the Association of American Law Schools, where Gary Roberts, Dean of the Indiana University School of Law, explained “we all know we need [to provide] more skills training, but we need to find ways to change the culture so we can get there.”
New Hampshire Law School Collaborating with Chinese Law School
The University of New Hampshire School of Law has entered into an agreement with the Koguan Law School at the Shanghai Jiao Tong University in Shanghai, China. The law schools will exchange students, collaborate on research, and explore the possibility of dual-degree programs. UNH Law Dean John Hutson claimed the agreement “will provide our students a rare opportunity to explore the law from different perspectives.” UNH is not the first US law school to enter into such an arrangement: Vermont Law School and the Universities of Indiana, Michigan, and Wisconsin have launched joint initiatives with various schools in India and China.
Editor: Cory Way
Managing Editor: Nicola Seaholm
Contributing Editors: Amanda Barry, Hakim Lakhdar, Mihaela Papa, Erik Ramanathan
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