How much weight is "firm's health" when choosing?

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How much weight is "firm's health" when choosing?

Postby Anonymous User » Fri Sep 23, 2011 4:58 pm

who important is it? I'm mainly looking at V50s, but some of the firms i have offers from are in poor health, whereas one of them is in constant increase (higher profits). how much weight should i give this in deciding?

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Re: How much weight is "firm's health" when choosing?

Postby Anonymous User » Fri Sep 23, 2011 5:09 pm

I'd put a LOT of weight into the "firm's health" because you want to go to a law firm where you'll have the time to get up to speed (3-4 years) and have some viable skills. You don't want to be in a situation where (1) you're no-offered or (2) you're laid off in your first couple years because of the firm's poor financial health. Although many people ascribe personal characteristics to firms (e.g. "nice", "cutthroat"), it's often economics that drives the actions of the firms.

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Re: How much weight is "firm's health" when choosing?

Postby Renzo » Fri Sep 23, 2011 5:11 pm

I'm not sure where you're getting this info, or how you're defining "in poor health." I can only think of one V50 firm I would really count in that category.

So I guess I would say that if "in poor health" means to you what it means to me--that is, that the firm is unlikely to continue to have sufficient revenues to meet expenses--then it should be 100% of your consideration because the firm is likely not to exist when you graduate, or at least not have room for another junior associate.

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Re: How much weight is "firm's health" when choosing?

Postby Anonymous User » Fri Sep 23, 2011 6:27 pm

Renzo wrote:I'm not sure where you're getting this info, or how you're defining "in poor health." I can only think of one V50 firm I would really count in that category.

So I guess I would say that if "in poor health" means to you what it means to me--that is, that the firm is unlikely to continue to have sufficient revenues to meet expenses--then it should be 100% of your consideration because the firm is likely not to exist when you graduate, or at least not have room for another junior associate.

is white&case one of them?
this is one of the firms i was thinking about btw. I've heard that this firm is taking a beating.

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MrKappus
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Re: How much weight is "firm's health" when choosing?

Postby MrKappus » Fri Sep 23, 2011 6:29 pm

You're only familiar with a firm's health if you're a partner at that firm. HTH.

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Re: How much weight is "firm's health" when choosing?

Postby MrAnon » Fri Sep 23, 2011 6:31 pm

It impossible for you as a law student to make an accurate assessment of firm health. A firm that was in terrible shape last year may be in great shape after pruning associates. A firm that so badly wanted to keep its pride by not laying off anybody may be in terrible shape now and needing to lay off a bunch of associates. No one at the firm is going to tell you honestly that the firm is in trouble. Profits per partner are numbers made up by the firms and are in some cases bogus- there was a wall street journal article about this. I'd look past this and go where you are comfortable.

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Re: How much weight is "firm's health" when choosing?

Postby okinawa » Fri Sep 23, 2011 8:28 pm

.
Last edited by okinawa on Fri Apr 19, 2013 10:37 am, edited 1 time in total.

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Re: How much weight is "firm's health" when choosing?

Postby Renzo » Fri Sep 23, 2011 9:35 pm

Anonymous User wrote:
Renzo wrote:I'm not sure where you're getting this info, or how you're defining "in poor health." I can only think of one V50 firm I would really count in that category.

So I guess I would say that if "in poor health" means to you what it means to me--that is, that the firm is unlikely to continue to have sufficient revenues to meet expenses--then it should be 100% of your consideration because the firm is likely not to exist when you graduate, or at least not have room for another junior associate.

is white&case one of them?
this is one of the firms i was thinking about btw. I've heard that this firm is taking a beating.


White & Case did take a beating in the 2007/08 recession, but that will have been like 8 years ago when you start at a firm, so it's really not relevant to how the firm is doing. They might have broadly diversified practice areas, gained/lost clients or partners, reduced their headcount, had huge cases come in, etc.

As others have mentioned, it's basically impossible to get a feel for the health of a firm. About the best you can do is watch the industry news sources for clues. For example, if a ton of partners have left a firm, especially if there have been repeated waves of defections or defections from multiple practice groups, it's a sign that things are not well. But this isn't perfect; partners leave healthy firms too. So even the loss of a huge rainmaker might actually not hurt a firm much.

Revenue per lawyer is also a helpful, but far from conclusive metric. If it's high, you have a good clue that there is enough work to keep the associates busy and the partners from leaving. As others have mentioned, profits (per partner or otherwise) are a made up statistic at most firms; they're only useful is in "who's dick is bigger" contests among elite law firm partners.

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Re: How much weight is "firm's health" when choosing?

Postby Grizz » Fri Sep 23, 2011 10:25 pm

Really hard to figure out. In my smaller home market, the community is very small and good 'ol boy, and attys. know which firms are doing well and which ones are doing terribly. But this isn't stuff you can learn from PPP stats, and you always have to take what people say with a grain of salt. Not even sure how one would begin to figure out this stuff in NYC.

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Re: How much weight is "firm's health" when choosing?

Postby somewhatwayward » Sat Sep 24, 2011 8:56 am

Renzo wrote:I'm not sure where you're getting this info, or how you're defining "in poor health." I can only think of one V50 firm I would really count in that category.


which firm?

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Re: How much weight is "firm's health" when choosing?

Postby Anonymous User » Sat Sep 24, 2011 9:32 am


Renzo
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Re: How much weight is "firm's health" when choosing?

Postby Renzo » Sat Sep 24, 2011 9:47 am

Anonymous User wrote:Orrick?


Yep.

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Old Gregg
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Re: How much weight is "firm's health" when choosing?

Postby Old Gregg » Sat Sep 24, 2011 9:54 am

I think law students should place a lot of weight on this metric, and it's not hard to tell which firms are stable and which aren't. Just look at PPP/RPL/Revenue numbers over their years. For example, I'd stay away firms that haven't had decent, genuine PPP growth over the past few years (coupled with revenue growth, so the PPP growth isn't necessarily due to cost-cutting). RPL is probably one of the best indicators of firm health, as it's incredibly difficult for firms to manipulate it.


So yes, while these numbers in themselves are not that useful, comparing them year over year is. Are summer class sizes increasing? Did they increase last year? That probably shows that the firm is in growth mode. What has headcount been over the past few years? Did the firm pay spring bonuses (I think greater than 50% of AmLaw 100 firms failed to pay the spring bonus this year)? Have there been significant partner defections? What are salaries like? Are they still frozen? Were they ever frozen?

Firms that give me the chills, and that should give you the chills too:
Shearman & Sterling
White & Case
Orrick
OMM
Mayer Brown
Nixon Peabody

There are others. Just woke up. But that should give you some idea. There is a whole lot of other firms that are just stagnating, so not the best places to be, even though your job might not me as risky at those places. For me, Skadden and Weil fall in that group, along with many others.

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Re: How much weight is "firm's health" when choosing?

Postby Renzo » Sat Sep 24, 2011 10:20 am

Fresh Prince wrote: There is a whole lot of other firms that are just stagnating, so not the best places to be, even though your job might not me as risky at those places. For me, Skadden and Weil fall in that group, along with many others.


This makes exactly as much sense as telling people not to go to Yale or Harvard, since they have stagnated and aren't moving up the USNWR rankings.

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Re: How much weight is "firm's health" when choosing?

Postby Old Gregg » Sat Sep 24, 2011 10:31 am

Renzo wrote:
Fresh Prince wrote: There is a whole lot of other firms that are just stagnating, so not the best places to be, even though your job might not me as risky at those places. For me, Skadden and Weil fall in that group, along with many others.


This makes exactly as much sense as telling people not to go to Yale or Harvard, since they have stagnated and aren't moving up the USNWR rankings.


It's not really about "moving up" or "moving down" rankings or prestige. Yes, they're prestigious, but not exactly the best places to be in this economy.

And the "Yale" and "Harvard" in your analogy would be Wachtell and Cravath, respectively. Just trying to add some logic to an otherwise terrible argument.

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Re: How much weight is "firm's health" when choosing?

Postby Renzo » Sat Sep 24, 2011 10:42 am

Fresh Prince wrote:
Renzo wrote:
Fresh Prince wrote: There is a whole lot of other firms that are just stagnating, so not the best places to be, even though your job might not me as risky at those places. For me, Skadden and Weil fall in that group, along with many others.


This makes exactly as much sense as telling people not to go to Yale or Harvard, since they have stagnated and aren't moving up the USNWR rankings.


It's not really about "moving up" or "moving down" rankings or prestige. Yes, they're prestigious, but not exactly the best places to be in this economy.

And the "Yale" and "Harvard" in your analogy would be Wachtell and Cravath, respectively. Just trying to add some logic to an otherwise terrible argument.


Oh. I'm sorry. Forgive me for my terrible analogy, I certainly should have said "Stanford and NYU"--that would make all the difference.

You are absolutely right: it makes perfect logical sense that you would advise people to avoid two of the best established, most consistently profitable and well-renown law firms that have ever existed, since they have stagnated at the very pinnacle of the profession. Personally I would definitely choose a globally expanding firm like DLA Piper over those TTTs in decline.

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Re: How much weight is "firm's health" when choosing?

Postby Old Gregg » Sat Sep 24, 2011 10:56 am

Renzo wrote:
Fresh Prince wrote:
Renzo wrote:
Fresh Prince wrote: There is a whole lot of other firms that are just stagnating, so not the best places to be, even though your job might not me as risky at those places. For me, Skadden and Weil fall in that group, along with many others.


This makes exactly as much sense as telling people not to go to Yale or Harvard, since they have stagnated and aren't moving up the USNWR rankings.


It's not really about "moving up" or "moving down" rankings or prestige. Yes, they're prestigious, but not exactly the best places to be in this economy.

And the "Yale" and "Harvard" in your analogy would be Wachtell and Cravath, respectively. Just trying to add some logic to an otherwise terrible argument.


Oh. I'm sorry. Forgive me for my terrible analogy, I certainly should have said "Stanford and NYU"--that would make all the difference.

You are absolutely right: it makes perfect logical sense that you would advise people to avoid two of the best established, most consistently profitable and well-renown law firms that have ever existed, since they have stagnated at the very pinnacle of the profession. Personally I would definitely choose a globally expanding firm like DLA Piper over those TTTs in decline.


When you decide to talk like an adult, respond again and we'll have a solid chat.

P.S. With such a terrible analogy, you needed all the help you could get.

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Re: How much weight is "firm's health" when choosing?

Postby mrloblaw » Sat Sep 24, 2011 1:00 pm

It takes two points to answer OP's question:

1. Firm health would be one of the absolute most important metrics for deciding between firms . . .
2. But nobody who's posting here has a bloody chance a evaluating a firm's health with any accuracy.

Conclusion: it probably shouldn't be a major factor in consideration.

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Re: How much weight is "firm's health" when choosing?

Postby Anonymous User » Sat Sep 24, 2011 3:52 pm

Fresh Prince wrote:I think law students should place a lot of weight on this metric, and it's not hard to tell which firms are stable and which aren't. Just look at PPP/RPL/Revenue numbers over their years. For example, I'd stay away firms that haven't had decent, genuine PPP growth over the past few years (coupled with revenue growth, so the PPP growth isn't necessarily due to cost-cutting). RPL is probably one of the best indicators of firm health, as it's incredibly difficult for firms to manipulate it.


So yes, while these numbers in themselves are not that useful, comparing them year over year is. Are summer class sizes increasing? Did they increase last year? That probably shows that the firm is in growth mode. What has headcount been over the past few years? Did the firm pay spring bonuses (I think greater than 50% of AmLaw 100 firms failed to pay the spring bonus this year)? Have there been significant partner defections? What are salaries like? Are they still frozen? Were they ever frozen?

Firms that give me the chills, and that should give you the chills too:
Shearman & Sterling
White & Case
Orrick
OMM
Mayer Brown
Nixon Peabody

There are others. Just woke up. But that should give you some idea. There is a whole lot of other firms that are just stagnating, so not the best places to be, even though your job might not me as risky at those places. For me, Skadden and Weil fall in that group, along with many others.


While I don't agree w/ the Weil and Skadden comments, I think the first 4 on this list are widely known as places to avoid if you are lucky enough to have other options. Being in Chicago, I've also heard lots of shots taken at Mayer though I'm not convinced they aren't "healthy." I do think partners there are less happy than they used to be. I know nothing about NP.

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Re: How much weight is "firm's health" when choosing?

Postby Anonymous User » Sat Sep 24, 2011 10:47 pm

I'm considering Latham. Is it in the 'worry' category for this metric?

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Re: How much weight is "firm's health" when choosing?

Postby pasteurizedmilk » Sat Sep 24, 2011 11:02 pm

I think it's easier to find indicators of health than lack thereof. e.g. if a firm is picking up partner's from other firms or just landed a few high-profile clients, chances are it's doing well.

but it's still something of a crapshoot trying to figure it out from the outside.

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Re: How much weight is "firm's health" when choosing?

Postby Old Gregg » Sat Sep 24, 2011 11:30 pm

Weil Class of 2011 associates are starting in January 2011, and were given a measly $10,000 salary advance to tide them over until then. Even Harvard is starting their fall class on time... wait SHIT WHY IS THIS ANALOGY FAILING? I THOUGHT WEIL WAS LIKE HARVARD LAW SCHOOL!

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Re: How much weight is "firm's health" when choosing?

Postby Renzo » Sun Sep 25, 2011 12:11 pm

Fresh Prince wrote:Weil Class of 2011 associates are starting in January 2011, and were given a measly $10,000 salary advance to tide them over until then. Even Harvard is starting their fall class on time... wait SHIT WHY IS THIS ANALOGY FAILING? I THOUGHT WEIL WAS LIKE HARVARD LAW SCHOOL!


Setting your brain damage aside for a second, you make a good point. This is actually a good reason to avoid Weil--but it isn't necessarily an indication of the firm's health one way or another. One great way to keep a firm "healthy" (again, using that term to mean revenues are adequate to meet expenses and retain partners) is to keep your expenses down,and one great way to do that is by not brining in employees you can't keep busy. Deferring the incoming class is bad for the incoming class, but likely very good for firms profit margins. Whether or not it's good business judgement is clearly debatable.

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RMstratosphere
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Re: How much weight is "firm's health" when choosing?

Postby RMstratosphere » Sun Sep 25, 2011 12:40 pm

Can anyone talk more specifically about Mayer Brown and/or Nixon Peabody?

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Re: How much weight is "firm's health" when choosing?

Postby MrKappus » Sun Sep 25, 2011 1:26 pm

RMstratosphere wrote:Can anyone talk more specifically about Mayer Brown and/or Nixon Peabody?


Absolutely. The partners or CFOs at either firm could give you a detailed breakdown of their firms' fiscal health.




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