Which law firms may follow Dewey..and which law firms won't? Forum

[Renzo]

Among the other firms, there are some that people seem to think have better overall business outlooks, and some that haven't been doing great as of late (but aren't having serious problems).

Off the top of my head, some of the ones in the latter category might include Mayer Brown, Morgan Lewis, Cadwalader, Shearman, Fried Frank, Proskauer, Paul Hastings.

You have any sources of information about these, or does "off the top of my head" just mean randomly naming big firms that are lower than V20?

Most of these firms (Mayer Brown, MLB, Cadwalader, Proskauer, maybe others) conducted announced layoffs and/or no-offered (MLB cancelled its 2010 summer program). I'm not going to pull all the links for you, but each of these took worse than normal hits to revenue, RPL, and/or PPP. Some have also had high-profile partner departures (i.e., Dennis Block, who basically was Cadwalader's entire M&A department), and have/had concentrations in sectors that haven't really recovered (e.g., securitization used to be a huge chunk of Cadwalader's business).

Edit: Here's info on layoffs - http://www.americanlawyer.com/PubArticl ... 2425647706 - there are lots of firms listed, but take a look and sheer numbers and multiple rounds for many of the firms listed above.

What firms did in 2008 is of very little relevance to their financial health now. Cadwalader is a perfect example: they are probably in fine financial shape precisely because they didn't hesitate to fire most of the firm when securities work died. Really, from a student's point of view, the only thing the layoff numbers are useful for at this point is holding a grudge against the firms that conducted them.

Your point about departures is a much better thing to watch, and I would advise any student to start digging through the legal industry news sources to see if there are patterns of either departures of high-profile lateral hires at any firm they are considering. The "healthiest" firms will have very few of either. One or two departures might not be a big deal (and can even be positive sign), but if the rats are jumping ship in droves, it can be a sign things aren't going well. Same goes for high-profile lateral hires. If a firm is filling a specific niche, it can be a great sign they have hired a rainmaking lateral. But, at the same time, often the reason 'rainmakers' leave firms is that they are no longer brining in the business they once did, and they don't want to have their draw reduced, so they leave for a firm that will give them a contract, and often that firm ends up overpaying and regretting it( see, e.g. Dewey)

Edit to add: As I look at your list a little closer, I emphatically disagree with some of your examples. Some of those firms seem to be in very good shape, thanks to diverse practice areas and realistic growth models. I would agree that Cadwalader and Proskauer deserve a little scrutiny for the reasons I mentioned above. Cadwalader did a good job diversifying after the crash, but they have had a number of high-profile defections. Maybe it's good, maybe it's bad, but it's worth watching. The inverse is true for Proskauer: they have made a few too many lateral acquisitions recently for my comfort. Again, maybe its part of a well-reasoned diversification or growth plan; but there's also the chance for a winner's curse that will saddle them with high payments to underperforming partners.

[Julio_El_Chavo]

It seems pretty hard to overstate how well GDC has done when you look at profit margin, PPP, and RPL.

[rayiner]

Interesting, relevant article: http://online.wsj.com/article/SB1000142 ... 98056.html.

[Anonymous User]

It seems pretty hard to overstate how well GDC has done when you look at profit margin, PPP, and RPL.

How do you mean?

[Old Gregg]

It seems pretty hard to overstate how well GDC has done when you look at profit margin, PPP, and RPL.

You already are.

TLSers suck so much GDC dick it's astounding.

[keg411]

It seems pretty hard to overstate how well GDC has done when you look at profit margin, PPP, and RPL.

You already are.

TLSers suck so much GDC dick it's astounding.

.

[Renzo]

It seems pretty hard to overstate how well GDC has done when you look at profit margin, PPP, and RPL.

You already are.

TLSers suck so much GDC dick it's astounding.

.

+1 to all the above. Or, to use data, you could say they're doing a little better than Cadwalader and a little worse than Jones Day.

http://www.americanlawyer.com/PubArticl ... 2548923245

[concurrent fork]

There is a staggering amount of misinformation on here.

Welcome to TLS.

[Julio_El_Chavo]

It seems pretty hard to overstate how well GDC has done when you look at profit margin, PPP, and RPL.

You already are.

TLSers suck so much GDC dick it's astounding.

.

+1 to all the above. Or, to use data, you could say they're doing a little better than Cadwalader and a little worse than Jones Day.

http://www.americanlawyer.com/PubArticl ... 2548923245

I was talking more about how they have improved in profit margin, PPP, and RPL given their leverage rather than how they compare to other firms. But w/e, fuck GDC. FUCK THAT TTT!!!! YEAH!

-TLS cool guy

[Julio_El_Chavo]

Interesting, relevant article: http://online.wsj.com/article/SB1000142 ... 98056.html.

Very interesting, but not surprising. Punishing the younger generations so they can live high on the hog seems to be a bad habit Boomers.

[Renzo]

+1 to all the above. Or, to use data, you could say they're doing a little better than Cadwalader and a little worse than Jones Day.

http://www.americanlawyer.com/PubArticl ... 2548923245

I was talking more about how they have improved in profit margin, PPP, and RPL given their leverage rather than how they compare to other firms. But w/e, fuck GDC. FUCK THAT TTT!!!! YEAH!

-TLS cool guy[/quote]

Yeah, except the linked chart tracks each of the firms relative to their own past performance, and it puts GDC solidly in the "losing profit, gaining revenue" quadrant. So it appears that how they have not, in fact, improved profitability (although RPL might be up, since the chart uses revenue in absolute terms, not per lawyer).

[Julio_El_Chavo]

Yeah, except the linked chart tracks each of the firms relative to their own past performance, and it puts GDC solidly in the "losing profit, gaining revenue" quadrant. So it appears that how they have not, in fact, improved profitability (although RPL might be up, since the chart uses revenue in absolute terms, not per lawyer).

First of all, you've got it exactly backwards: PPP is up and revenue is down compared to 25 years ago.

Secondly, my comment was directed at more recent performance during and after the financial crisis. They've had record PPP for the last several years. PPP, RPL, and profit margin are all up and leverage is down.

Srsly: who the fuck cares about firm performance 25 years ago? The legal market has changed drastically since then. Also, that chart doesn't reflect changes on a per-lawyer basis, so it's basically useless.

[concurrent fork]

Srsly: who the fuck cares about firm performance 25 years ago? The legal market has changed drastically since then. Also, that chart doesn't reflect changes on a per-lawyer basis, so it's basically useless.

This. That graph needs to be limited to 2008-present to be of any value. Even then, it strangely does not take into account RPL, which is the most important metric for firm health.

[Anonymous User]

Incoming MLB SA here. Where are you getting your info on Morgan Lewis?

Anecdotally more volatile:
White & Case, Orrick, O'Melveny(maybe not anymore)

Anecdotally more Stable firms:
Basically the v15, outside of maybe Weil, who I think is still deferring people.

This is basically right. White & Case, Orrick and O'Melveny are the only ones I can think of that have had rumblings (true or not) of serious problems. Clifford Chance's NY office was also rumored to be having some trouble late last year, but I don't think the stability of the firm as a whole is in question.

Among the other firms, there are some that people seem to think have better overall business outlooks, and some that haven't been doing great as of late (but aren't having serious problems).

Off the top of my head, some of the ones in the latter category might include Mayer Brown, Morgan Lewis, Cadwalader, Shearman, Fried Frank, Proskauer, Paul Hastings.

Some firms that are doing especially well: S&C, Wachtell, Quinn, Gibson Dunn.

Pretty much everyone else seems to be somewhere in the middle - business is good but not great.

[imchuckbass58]

Incoming MLB SA here. Where are you getting your info on Morgan Lewis?

Listen, I'm not claiming to have some inside track on these firms, as if I've peeked at their financials. Most of the above is my impression based on publicly reported news. But if I were to make the bear case for MLB, it would be:

-No-offering most of the 2009 summer class: http://www.abajournal.com/news/article/ ... planation/

-Not having a 2010 summer program and breaking lockstep: http://legaltimes.typepad.com/blt/2009/ ... kstep.html

-Ceasing to report revenue to the American Lawyer a year after taking a big hit to both revenue and PPP: http://abovethelaw.com/2010/02/morgan-l ... everybody/

-Moving a bunch of associates off the partner track: http://amlawdaily.typepad.com/amlawdail ... ispay.html

Some people might say that not reporting to the American Lawyer doesn't mean anything. That may very well be true. But the cynic in me says you wouldn't stop reporting to the American Lawyer if you were doing great. Similarly, some people might say that all these austerity measures during the recession were actually good, and that they're a much leaner, healthier firm now for having made those cuts (a la Latham). That may very well be true. But the above information indicates to me that MLB took a worse hit than normal in the recession, and in the absence of information indicating they're doing great now, it would give me pause.

Now, that doesn't mean they're on the verge of collapse, or even that they are unstable. All I'm saying is that from a law student's perspective, based on what information law students have, the above indicators would make me wonder whether MLB is doing as well as other firms that did not take the above steps.

[rayiner]

Srsly: who the fuck cares about firm performance 25 years ago? The legal market has changed drastically since then. Also, that chart doesn't reflect changes on a per-lawyer basis, so it's basically useless.

This. That graph needs to be limited to 2008-present to be of any value. Even then, it strangely does not take into account RPL, which is the most important metric for firm health.

This graph is retarded.

IMHO, AmLaw is partially to blame for Dewey's demise. It's like the USNWR of law firm rankings. By focusing on stupid metrics like total revenue and PPP, instead of more sensible metrics like revenue trends and RPL, it incentivizes reckless behavior (senseless mergers, de-equitizing partners at the cost of revenue, etc).

[dixiecupdrinking]

Srsly: who the fuck cares about firm performance 25 years ago? The legal market has changed drastically since then. Also, that chart doesn't reflect changes on a per-lawyer basis, so it's basically useless.

This. That graph needs to be limited to 2008-present to be of any value. Even then, it strangely does not take into account RPL, which is the most important metric for firm health.

This graph is retarded.

IMHO, AmLaw is partially to blame for Dewey's demise. It's like the USNWR of law firm rankings. By focusing on stupid metrics like total revenue and PPP, instead of more sensible metrics like revenue trends and RPL, it incentivizes reckless behavior (senseless mergers, de-equitizing partners at the cost of revenue, etc).

On top of which, isn't the whole notion of "ranking" law firms by financial metrics kind of bizarre? Wouldn't you rather know what firms have the most well-regarded practices, are the best places to work, offer the most stability, and present the best options down the road (whether partnership prospects or exit opportunities)? These things all strike me as loosely correlated at best with any of the financial metrics.

[Old Gregg]

No single metric tells the whole picture, but all together they can tell a lot. A firm with increasing revenue, PPP, and RPL is clearly an ideal firm for all parties involved.

[thesealocust]

Couple things:

(1) People love to throw around PPP and RPL numbers like they were gospel. For a host of reasons, one shouldn't put too much stock in those numbers. They are a mixture of self-reporting, publicly available information, and bullshit. Even a relatively honest firm is easily capable of having a financial situation that in no way parallels the numbers quoted about them for PPP and RPL. It's a certainty that we're only seeing half-truths on the big lists. For law students on the outside looking in with treasure troves of data it can be fun to nitpick and draw comparisons, but keep in mind it's smoke and mirrors.

(2) For certain types of legal work, there are much better indicators than PPP/RPL/etc anyway. M&A and capital market league tables, for example, are still prone to errors in reporting but will give you a good idea of what firms are running the tables and what firms are begging for scraps. Same-same for plaintiff's side verdicts and news stories about what major corporations are tapping firms for their major defense. Nothing says "firm safety" like BP calling you up and asking you to handle the gulf litigation. I don't give a shit what AmLaw is willing to report Kirkland's PPP as - that's a gold mine.

(3) Considering the above, you can usually get a sense for what a firm is all about. Most have diverse practices, but some of those are the real heart & soul of the firm and others are added services, new practice areas, or just generally less respected. The traditional V5/V10/V15 firms in New York, for example, aren't just The Most Prestigiousest and Most Profitablest because of their general stellar nature. They tend to be the law firms of big banks doing M&A, private equity, capital markets, and credit work. That work happens to be bountiful and profitable. They tend to also have nationally respected litigation practices, but particularly in certain fields - financial work (shareholder suits), white collar crime, foreign corrupt practices act work, etc.

Once you figure out what makes a firm tick, you can figure out how it compares to the other firms ticking in a similar fashion. The firms that are top-dog in profitable areas with strong prospects for the future are going to be the safest bets. The firms that are the "also-rans" in a ton of different practice areas are going to be on shakier footing.

(4) There are firms that live and breathe on laterals (infamously Cadwalader) and firms that basically never hire lateral partners - or sometimes even lateral associates. As an example, Cravath took on a partner and it was news just because of how iron-clad their partnership ranks were otherwise. That doesn't mean such firms can't run into trouble, but it does put them on the opposite side of the map from a lot of the criticisms of Dewey: that only money held the firm together, and not any true sense of partnership.

A few firms I'm quite familiar with boasted of things which strike me as very anti-dewey. One claimed it had literally 0 debt. This is surprising, because while few firms take on Dewey-level debt for expansion or to cover growing liabilities, a ton of firms use revolving lines of credits to even out cash flows. Citi infamously operates as a bank and lender for firms, as do a few other financial institutions, and even occasionally has events or publications about the state of the law firm business model based on its dealings as a lender to enterprises. Being able to operate a firm on cash has business ramifications, but it's inarguably not-Dewey.

The other firm has a partnership that boasts of its relatively modest compensation and lockstep pay. As in the above example, that doesn't make it correct or superior or even insulate it from economic troubles - but it is a firm with a culture built polar oppositely from Dewey. The partnership is a legitimate, capital-P Partnership and the partners are there because they like the work and like the environment and get paid enough. Few get poached, and basically non get hired as laterals.

There are even major, brand-name firms that infamously have no written partnership agreement.

[Blindmelon]

I only really know Boston, but it seems like Goodwin/Wilmer are doing really well. Goodwin hired a large group of 3Ls (3 from BU I believe) and Wilmer is supposedly giving out large stipends and early start-dates. This is probably because IP lit work is really moving now. I heard that Ropes may defer people and they have been pushing for voluntary PI deferrals.

[Anonymous User]

I heard that Ropes may defer people and they have been pushing for voluntary PI deferrals.

I am interested in why this is happening. Anyone have any idea?

Anon bc I am affiliated with the firm but don't know much about its health (read: law school student who does not have any inside info).

[Anonymous User]

I heard that Ropes may defer people and they have been pushing for voluntary PI deferrals.

I am interested in why this is happening. Anyone have any idea?

Anon bc I am affiliated with the firm but don't know much about its health (read: law school student who does not have any inside info).

I had a friend cold-offered there and then the partners called around to drum up a permanent gig at a peer firm. Also, apparently they don't pay a clerkship bonus for people going into the corporate practice.

[Anonymous User]

I heard that Ropes may defer people and they have been pushing for voluntary PI deferrals.

I am interested in why this is happening. Anyone have any idea?

Anon bc I am affiliated with the firm but don't know much about its health (read: law school student who does not have any inside info).

I had a friend cold-offered there and then the partners called around to drum up a permanent gig at a peer firm.

What is cold offered? From a 2L SA position?

[Anonymous User]

I only really know Boston, but it seems like Goodwin/Wilmer are doing really well. Goodwin hired a large group of 3Ls (3 from BU I believe) and Wilmer is supposedly giving out large stipends and early start-dates. This is probably because IP lit work is really moving now. I heard that Ropes may defer people and they have been pushing for voluntary PI deferrals.

Blindmelon, what else do you know about Goodwin?

[Blindmelon]

I only really know Boston, but it seems like Goodwin/Wilmer are doing really well. Goodwin hired a large group of 3Ls (3 from BU I believe) and Wilmer is supposedly giving out large stipends and early start-dates. This is probably because IP lit work is really moving now. I heard that Ropes may defer people and they have been pushing for voluntary PI deferrals.

Blindmelon, what else do you know about Goodwin?

What do you want to know? I'm at BC/BU so I know people going to pretty much every Boston firm. The people I know going there are all incredibly smart and good folk. Pay/bonus-wise they are in-line with Ropes and others - just Wilmer seems to be the most generous with a bar stipend + expenses.

I heard that Ropes may defer people and they have been pushing for voluntary PI deferrals.

I am interested in why this is happening. Anyone have any idea?
Anon bc I am affiliated with the firm but don't know much about its health (read: law school student who does not have any inside info).

No idea why - this is just word of mouth from Ropes people. They typically give 100% offers, but I have heard of them cold offering. They are a bit odd in that their summer class is absolutely massive - almost four times Goodwin and double Wilmer. I have no idea how they handle that many new attorneys, but I think they have a much higher associate to partner ratio than the other two.

Firm health-wise, I think they are all doing well. The Boston market overall seems healthy as there was actually a decent amount of 3L hiring. I just think GP/WH are doing especially well given that WH is one of the top IP lit firms and GP's IP lit group is still growing after they rocked it picking up tons of great attorneys from former Testa.