Do you think the Wachtell could have higher PPP if they increased leverage?
Thought a little more about this while taking a shit. I'm not sure what the answer to this is. My intuition is to say yes, but I do remember people saying that WLRK bills for deals differently than most other firms (as a percentage of deal value as opposed to hours billed), so I'm actually not 100% sure that WLRK would have a higher PPP if they increased leverage (unless the associates themselves were able to pull in more deals as a result, which is very rare).
As far as corporate vs. litigation teams are concerned, corporate teams can be pretty vast (this is more to Rayiner's point above). On a $30 billion deal, the staffing was something like:
1 rainmaking partner
1 rainmaking/workhorse partner
1 workhorse partner
1 senior associate
3 midlevel to senior associates
11 junior associates
And then you have the specialist teams, usually consisting of a partner and an associate:
ERISA, employee benefits, intellectual property, real estate, labor, FCPA, import/export controls, sometimes health privacy matters, etc.
So deal teams can be quite vast and highly levered.
For litigation matters, the only cases where teams are hugely vast and require armies of lawyers are matters like BP and Exxon. But for the typical financial shit that Cleary does, no the litigation teams can be quite small (and I'm assuming one doesn't count staff attorneys and temp attorneys, which Cleary uses). In addition, the use of Cleary as an example is quite odd. They're not really a litigation firm. They're an M&A firm. Their PPP this year came from a pretty solid string of high value corporate deals.
I guess a better counter-example would have been Paul Weiss.
Cleary: The firm's gross revenue rose 5.2 percent, to $1.19 billion. Its profits per partner increased 7.1 percent, to $2.876 million. While overall head count was up 2.8 percent, to 1,192, the firm added just one partner—an increase of 0.5 percent—to bring its total in that category to 194. Cleary's litigators were especially busy in 2013, helping to resolve a class action against client Massey Energy Company and defending the Russian Federation against claims asserted by former OJSC Yukos Oil Company majority shareholders seeking more than $100 billion in damages related to the expropriation of oil assets. On the transactional front, the firm ranked second in terms of the number of financial industry deals handled last year, according to Thomson Reuters legal advisory league tables. M&A highlights included the firm's representation of retailer Neiman Marcus Group Inc. on its $6 billion buyout by a consortium made up of Texas Pacific Group and Warburg Pincus and America Movil SAB de CV in its $22.7 billion acquisition of Koninklijke KPN NV.
Massey Energy Company isn't a financial institution.
And fair to say that the deals leading them to being ranked second in the league tables contributed far more to the bottom line than their litigation matters did.
Read more:
http://www.americanlawyer.com/id=120264 ... z32kMwjI97