Cooley stability Forum

[Anonymous User]

I'm interested in Cooley but I've also heard the firm is financially unstable. What's the truth, and what's the noise?

[Sackboy]

VC work really got hit hard, but there is nothing fundamentally unstable about the firm. Their revenue nudged up a little bit, but they had been hiring expecting sustained growth for the entire year, so that top line revenue got spread over too many mouths and their RPL fell. Lower RPL for the same amount of revenue, means that you're employing more lawyers (i.e., incurring more costs) to get to the same place, which hurt the firm's profit margin and PPP fell significantly. Cooley didn't have the work to go around due to pretty unique market circumstances that were probably the most brutal to VC firms. In turn, the firm has laid off people and will probably continue to rightsize its operations. This is normal for any type of business and does not show inherent instability. Big law lawyers (and those who follow the numbers) are just so drunk on the last 10 years of skyrocketing profits that this seems like the sky is falling to those who don't remember a time before the party began.

[Sackboy]

As an interesting comparison here, Shearman's numbers came out today. If you looked at Cooley's and Shearman's numbers, you'd go "wow, looks like both kind of did similarly bad." The major difference is that 16% of Shearman's equity partners fled last year (Cooley grew its equity partnership 3.5%). When you see equity partnerships dramatically decline in conjunction with bad financials, you know a firm is in deep trouble and not just dealing with a bump in the road. Shearman will no doubt survive, but it's trending further and further into the land of unremarkable interchangeable biglaw with middling finances.

[Anonymous User]

As an interesting comparison here, Shearman's numbers came out today. If you looked at Cooley's and Shearman's numbers, you'd go "wow, looks like both kind of did similarly bad." The major difference is that 16% of Shearman's equity partners fled last year (Cooley grew its equity partnership 3.5%). When you see equity partnerships dramatically decline in conjunction with bad financials, you know a firm is in deep trouble and not just dealing with a bump in the road. Shearman will no doubt survive, but it's trending further and further into the land of unremarkable interchangeable biglaw with middling finances.

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