Role of Appellate Practice in the Business of Law Forum

[MergerQueen]

It is my suspicion that appellate practice isn't particularly lucrative. Rather, the Neal Katyals and Paul Clements of the world are brought on to firms like Hogan Lovells and Kirkland & Ellis to raise the profiles of the firms in the public eye, so folks will think to retain those firms for matters in the corporate domain.

Am I correct? Way off base here? I've been operating under this assumption for a long time, and I'd be interested to know if I'm delusional.

[existentialcrisis]

I think it’s a loss leader to help get litigation work for sure.

I’m not sure how it would possibly help firms get corporate work though?

ETA: Op actually seems like some kind of troll, prob shouldn’t have even responded.

[Sackboy]

There's a big difference between "loss leader" and "not as profitable." I have no doubt that top appellate lawyers bill $1,000-$2,000/hr. and their associates bill at a high hourly rate. The leverage is likely much worse, but I doubt it's so bad that the practice isn't profitable at all. It might just operate with a 20% profit margin while M&A has a 70% profit margin. Because this work is treasured by litigators and makes headlines, it gets to stick around. Meanwhile, most firms shed lower margin practices, like benefits counseling, SALT/tax credit work, low dollar non-PE M&A, etc., that can't sustain the firms rates and aren't sexy/treasured enough to keep around.

[Anonymous User]

As a recent fourth-year in a top DC appellate shop, my hourly rate was already above $1,000. Still, the amount of time one can bill to any particular appellate matter is considerably less than one could bill to a large district court case or an investigation, and the top appellate shops also do a lot of reduced-rate or pro bono appellate work. So I think it's definitely right that appellate practices are less profitable.

[jotarokujo]

I think it’s a loss leader to help get litigation work for sure.

I’m not sure how it would possibly help firms get corporate work though?

ETA: Op actually seems like some kind of troll, prob shouldn’t have even responded.

Even if they are a troll it seems like a non-troll post, or at least objectively can be considered a non-troll post. Don't think you fucked up

[RedNewJersey]

The low leverage is an issue, but the much bigger issue is that a large number of Supreme Court arguments are done for free, or at a much reduced rate.

I guess the idea is that you'll get follow-on cases, or be top-of-mind as a premier litigation firm. It could also help with recruiting the tippy top people. But it's also possible that they just kind of like it and don't know if it's on net profitable in some indirect way or not. It's also possible that they address the low profitability by paying appellate partners less.

[Anonymous User]

Anecdotally, some of the well-credentialed appellate partners at my firm are billed out at a lower rate than run of the mill litigation partners. Yet these very same appellate partners are promoted on pitches and in client meetings as an asset to litigation teams and for long-term case strategy.

As others have suggested, I think appellate practices are one of those "must have" groups both for clients and law students, even if they aren't as profitable as other practices. Litigation practices are, on average, less profitable than corporate practices, but you don't see firms clamoring to drop the litigators. Even if the firm doesn't squeeze as much profit out of appellate litigators, it's still better for a firm to grab that slice of profits rather than lose appeals to other firms. Plus, if another firm steps in for the appeal and does well, the original firm might lose the representation on a remand or even down the line for other cases. Vertical integration is key.

Because appeals are inherently tied to the underlying litigation, I think firms treat them as different from some more niche practice areas / high volume, low value work that firms have dropped recently (e.g., patent prosecution). Firms rarely hire prosecution counsel for a patent litigation (in fact, there are good reasons why not to), and the cross-selling (likely in IP transactions) is minimal.

[MergerQueen]

I think it’s a loss leader to help get litigation work for sure.

I’m not sure how it would possibly help firms get corporate work though?

ETA: Op actually seems like some kind of troll, prob shouldn’t have even responded.

How is this trolling?

[throwawayt14]

Pretty sure Lat mentioned during the Clement / Kirkland debacle that Clement brought in substantial business at Kirkland, but I don't have access to the exact post anymore.