All articles tagged with #biglaw firms
Elite Biglaw firms are likely to match Milbank's recent salary raise for associates, with some potentially going even higher. While it is not necessary for other firms to raise compensation in the absence of other firms doing so, legal analysts believe that at least the top 25 Am Law firms will follow suit. The decision of one firm to match Milbank's raise often leads to a domino effect across the industry.
Milbank has announced its annual year-end bonus scale for associates, matching last year's bonuses for each class. In addition, the firm will increase the base compensation for all associates by $10,000 starting January 1, 2024. This move goes against predictions of economic uncertainty in the industry and positions Milbank as a compensation leader. Other Biglaw firms will be closely watched to see if they can match this additional cash and remain competitive.
Biglaw firms in the US are reducing the number of first-year associates they hire, with the average number of new hires down by nearly 17% among Am Law 100 firms and 25% among Am Law 200 firms. Midsize firms also brought in 9% fewer first-year associates. This decline in hiring is part of cost-cutting measures to maintain profitability, as overall law firm direct expenses increased by over 6% in Q3 2023. However, there is still a strong lateral market for experienced attorneys.
Biglaw firms are implementing tougher performance reviews as a means of rightsizing their ranks without resorting to layoffs. The surge in demand in 2021 led to a rush in hiring, resulting in the employment of lawyers who may not have found positions in a different market. As a result, associates are now facing more stringent performance evaluations than they would have in a stronger environment.
Biglaw firms are cautiously optimistic about the future, with many looking ahead to 2024 and planning for a potential comeback in deals. The legal profession is currently experiencing a slowdown in corporate work, leading clients to put their aspirations on hold for the foreseeable future. However, the biggest Biglaw firms are more bullish about the upcoming year.
A survey conducted by Wells Fargo's Legal Specialty Group reveals that while headcount in the legal sector has increased, attorney productivity has reached a historic low. The survey, which includes 130 firms, shows a 3.9% increase in lawyer headcount but a 4.1% decline in productivity. Despite the drop in demand, most firms are choosing to wait it out rather than resorting to layoffs or associate deferrals. The survey also found a decrease in billable hours per lawyer, with an annualized pace of just 1,538 hours compared to last year's high of 1,688 hours. However, firms have seen a 4.4% increase in revenue, largely due to higher billing rates.
Biglaw firms are using "stay interviews" as a new approach to assess the needs of their associates and make necessary changes to retain them. Cozen O'Connor and Lathrop GPM have reported positive experiences with these interviews, which have helped identify areas for improvement such as firm culture, work-life balance, and professional development opportunities. The use of stay interviews has resulted in increased associate retention rates, demonstrating that innovative methods can improve associate satisfaction and encourage them to stay with their firms.
Katten Muchin, an Am Law 100 firm, has announced layoffs affecting less than 5% of attorneys and staff. The firm's decision to downsize is attributed to poor economic conditions for their clients and an overcapacity resulting from increased hiring. Katten Muchin will also defer the start date for some incoming associates. The firm reassigned team members to practice groups with higher demand and made reductions in groups where existing and expected demand is diminished. The layoffs reflect the reality of the business environment and the firm's commitment to providing growth opportunities.
Biglaw firms are regaining leverage over their associates by implementing in-office work mandates, as demand for legal services remains low. While some lawyers may choose to leave firms with stricter office attendance requirements, the overall lack of work opportunities in the current economic climate gives elite firms the power to enforce these mandates. The future of this leverage will depend on broader economic forces.
Vault's regional rankings have revealed the top 10 most prestigious Biglaw firms in New York City, based on votes from associates. The list includes Cravath, Swaine & Moore; Wachtell, Lipton, Rosen & Katz; Davis Polk & Wardwell; Skadden; Sullivan & Cromwell; Simpson Thacher & Bartlett; Latham & Watkins; Paul, Weiss, Rifkind, Wharton & Garrison; Kirkland & Ellis; and Debevoise & Plimpton. These firms are known for their high compensation and have set the stage for salaries and bonuses in the legal profession. Milbank, a leader in raising associate salaries and bonuses, ranked 15th.
BTI Consulting Group has released its annual list of "all-star" attorneys who excel in client service, based on feedback from over 350 in-house decision-makers at large organizations. Jones Day and Gibson Dunn lead the pack with 13 and 11 lawyers respectively, while almost 300 attorneys were named to the list. Four lawyers were mentioned by more than one client, including Stephanie L. Adler-Paindiris of Jackson Lewis, Sandra C. Goldstein of Kirkland & Ellis, Jeff E. Scott of Greenberg Traurig, and Sara M. Turner of Baker Donelson.
According to a report by LexisNexis CounselLink, partners at the 50 largest law firms are billing at significantly higher rates than those at the next tier of firms, with an average increase of 4.5% in 2022. This marks the largest annual percentage increase in partner billing rates since the report's inception a decade ago.
Elite Biglaw firms are conducting stealth layoffs, claiming that their job cuts were performance-based, which is a "red herring," according to Steven Harper, a former Kirkland & Ellis partner who writes about the legal profession. Keith Wetmore, a managing director at recruiting firm Major, Lindsey & Africa, advised that when it comes to layoffs, the polite thing to do is to say that lawyers have been let go, including some very strong performers.