Legally Speaking – Legal Recruiter Blog

By Andrew Lu on June 21, 2012 5:02 AM

Solo practitioners in Oregon have it worst, while 11-20 person firms in New York had it among the best in terms of getting paid for legal hours worked. This according to a new survey on attorney billing efficiency.

The survey looked only at small to medium sized firms with less than 50 lawyers. So the big firms with endless resources were not included. Though you can probably bet those firms milk every last penny out of their clients (and their attorneys).

The survey looks at attorney billing efficiency for firms, reports The Wall Street Journal. Billing efficiency means how much time you are actually paid relative to the amount you put in. So if you work nine hours, but only get paid for six, your billing efficiency would be 66%.

Not surprisingly, solo practitioners and two-person firms were the lowest on the efficiency scale nationally. What is surprising, is just how inefficient solo and two-person firms are, billing only at a 39% rate. Solos are expected to perform a lot of non-billable work like marketing, rainmaking, and administrative duties, so this may explain the low number. Additionally, solos probably don’t have enough resources to hire secretaries and assistants to perform the unbillable work. But getting paid for only half your time seems ridiculous. Perhaps this should motivate you to hire some help.

Sadly for attorneys in Oregon, all attorneys who responded to the survey only billed at a 40% efficiency rate, reports the Journal. If all attorneys in Oregon are only billing at a 40% rate, one can only imagine what a poor solo in Oregon gets.

On the opposite spectrum, lawyers in Delaware billed at 94% of hours worked. New York, Colorado, Utah, Louisiana, and Mississippi also ranked high on the list, reports the Journal.

Attorney billing efficiency varies wildly from state to state and among different sized firms. The fact that lawyers in Oregon bill less than half what their peers in Delaware do is shocking. If you’re a small firm attorney, you should consider hiring assistants. This may be a case where spending some money, will help you make a lot more.

Article originally appeared in:

Brian Baxter

The Am Law Daily

06-19-2012

A trio of financial services transactions announced this month have boosted the corporate practices of several leading law firms.

New York–based private equity giant Kohlberg Kravis Roberts announced Monday its purchase of Prisma Capital Partners, an investment firm focused on hedge funds. Reuters reports that the money management unit of Dutch financial services giant Aegon, which helped set up Prisma in 2004, will sell its minority stake in Prisma but remain a significant investor in Prisma’s funds.

Financial terms of the deal were not disclosed, but the transaction has yielded roles for two Am Law 100 firms that are no strangers to private equity and hedge fund work.

Schulte Roth & Zabel, a firm known for its top-tier hedge fund and investment management practice, is advising Aegon and Prisma on the deal with a team led by M&A partners Andre Weiss and Christopher Harrison, tax partner Philippe Benedict, investment management partner Jennifer Dunn, and employee benefits partner Holly Weiss. Anne Wynne has served as general counsel and chief compliance officer for New York–based Prisma since June 2010.

Simpson Thacher & Bartlett is advising longtime client KKR on the acquisition. Corporate partner Gary Horowitz, investment funds partner Jason Herman, tax chair Steven Todrys, tax partner Katharine Moir, employee benefits partner Andrea Wahlquist, and corporate counsel Lisa Klar are leading a team from the firm working on the matter.

KKR has long been one of Simpson Thacher’s largest clients. In 2011 alone, the firm advised KKR on its $7.2 billion acquisition of oil and gas company Samson, its $2.38 billion buy of Pfizer’s Capsugel division, its sale of a stake in Web domain name provider Go Daddy Group, and the purchase of stakes in Academy Sports + Outdoors and Vietnam’s Masan Group.

David Sorkin, a former Simpson Thacher partner and member of the firm’s executive committee, has served as general counsel of KKR since 2007. Documents disclosed as a result of KKR’s $2 billion initial public offering in 2010 revealed Sorkin’s annual compensation to be nearly $7 million. (Simpson Thacher handled the IPO work for KKR.)

Also on Monday, billionaire Nelson Peltz disclosed that he had amassed a 5.1 percent stake in investment boutique Lazard through his Trian Fund Management. Peltz, whose hedge fund is now Lazard’s largest outside shareholder, has thrown his support behind a strategic plan outlined earlier this year by Lazard management to increase its business and boost shareholder value.

Paul, Weiss, Rifkind, Wharton & Garrison has traditionally handled transactions for Peltz, such as the activist investor’s $2.3 billion acquisition of Wendy’s International in 2008 and the $130 million sale of its majority stake in the Arby’s restaurant business last year. A Paul Weiss spokeswoman did not respond to a request for comment on the Lazard matter.

Lazard’s longtime outside legal counsel of choice has been Cravath, Swaine & Moore. Bruce Wasserstein, a former lawyer at the firm who served as chairman and CEO of Lazard, eventually prevailed in a fierce internal battle to take the investment bank public in 2005. (Wasserstein, who died in 2009 at 61, once owned The American Lawyer and parent company ALM before selling both to London-based Incisive Media in 2007 for $630 million.)

Two spokeswomen for Cravath did not respond to requests for comment on whether Lazard turned to the firm for counsel on the stake taken by Peltz, nor did corporate partner and longtime Lazard lawyer Erik Tavzel. Scott Hoffman, another former Cravath lawyer who serves as managing director and general counsel of Lazard, did not respond to a request for comment on the bank’s legal advisers for the transaction.

Last week, Lazard elected former Patterson Belknap Webb & Tyler partner Richard Parsons, who also served as chairman of Citigroup and CEO of Time Warner, to its board of directors. Other members of Lazard’s board include Akin Gump Strauss Hauer & Feld senior counsel Vernon Jordan Jr. and former U.S. Supreme Court clerk Hal Scott, a Harvard Law School graduate who serves as director of the Committee on Capital Markets Regulation, an independent and nonpartisan research organization based in Cambridge, Massachusetts.

Several prominent Am Law 100 alums also work at Lazard. Last year the former managing partner of Cleary Gottlieb Steen & Hamilton, Mark Walker, left after 45 years at the firm to join Lazard’s sovereign advisory group, where he has played a prominent role over the past year advising the Greek government. Lazard also employs Timothy Pohl, the former cohead of Skadden, Arps, Slate, Meagher & Flom’s corporate restructuring practice, who joined the bank in January 2009.

In another major deal announced earlier this month, London-based Norton Rose, which in recent years has put a premium on explosive international growth, took the lead for Absa Bank, a South African subsidiary of Barclays, on its $1.2 billion purchase of the retail credit card business of African department store chain Edcon.

A team of Norton Rose lawyers in South Africa and Abu Dhabi led by corporate partners Kevin Cron and Alan Bainbridge are advising Johannesburg-based Absa Bank on the deal, the biggest in its history. With roughly 700 branches and nearly 9,300 ATMs throughout South Africa, Absa Bank is one of the largest retail and mortgage lenders in the country

Chris Johnson
The Am Law Daily
06-11-2012

The globalization of legal business has generally come in waves, moving from one country to the next. In the late 1990s, U.S. and U.K. firms flocked to Germany. Intense law firm activity has also been seen in recent years in Hong Kong, China, Russia, Central and Eastern Europe, and the Middle East. Most recently, Australia and Canada have dominated the headlines.

The signs are that it may now be Africa’s turn. The eyes of the international legal elite seem to be increasingly fixed on the region, attracted by an economy that is one of the world’s fastest growing, with gross domestic product still rising at almost 5 percent per year.

Last week, Baker & McKenzie became the latest firm to launch on the continent, establishing an office in South Africa with the hire of a 31-lawyer team from Dewey & LeBoeuf—one of the now-bankrupt firm’s last remaining outposts. Wildu du Plessis, who joined Baker alongside fellow co–managing partner Morne van der Merwe and six other partners, says that the specialist energy, mining, and projects group was approached by several firms, but that Baker’s “unmatched global platform” clinched the deal. Baker, highest-ranked firm by revenue on the The Am Law 100, now has 70 offices in 43 countries.   Read more

William D. Henderson
The Am Law Daily
05-29-2012

Dewey & LeBoeuf, an amalgam of two storied New York City law firms that merged in 2007, has died. Understandably, this has prompted a lot of soul-searching among lawyers. One storyline that will attract many followers is that large law firm lawyers, long viewed as the profession’s elite class, have lost their way, betraying their professional ideals in the pursuit of money and glory. This narrative reinforces that lawyer-joke mentality that lawyers just need to be become better people.

And that narrative is wrong. Yes, we all need to become better people, but that still won’t begin to cure the larger structural problem affecting large U.S. law firms. At its core, Dewey’s collapse has less to do with individual moral failings than with aging organizational structures that worked remarkably well for over a century, but now, for a variety of reasons, inhibit law firms’ ability to adapt to a changing legal marketplace.

Many law firm leaders recognize this problem, yet they struggle to communicate it convincingly to partners who have become rich under the existing model. The economics are compelling. Between 1978 and 2003, legal services as a percentage of the nation’s GDP increased from 0.4 percent to 1.8 percent. In the mid-2000s, average profit per partner shattered the $1 million-per-year barrier and kept climbing. This pattern of getting a bigger slice of a bigger economic pie continued right up until the collapse of Lehman Brothers in the fall of 2008.   Continued…