Legal News Updates

[Jaysen]

@Abstruser I bet this is nice reading!

I remember the feeling when Weil increased their pay just before I was about to start. The sad thing is they also did so after I left...

 

[Jaysen]

Great article from the WSJ yesterday: Being a Law Firm Partner Was Once a Job for Life. That Culture Is All but Dead.

A quick summary for those without access:

• The article begins highlighting the huge difference between Kirkland's equity partners and salaried partners (the former earning between $1.75m to $15m while salaried partners 'can expect to make $800,000 at most').

• This ties in with how law firms have changed: partners used to have job security, fairly equal pay and rarely jumped between different law firms.

• Now, according to the article, 'law firms are now often partnerships in name only'; lawyers are expendable and partners regularly move to rivals for money - bringing their clients with them.

• Law firms have also changed in the way they've grown: many have pursued aggressive expansion, becoming one-stop shops by providing a variety of services to clients.

• With increasing profits at the top, 'lawyers further down the ladder are sometimes getting left behind', according to the article. This references the longer path to partnership at firms, as well as positions like counsel and salaried partner, which act as further stepping stones.

• Again Kirkland is mentioned as junior partners fight for a few small equity partner places each year, while billing over 2,500 hours and sometimes working 80-hour weeks.

• Some firms still use the lockstep compensation system (where partners are paid according to seniority), such as Cleary Gottlieb and Cravath, although this model can make it harder to keep star partners who might be attracted by the higher pay at rival firms using more of a merit-based compensation system.

Comment:

This is a great topic if you're looking for material on some of the challenges facing law firms. Working out how to retain talented lawyers is a real challenge, especially recently with US firms like Kirkland and Latham poaching partners in London. Some firms - like much of the magic circle - have tried to respond by modifying their lockstep, so they have the flexibility to pay more for the best partners, although they need to be careful of alienating existing partners at the firm. For firms like Kirkland, they might be able to attract very talented partners, but the question is how this has affected their culture and how committed to the firm these partners are.

For you guys, I think it's an important factor to consider. Obviously money is a big motivator when you're looking to apply to commercial law firms, but you might also want to consider other factors that may impact your experience at a firm.

 

[Alice G]

Hi everyone,

We are going to start picking this back up again so here is the first article I have to post for you all! It is short but sweet and we will be posting similar legal news updates each Friday so keep a look out!


The Lawyer: UK200: Two more firms join the £1m PEP club (20th September 2019)

DLA Piper and Hogan Lovells are new entrants into the ‘millionaire club’ of law firms whose profits per equity partner (PEP) exceed the £1m mark. This means that 12 firms this year can lay claim to such an achievement as opposed to 10 last year.

PEP figures for these 12 UK firms are as follows:

1. Slaughter and May - £2.6m

2. Freshfields - £1.84m

3. Macfarlanes - £1.73m

4. Linklaters - £1.69m

5. Allen & Overy - £1.66m

6. Clifford Chance £1.62m

7. Travers Smith - £1.25m

8. Dickson Minto - £1.25m

9. Stewarts - £1.21m

10. DLA Piper - £1.07m

11. Hogan Lovells - £1.04m

12. Mishcon de Reya - £1m

39 UK firms have also reported PEPs of over £500,000 which is also two up from last year. Despite these improvements, it is believed that this financial year will be much more worrisome for law firms and it is possible that these PEP figures will be more modest as a result.