Monthly Archives: September 2011

MergerWatch: Law Firm Mergers Rise in Third Quarter

Posted on September 30, 2011 by | 1 Comment

In early September we posted a story on the uptick in law firm mergers. We promised to provide a full account for the third quarter at a later date, and today we can report that the Hildebrandt Institute tracked nine completed mergers involving U.S. firms in the third quarter of 2011. This brings the total for completed mergers in the first three-quarters of the year to 31.  This is a 55 percent increase from the 20 mergers completed in the first three-quarters of 2010.  However, merger activity still lags behind 2009, which saw 49 completed mergers in the same time period. The trends indicate that merger activity in the legal market is picking up, but many firms remain somewhat cautious about large combinations.

The largest U.S. mergers in the third quarter were the combinations of McKool Smith with Hennigan Dorman, and Strasburger & Price with Oppenheimer, Blend, Harrison and Tate.  Additional mergers of note in the third quarter included:  LeClairRyan with Biedermann, Reif, Hoenig & Ruff; McElroy, Deutsch, Mulvaney & Carpenter with Kalison, McBirde, Jackson & Robertson; and Sichenzia Ross Friedman Ference with Anslow + Jaclin.  The mergers covered a wide variety of headquarters locations, including Texas (one merger apiece in Houston and San Antonio); California (two mergers in Los Angeles); New York; Boston; New Jersey (two mergers); and Washington, DC.

In addition, six combinations were announced to become effective at a later date, including four significant tie-ups:  Squire, Sanders & Dempsey with 80+ Perth-based lawyers from Minter Ellison (effective October 1, 2011); Ice Miller in Indianapolis and Schottenstein Zox & Dunn in Columbus, Ohio; (January 1, 2012); Edwards Angell Palmer & Dodge with Chicago’s Wildman, Harrold, Allen & Dixon to create Edwards Wildman Palmer (October 1, 2011); and Jones, Walker, Waechter, Poitevent, Carrère & Denègre  with Watkins Ludlam Winter & Stennis in Mississippi (on or before January 1, 2012).

Non-U.S. merger activity has stayed relatively steady since 2009. Globally, the number of combinations involving two non-U.S.-based law firms in the third quarter was nine, for a total of 32 for the first three quarters of 2011.  This tracks comparably to prior years which saw 32 combinations for the first three quarters of 2010 and 35 in 2009.

Significant tie-ups outside the U.S. slated to be completed in the fourth quarter 2011 include Clyde & Co with Barlow Lyde & Gilbert in the U.K., creating a firm with over 1,250 fee earners, and Beachcroft with Davies Arnold Cooper, also in the U.K., to create DAC Beachcroft with over 1,200 legal professionals.

Australia continues to be an active market and the resource-rich western part of the country in particular has been attracting widespread attention from both domestic and international firms. In addition to the aforementioned Squire, Sanders & Dempsey combination, DLA Piper combined with Australia’s DLA Phillips Fox; Clifford Chance combined with two Australian firms: Chang, Pistilli & Simmons in Sydney and Cochrane Lishman Carson Luscombe in Perth; and Australia’s Gilbert + Tobin joined with Perth’s Blakiston & Crabb (all in the second quarter).  Recently, Ashurst and Blake Dawson announced plans to combine their businesses in Asia by March 2012 with a full merger, conditional on a further vote of the partnerships, by 2014.

Posted by Marianne Purzycki

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Social Media Forum: Content is King

Posted on September 29, 2011 by | 1 Comment

Last week, the Hildebrandt Institute and West LegalEdCenter hosted our Social Media Forum in New York City.  The goal of the event was to step beyond the basics of social media at law firms, and discuss how lawyers and firms can harness social media to help drive their business and better serve their clients.

Keynote speaker Peter Shankman kicked things off on an inspiring note, discussing his extensive experience with using social media and business.  According to Shankman, if your social media efforts are not bringing in revenue, “you’re doing it wrong.”  This is an important message for law firms, many of which are still apprehensive about social media and may question how it can enhance their business.  Shankman went on to explain that as has always been the case, it is the firm’s services that matter most.  Tools like Twitter, blogging and LinkedIn are just that – tools that can help firms better communicate with their clients and potential clients.

This message was echoed throughout the day, as panelists and attendees discussed how best to integrate social media into their firm’s overall strategy.  Again and again, the conversation came back to the idea of social media as a tool – content and quality should remain paramount.  Although the day was full of strong analysis, several moments stood out.

In the first panel of the day, event co-chair Jasmine Trillos-Decarie, the Director of Marketing and Business Development for Foley Hoag, noted that social media can be a “great equalizer” for small firms.  Tools like Twitter and LinkedIn have been fully embraced by many in the business community, which means that attorneys trying to open up a line of communication now have new methods at their disposal.

Panelist Jeff Ifrah of Ifrah Law is an example of Trillos-Decarie’s words brought to life.  A veteran of large law firms, Ifrah used blogging to help build the brand and reputation of his own firm when he went started his own firm.  The firm’s blogs (Crime in the Suites, focusing on white collar issues, and FTC Beat) provide firm attorneys with an opportunity to demonstrate their expertise.  The blogs have worked as business development tools, in one case helping bring in a client simply by showing up in the right Google search results.

Ifrah spoke on a panel about creating a blogging culture within a law firm, moderated by event co-chair and author Adrian Dayton.  Dayton expounded on the example Ifrah sets, observing that blogging is a good way to showcase a firm’s “product”: its lawyers.  Later on, Adam Stock (Director of Marketing and Business Development at Allen Matkins Leck Mallor & Natsis) and Aden Dauchess (Director of Digital Marketing at Womble Carlyle) demonstrated how video can be used to help sell that product, through both substantive informational videos and more marketing-focused clips.

And finally, my favorite moment of the day involved a young lawyer using social media to do what lawyers have always done.    Amy Knapp of Knapp Marketing relayed the story of Ram Sunkara, an associate at Sutherland Asbill.  Sunkara used his own contacts on LinkedIn, which initially consisted primarily of old classmates, to begin building a network of contacts that he eventually developed into a thriving landfill gas practice.  Although LinkedIn is often derided as the least dynamic of this generation of social networking sites, it apparently has more potential than some people think.  Sunkara’s success is the result not of the magical powers of LinkedIn, but of his own ingenuity and diligence in using the site to do some old school networking.

Thanks to these moments and all of the other great contributions from the moderators, panelists and attendees, the Forum offered a real education in how social media can be used to augment the work of attorneys and firms in serving their clients.  While the method of communication matters (no one sends client alerts via telegram, after all), at the end of the day, content is king.

Posted by Emily Fisher

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No Lawyer is an Island

Posted on September 29, 2011 by | Leave a comment

For better or for worse, law firms tend to place a premium on individual contributions. Many compensation systems, for instance, reward partners based on origination credits and personal productivity. Clients say they “hire the lawyer, not the firm.” And top rainmakers are kept happy so that they do not jump to competitors. There are still many firms that remain largely a collection of individual practitioners, where true collaboration and teamwork are relatively rare.

But although the focus is typically on individuals, research shows that success in professional services is rarely the sole function of individual effort and brilliance. While there has been little systematic research in law firms, research out of Harvard shows that for another type of professional, investment analysts, performance of star analysts tends to deteriorate when they change firms. Why? Authors Boris Groysberg, Ashish Nanda and Nitin Nohria conclude that context matters.  Context is everything surrounding a professional, from organizational systems and procedures to co-workers. And yet rainmakers and the firms where they work tend to underestimate the importance of these elements.

According to Groysberg, Nanda and Nohria:

Although many companies have ample resources, good systems, and smart people, executives and professionals often forget that every organization works a little differently. The informal systems through which executives find information and get work done are unique to each company. When stars join new organizations, they must learn about the informal networks and build trust with other people before the systems will work for them. However, stars don’t give themselves enough time to get up to speed in new settings because of their egos. They also invest in skills they can use across different companies and don’t care about developing their firm-specific knowledge because companies treat them as free agents.

So even though firms pay big to bring on successful players, in many cases performance actually deteriorates because the star is dealing with different systems and co-workers. In other words, according to these authors, performance is simply not automatically portable from one firm to another.

Importantly, the negative effects on performance can be mitigated when rainmakers move together in teams. So by bringing colleagues with them, rainmakers can often replicate enough of the context of their success to continue to outperform.

More recently, Christopher Rider, a professor at Goizueta Business School at Emory University, showed that rainmakers aren’t the only ones who benefit from colleagues. In studying law firm dissolutions, Rider found that lawyers can leverage relationships with past co-workers to land jobs in new firms. Studying six recent law firm dissolutions, Rider’s research demonstrates that lawyers were more likely to get new jobs in firms where former co-workers had landed – and this finding holds true for partners and associates. These connections were more critical than another type of important connection, law firm alumni networks. The greater influence of work over school ties further indicates that colleagues (and context) are an important component of career success.

Taken together, the research suggests that the bonds between co-workers can be a significant and under-recognized tool for career success among attorneys, whether or not you’re a rainmaker, and regardless of career stage. The people who work in the office next door and the lawyers you meet at the water-cooler are not just people with whom you exchange observations about the weather and the commute– they can provide much deeper benefits to your career. Law firm leaders who recognize that their firms are not simply a collection of isolated individual practitioners may find more success in hiring, integrating, and retaining lateral hires – a process that has traditionally been fraught with risk and uncertainty.

Posted by Lisa Rohrer

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Women in the Legal Workplace: Working Mother’s Best Law Firms for Women List

Posted on September 28, 2011 by | 1 Comment

According to the Nielsen Company, 10.6 million people watched Julianna Margulies reprise her role as a law firm associate on the season premiere of The Good Wife on September 25th.  Presumably, most viewers were tuning in for the show’s love triangles and political intrigue, and not because they need to find out how Margulies’ character balances a demanding legal career with motherhood.  But for women in the law, that balancing act often has all the drama of the typical nighttime soap, minus the glamour.

But maybe that doesn’t have to be the case.  Earlier this month, Working Mother Magazine released their annual list of the nation’s 50 Best Law Firms for Women, sponsored by the National Association for Female Executives (NAFE) and Flex-Time Lawyers, a consulting firm focused on work life balance and lawyer retention.  The Working Mother Research Institute surveyed eligible firms (those with at least 50 U.S. attorneys) and scored them on their responses to nearly 500 questions regarding leave policies, child care, flex-time, leadership, compensation and advancement of women, professional development, and retention of female lawyers.

The firms chosen for the list reflect a portion of the legal industry that is increasingly welcoming to women.  These firms, on average, employ an attorney workforce that is 35% female.  While only 19% of their equity partners are women (again, on average), this is a 3% increase since 2007, when the list average was 16%.  Among firms that offer a non-equity partnership track, 28% of non-equity partners are women (versus 22% in 2007).  These numbers are encouraging.  However, they show that even among these elite firms, there is room for improvement, particularly in the area of law firm leadership.

In addition to demographics and leadership, the list also examines how well firms accommodate work-life balance.  The firms on the list all offer the option of working reduced hours, and 92% of the firms offer flex-time scheduling options.  Perhaps more importantly, the attorneys at these firms appear to feel more comfortable using these policies than attorneys at other firms.  On average, 10% of lawyers employed by the list’s firms work a reduced schedule, compared to the national average of 6% (Source: NALP).

Geographically, the firms on the list can be found in major cities throughout the continental United States, though some cities seem to produce more women-friendly firms than others.  New York and Chicago led the pack – each city is home to the headquarters of seven firms on the list.  Washington, DC, and Minneapolis were not far behind, with six firms apiece.

Minneapolis is also home to one of the real standouts on the list.  Nilan Johnson Lewis is a general practice law firm  with more than 60 attorneys, 52% of whom are women.  Women also comprise 37% of their equity partnership ranks, and 82% of non-equity partners.  According to Working Mother, the firm has achieved this success in diversity through mentorship programs and flexibility.  Like many firms, Nilan Johnson assigns all new associates a mentor to help guide them through their early years at the firm.  But unusually, 60% of these mentors are women, which means female associates have a chance to see how other women succeed in the firm, and male associates get comfortable with the idea of working with and for women.  Nilan Johnson has also developed a unique intranet page that facilitates flexible work schedules.  Attorneys can easily inform their colleagues if they are working from home or will be arriving late or leaving early, helping to ease face time pressures.  According to Working Mother, “The firm has effectively created a culture where it’s acceptable to have a life while succeeding in a legal career.”

Because while The Good Wife makes the life of an overworked lawyer trying to raise two kids look glamorous, in the real world that balance is often simply stressful.  The efforts of Nilan Johnson and the other firms on the list may help relieve some of that stress, leaving the drama out of the office and on the television screen, where it belongs.

Posted by Emily Fisher

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Industry Insight: Acculaw’s new training model

Posted on September 23, 2011 by | 1 Comment

In yet another example of how innovative companies are responding to the pressures facing law firms as a result of changes taking place in the business of law, the U.K. company Acculaw has received approval from the Solicitors Regulation Authority (SRA) for a new model of trainee recruitment. Acculaw will recruit its own trainees directly from postgraduate law schools and then assign or “second” them to law firms and in-house legal departments.  The idea is to help law firms and legal departments save money by cutting back the number of training contracts they offer and reducing the costs associated with training each individual. The cost to recruit and train one trainee is estimated to be approximately £175,000.  Trainees will spend at least three months with each firm and be seconded to a maximum of three different firms or in-house legal departments.

According to Susan Cooper, founder and CEO of Acculaw:

 ”This is a new model developed by Acculaw to respond to many pressures being put on firms and in-house legal departments, but also to offer greater opportunities for those trying to enter the legal profession.  Smaller firms and in-house legal departments may have a trainee requirement but are not keen to manage the secondment process which is necessary to ensure their trainee is trained in the minimum practice areas required by the SRA. Acculaw handles this for their clients allowing them to focus on the training of their future lawyers.”

Acculaw contends that it will only take on trainees to match specific commitments from firms and in-house teams.  This new training model, however, could “dramatically reduce” the number of new graduates recruited by firms in London, according to an article in The Lawyer this week.  And the salaries of Acculaw trainees will be lower. While Acculaw trainees can expect to receive salaries above £20,000, which is higher than the minimum set by the Law Society, they are lower than typical trainee salaries in the City, which start at £30,000.

U.K. law firm Olswang is the first firm to sign on to Acculaw’s pilot program.  Olswang director of HR Ffion Griffith commented:

 ”We can confirm that we are piloting the Acculaw scheme with one trainee. Our piloting of this service in no way reflects upon our current recruitment. We are piloting the scheme to see if it can help flex up our recruitment needs during times of high activity levels for the firm.”

The agreement follows the firm’s announcement in February that it would cancel its 2013 graduate recruitment program and defer its 2011 trainee intake to reduce the number of trainees due to “changes in client demand”.

Posted by Marianne Purzycki

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