Category Archives: Market Trends

Aussie Lawyers Satisfied, but Split on Leaving Law

Posted on May 23, 2013 by | Leave a comment

Well over half of surveyed lawyers rate themselves as happy with their jobs, yet a separate survey found a 31-30 split between those wishing to stay in or leave the law, according to two Australian surveys reported in Lawyers Weekly.

In the Robert Walters’ Employee Insights Survey, more than 1,000 attorneys were surveyed about their job satisfaction. The majority were found to be happy in their jobs, with 44 percent citing work-life balance as the main reason.

The Robert Walters survey found:

  • 56 percent of respondents are happy to very happy in their job,
  • 32 percent are mostly happy, and
  • 12 percent are unhappy.

Yet an earlier Lawyers Weekly poll of 1,000 lawyers found that they’re divided about whether they love or want to leave the law, with 31 percent saying they love what they do and who they work with and 30 percent saying they want to leave and are waiting for the right time.

“In light of challenging economic times and many law firm mergers and restructures, it’s understandable for individuals to not be completely satisfied at work all the time,” Samantha Campbell, a manager at Robert Walters, told Lawyers Weekly.

“Law can be quite pressured, but it doesn’t negate [the fact] that a lot of lawyers do enjoy what they do … there are a lot of pluses,” Lisa Gazis, managing director of Mahlab Recruitment, told Lawyers Weekly. “There are lawyers who are doing it tough and there are lawyers who are disgruntled. People are anxious about what’s happening out there.”

Stimulating and interesting work, however, outweighs the downsides of the high-pressure legal environment, according to Gazis. Campbell concurred, adding that dissatisfaction is often due to the pressures put upon lawyers by senior management or clients, not the type of work they’re doing.

“The highly competitive work environment … along with the onerous billable-hour requirements and intense deadlines are what tend to drive legal professionals to question the validity of their career choice from time to time,” Campbell said.

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Despite Changing Market, Law Firm Business Models Essentially Stay the Same, Survey Finds

Posted on May 22, 2013 by | Leave a comment

Law firm leaders are acutely aware of the changing legal landscape, but are they adjusting their existing business models fast enough to keep their firms afloat? According to the Altman Weil Law Firms in Transition Survey 2013, they aren’t. Most firms have only made “incremental” changes to their business models, the report states, “rather than pursuing opportunities to meaningfully differentiate their firms in the eyes of clients.” The report suggests that these small changes will not lead to a sustainable, long-term solution.

The survey polled managing partners and chairs at U.S. firms with more than 50 lawyers, receiving feedback from 238 firms. It found little evidence of tangible changes in law firm operations, despite an “ongoing evolution of thinking” about the new legal market. According to the survey findings:

Headcounts and billing rates are still up on average—albeit far less than they would have been prerecession. Firms use alternative pricing, but in a limited (and usually nonstrategic) way. There is some tightening of partnership admission standards at the top of the pyramid, and broader use of contract lawyers at the base.

But none of the small changes made so far, the report says, will lead to a long-term solution if the changes already seen in the market accelerate.

Other top findings include:

  • 96 percent of firm leaders think more price competition and greater practice efficiency are permanent changes in the legal market
  • 90 percent of leaders believe there will be more commoditization of legal work
  • 80 percent of leaders believe there will be more nonhourly billing arrangements
  • 79 percent expect more competition from nontraditional legal service providers
  • 29 percent of firms have changed their strategic approach to pricing since the recession, with a median of 20 percent to 30 percent of all legal fees now being discounted and a median of 10 percent of fees generated from nonhourly billing
  • 91.5 percent of firms raised their overall billing rates for 2013, with a median increase of 3 percent

You can download the full 63-page report—which also includes data on lawyer staffing levels, succession planning, and the future of the profession—at Altman Weil here.

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Money Makes the World (and UK Lawyers) Go ’Round

Posted on May 14, 2013 by | Leave a comment

With nearly 3,500 U.K. lawyers unable to afford renewing their practicing certificates, it’s no surprise that money is the top reason cited by almost 40 percent of U.K. associates for joining U.S. firms. But that majority also forgoes the highest-paying U.S. firm for those with the most “distinguished heritage” in the United Kingdom.

According to finance provider Syscap, 3,456 U.K. attorneys failed to renew their certificates in December. That’s a loss of almost 3 percent of the United Kingdom’s practicing solicitors, City AM reports. The drop is attributed to a lack of bank lending, legal aid cuts, and an increase in certificate costs that rose from £1,561 in 2011 to £2,201 in 2012 (that’s approximately $2,377 to $3,351, respectively).

“The scale of this year’s exodus from the profession is surprising,” says Syscap Chief Executive Phillip White. “It suggests that smaller law firms may be under more financial pressure than anyone thought.”

Given the rising price of doing business, it’s therefore understandable that a separate survey of U.K. associates found that nearly 40 percent said money was the top reason they joined a U.S. firm. This was almost double the number in 2012 when only 23 percent said money was the top motivator.

What was surprising, according the The Lawyer article reporting the findings, was that only 7 percent of respondents listed the highest paying firm as their preferred destination. Bingham McCutchen, which pays newly qualified London lawyers £100,000 (about $150,000), came in far below Hogan Lovells, which was chosen by 44 percent of respondents even though it pays 40 percent less (£61,500, or about $94,000).

In fact, respondents were much more likely to apply to Baker & McKenzie, DLA Piper and Hogan Lovells due to their long, distinguished histories in the United Kingdom.

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Demand May Be Down, But Not For Long, Surveys Say

Posted on May 8, 2013 by | Leave a comment

Yet another survey has found that legal services demand was down for the first quarter of 2013—but it’s not expected to last. Citi Private Bank’s Law Firm Group surveyed 166 law firms and found that while demand is down 3.3 percent, almost two-thirds of respondents to another (albeit informal) Citi survey expect demand to increase this year.

The drop in demand, however, was mostly offset by “a combination of stronger-than-usual cash collections and rate increases that were slightly higher than seen in recent years,” writes John Wilmouth, senior client advisor at Citi’s Law Firm Group, in an article for Am Law Daily. Even though the increase in revenue was a disappointingly small 0.2 percent, the article notes that it was expected and mostly due to a 4.0 percent rate increase—the largest Q1 increase since 2008.

Overall expenses were up 3.4 percent, with operating expenses increasing 3.1 percent and lawyer compensation expenses up 3.8 percent. The compensation increase, however, was “out of proportion” to the small 0.5 percent increase in full-time equivalent attorneys. Citi attributes this to higher associate bonuses, a slight shift from associate attorneys to income partners, and rising health care costs.

Hours decreased in comparison to the same quarter in 2012. Hours were down 3.7 percent to an annualized 1,607 hours for Q1 2013, compared to 1,669 last year.

For an in-depth discussion of the Citi survey findings—including how they compare to Q1 2012 and geographic differences—read the full article here.

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Legal-Sector Job Gains Offset Early 2013 Losses

Posted on May 7, 2013 by | Leave a comment

Despite weakened demand in the first quarter, the number of legal-sector jobs increased over the last two months. According to the U.S. Bureau of Labor Statistics’ seasonally adjusted preliminary data, 2,100 jobs were added in April. That’s on top of an upward-revised 3,500 legal sector jobs the BLS says were added in March (preliminary data had that figure at just 2,000 jobs).

The gains offset a tough start to the year that saw a loss of 2,400 jobs in January and 500 in February. The total number of people employed in the legal industry is now 1.13 million, which is 5,100 higher than January and the highest number seen in April for four years—though it is still 50,000 lower than the legal-sector employed peak in May 2007, according to Am Law Daily.

Using BLS data for 2013, the total number of people employed in the legal sector by month is shown in the chart below.

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Q1 PMI: Drop in Demand, Rise in Worked Rates

Posted on May 1, 2013 by | 1 Comment

Demand was down, yet worked rates were up in the first quarter of 2013. These findings brought about a 6-point drop in the Thomson Reuters Peer Monitor Economic Index (PMI) to 50, marking the fifth decline in the past seven quarters.

The PMI reports that there was a 3.4 percent drop in overall demand and a 3.1 percent increase in worked rates. Productivity was also down, seeing a 4.6 percent drop. Direct and overhead expense rates were low at 1.8 percent and 2.8 percent, respectively—but were not low enough to offset the drop in demand.

By practice area demand, bankruptcy saw the largest decline at 9 percent. Litigation was down 3.7 percent, and IP litigation fell 6.8 percent. The PMI notes that the declines in litigation has the largest impact in the fall of overall demand, as the practice areas account for nearly 40 percent of total billings. The PMI also notes:

Demand patterns have become somewhat erratic in recent years. In 2011 and 2012, demand saw fairly sizeable jumps in the first quarter; they gradually trailed off as the year wore on. So, first quarter results do not necessarily presage how the rest of the year may go.

The declines by practice area are:

  • Labor and employment: -0.4 percent
  • Real estate: -1.8 percent
  • Litigation: -3.7 percent
  • Corporate (all): -4.4 percent
  • Tax: -5.9 percent
  • IP litigation: -6.8 percent
  • Bankruptcy: -9 percent

For PMI’s full report, which includes performance by market area and further analysis, download it at the Peer Monitor site or in the sidebar link to the right of this post.

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Modest Gains for Am Law 100, DLA Piper New No. 1

Posted on April 30, 2013 by | Leave a comment

The numbers are in—and this year we have a new No. 1 top-grossing law firm. With $2.4 billion in earnings, DLA Piper nudged out last year’s top-spot holder Baker & McKenzie, which came in second on the 2012 list with $2.3 billion in gross revenue. This is the first time DLA topped the list, becoming not only the top-earning firm but also the world’s largest with 4,036 lawyers.

The top 10 of the 2013Am Law 100 by revenue (with gross revenue and percent gain or loss in parentheses) are:

  1. DLA Piper ($2.4 billion, 8.6 percent)
  2. Baker & McKenzie ($2.3 billion, 2.1 percent)
  3. Latham ($2.2 billion, 3.4 percent)
  4. Skadden ($2.2 billion, 2.1 percent)
  5. Kirkland ($1.9 billion, 10.7 percent)
  6. Jones Day ($1.7 billion, 3.9 percent)
  7. Hogan Lovells ($1.6 billion, -1.9 percent)
  8. Sidley ($1.5 billion, 5.2 percent)
  9. White & Case ($1.4 billion, 3.9 percent)
  10. Gibson Dunn ($1.3 billion, 10.7 percent)

Gibson Dunn was the only newcomer to the top 10; last year it was ranked as No. 12. And only it and Kirkland had gains of more than 10 percent. Most firms had modest, single-digit gains over 2011 for gross revenue, revenue per lawyer, and profits per partners. Yet McKenna, which rose from No. 104 last year to 86, had a stunning 23.4 percent increase in gross revenue.

The five firms with the largest year-over-year gains are:

  1. McKenna ($3.5 million, 23.4 percent)
  2. Fragomen ($3.5 million, 19.7 percent)
  3. Bracewell ($3.3 million, 19.7 percent)
  4. Quinn Emanuel ($8.5 million, 17.8 percent)
  5. Ogletree ($3.2 million, 16.9 percent)

And the five with the largest percent loss are:

  1. Shook Hardy & Bacon ($3.2 million, -7.2 percent)
  2. Patton Boggs ($3.2 million, -6.5 percent)
  3. Fried Frank ($4.4 million, -6.3 percent)
  4. Hunton ($5.6 million, -5.6 percent)
  5. Kaye Scholer ($4 million, -4.8 percent)

Other highlights:

  • Three of the top 10 firms—DLA Piper, Baker & McKenzie, and Hogan Lovells—are structured as Swiss vereins.
  • Twenty firms had gross revenue of $1 billion or more this year, compared to 17 in 2011.
  • Only 76 firms reported gross revenue increases in 2011, compared to 80 this year.
  • Five firms were new to the list: Bracewell & Guiliani; Faegre Baker Daniels; Fragomen, Del Rey, Bernsen and Loewy; McKenna Long & Aldridge; and Ogletree, Deakins, Nash, Smoak & Stewart.

To read The American Lawyer’s full coverage and discussion of their results, click here. Or just go to their interactive chart here.

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UK Revenues Up For US-Based Firms

Posted on April 23, 2013 by | Leave a comment

U.K. revenues for the 2012 financial year were up for several U.S.-based firms, with many of the increases attributed to aggressive hiring. The annual revenue rankings by The Lawyer show that of the 30 top international earners with offices in London, all but seven increased their earnings over the previous year. Twenty-seven firms also made the list in 2012.

“This marks a turnaround in fortunes from 2009, when 21 of the top 30 firms saw year-on-year falls in U.K. fee income,” the article covering the findings states.

According to The Lawyer, the top-earning U.S. firms are:

  1. Baker & McKenzie ($199.1 million)
  2. White & Case ($199.1 million)
  3. Latham & Watkins ($197.5 million)

Three U.S. firms were new to the list this year:

  1. Quinn Emanuel Urquhart & Sullivan ($45.3 million)
  2. Arnold & Porter ($42.7 million)
  3. Ropes & Gray ($40 million)

The article attributes much of the firms’ revenue gains to “aggressive recruitment campaign[s].” In fact, the firms who had revenue growth also had large growth in headcount.

Dechert, which did not provide exact U.K. revenue figures, had a 44 percent jump in headcount in its London office. The Lawyer estimates that this increased total revenue from $81.6 million to $118 million for the Philadelphia-based firm.

Weil, which saw an 11 percent rise in its London office turnover with the addition of 10 attorneys, also had a 21.6 percent rise in revenue. And Kirkland & Ellis increased its revenue from $112 million to $122.8 million with a 10 percent increase in turnover.

Read the full article here.

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Norton Rose Tops Canadian Law Firm Brands

Posted on April 17, 2013 by | Leave a comment

It seems that attracting and maintaining clients is all in the name—or name recognition. Brand awareness means more business for your firm, or so says Acritas in this year’s Canadian brand index report.

The market research firm asked 245 general counsels at Canadian companies and 55 at international corporations doing business in Canada five questions that gauged which law firms they favor and turn to most for their high-value work. The firms were then scored on a 100-point scale where 100 is the most-mentioned firms, zero the least.

The winner? Norton Rose, which “disrupted a Canadian legal market long dominated by the so-called Seven Sister firms: Blakes, Cassels & Graydon; Davies Ward Phillips & Vineberg; Goodmans; McCarthy Tetrault; Osler, Hoskin & Harcourt; Stikeman Elliott; and Torys,” according to an Am Law Daily story covering the report. Norton Rose completed two mergers in the last couple years, creating a nearly 2,300-lawyer-strong firm.

Unfortunately, the Acritas research was done before the three-way combination that created Dentons was completed. It is therefore unknown what impact the firm will have upon the Canadian market.

“We’re all anxious to see if [that combination] is going to have as much of an impact as Norton Rose’s,” Elizabeth Duffy, vice president of Acritas US, said in the Am Law Daily story.

The five Canadian Law firms with the most-recognized brand, by rank, are:

  1. Norton Rose
  2. McCarthy Tetrault
  3. Blake Cassels
  4. Stikeman Elliot
  5. Fasken

For a full list, download a complimentary copy of the Acritas report here.

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In-House Priorities, Concerns for 2013

Posted on April 10, 2013 by | Leave a comment

What are the law department priorities for 2013? That’s the question ALM Legal Intelligence asked of 126 in-house attorneys. And according to their report, “Corporate Counsel: Agenda 2013,” the top items inside counsel want to improve include becoming more of a strategic partner with company leaders, not just legal counsel (46 percent), and creating a culture of compliance within their companies (34 percent).

Topping the list of issues that respondents expect to be of most concern in 2013 are: doing more with less (39 percent), law department performance (37 percent), supporting company growth (37 percent), managing outside counsel costs (33 percent) and unforeseen crises (31 percent). The biggest risks are expected to include a steep downturn in the U.S. economy (28 percent) and a change in business conditions (25 percent); only 10 percent are concerned about the so-called “fiscal cliff.”

Yet, despite these concerns, fewer respondents say that they are brought in too late to be effective (29 percent this year versus 54 percent in 2011). “In another positive marker, the number of GCs who said they’re viewed as business ‘road blocks’ dropped—from 29 percent in 2011 to 18 percent in 2012,” reports Corporate Counsel.

Another surprise finding was that 67 percent of respondents listed partner responsiveness as the most important quality. This was a full 40 percentage points above the number who said “hourly rate charged” was the top quality. And a full 66 percent expect litigation to be the top matter to be outsourced this year, followed by intellectual property at 38 percent.

You can see select results of the report here.

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