By and large, BigLaw should be proud of the way it has reacted to the near collapse of our financial system as we appear to be teeter tottering away from the brink at least for the time being. To be sure, while we are at long last witnessing deals trickle back in and real transactions that require our servicing, bankruptcy and restructuring practices remain our life preservers. But once sacrosanct principles like no publicly disclosed layoffs have been left behind in the rubble along with associate salary and bonus wars. Also, alternative fee arrangements to the billable hour are becoming commonplace; skepticism of our financial sector clients and avoidance of the toxicity that has come to define it appears enhanced; partner level lateral market due diligence is virtually destigmatized; and practice area as well as personnel diversity and work-life balance and more humane work environments for all our attorneys and staff have emerged as the new holy grails. In short, our major law firms are now leaner, meaner, healthier and more competitive.
We may be a millenium from the day that BigLaw is healthy enough to enable its attorneys to train sufficiently for a spot in the real Tour de France. But we certainly took a spin in the right direction when three members of Hogan & Hartson, namely Warren Gorrell, 55 (Hogan’s chairman), Stephen Immelt, 57 (partner in Hogan’s Baltimore office) and Dennis Tracey, 53 (managing partner of Hogan’s U.S. offices) hammered unofficially but with ample BigLaw fanfare through one particularly beautiful stage of the celebrated bike race, culminating atop a pristine peak amidst the Alps.
After almost a decade of continuous ascent in the categories of revenue, profits, salaries and bonuses since the last deep doldrums we experienced following the collapse of the dot-com bubble, BigLaw’s current plunge from the stratosphere feels to most of our players to be more perilous than ever. The prevailing sense of fear was exemplified this week by the venerable Stroock & Stroock & Lavan in announcing that as part of its keep-the-boat-afloat strategy, it is offering its incoming associate class a $75,000 payout to any rookie who elects not to jump on board, eclipsing the significance of Skadden’s historic offer earlier this year to pay associates at a rate of 33 percent of base to take a premature sabbatical.
In the midst of these current turbulent market waters, a total of 2509 partners at AmLaw 100 and 200 firms managed to successfully jump ship in 2008. The biggest winners were K&L Gates (185 partner acquisitions), Reed Smith (74), DLA Piper (58), Jones Day (57) and Alston & Bird (53), while the biggest losers were Akin Gump (59 partner defections), Heller Ehrman (47 pre-dissolution), Thelen (46 pre-dissolution), Mayer Brown (45), and, K&L Gates (again) (40).
While our economy crumbles, the American public observes like lemmings as the Wall Street criminals who executed the greatest financial fraud in history add insult to our collective injury by continuing to openly steal billions. Only now, instead of conning the world into believing that their excrement is some sort of sophisticated securities derivative too complex for non-Streeters to comprehend, they are referring to their cash grab as “bonuses.” Relatively insignificant sociopaths like Bernie Madoff can only aspire to sit at the desks of these miscreants whose greed may still prove monumental enough to bring us all to ruin. We at Hanover Legal are certainly not the first to ask whether and when members of our legal community should have recognized and tried to put a stop to the epic Wall Street slight of hand. However, we viewed our function as limited to servicing the financiers to whatever extent we were paid to do so, and as long as Moody’s and S&P were signing off on these transactions with their highest ratings, who were we to raise an eyebrow?