Charles & Mary Beard wrote in the 1930s about the US Constitution having been crafted within the background of economics (see their marvelous work, Economic Interpretation of the U.S. Constitution). So, too, one can look at Mayer Brown’s recent actions in light of economics of a law practice. In fact, if one doesn’t look at the larger economic picture, there would be a gaping hole in the analysis! (more…)
This week, we’ve seen much discussion about the Mayer Brown "layoffs" of 10% of their partners. I have always maintained that law firms mirror their clients. Was Mayer Brown doing any different?
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Larry Bodine quotes Patrick Lamb about Mayer Brown, "PPP is a joke. And what’s more of a joke, lawyers either are so stupid that they can’t see behind the manipulation or they know how meaningless the statistic is, in which case law firm managers are fools for running their firms based on a bogey everyone knows is so malleable. Seriously, senior firm managers really have to ask themselves, if a prospective partner is attracted to them because of their PPP and doesn’t know how the firm’s "stock price" is so easily manipulated, do they really want such a fool as a partner?" (more…)
Mayer Brown unloaded 45 partners! 10% of their partners! Why? According to an internal memo published by Wall Street Journal, the reason was to increase their profits per partner, a standard they say is important in competition for laterals and law school grads.
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Conflicts can be created when traditionally transaction – commercial litigation law firms, paid by the hour, enter into the contingency fee arena. The Wall Street Journal, in its March 7th edition, delineates several of these, and more are discussed below. (more…)
Adam Smith has a nice piece on the recent associate salary increases to $160,000. It’s hard, however, to feel sympathetic to law firms where the disparity between partners and associates continues to increase. Of course, law firms merely reflect their corporate clients where the CEO compensation (sometimes at hundreds of millions of dollars) is far greater than the rank-and-file compensation than at any other time in our history.
Will clients change their purchasing habits. If history is a teacher, the answer will be "not significantly."
Ultimately, who pays for these increases? Us. Consumers. That’s why they call it inflation.
A recent survey of small business owners by SurePayroll has produced some interesting results concerning business relationships with banks:
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One large law firm after another is falling prey to the new, higher level of associate salaries, $160,000! My, oh my! Where will this madness stop?
Larry Bodine has an interesting take on this phenomenon, saying that the marketing opportunities for the smaller, regional firm are now greater than ever.
Bruce MacEwen has a different perspective, suggesting that we’re asking the wrong question and looking at the wrong issue when we focus on the first year’s associates’ salary increase.
Tom Collins discusses an important issue concerning law firm creditworthinesss, law firm culture.
Citing a CitiBank report, culture of a law firm is an important consideration in granting credit. This is consitent with one of the 4 C’s cited in our latest Special Report, The Successful Lawyer-Banker Relationship.
Tom also discusses the reason for partner defection. He suggests that it is not over money, but rather over the lack of law firm planning and business direction. An interesting thought.
There has been recent discussion among some of the smaller law firms about reasonable (ABA standard) and unconscionable (California standard) fees. Unfortunately, this is a back-look standard where Monday-morning-quarterbacking reigns supreme.
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