Tag Archives: Lateral Link

DC Market Update: Strong Demand for Litigation, Transactional, and Regulatory Attorneys

After more than 200 years with New York as its only US office, Cravath announced in June that it will open in Washington, DC this fall. Given that Cravath has long resisted the Biglaw office expansion trend, its change in strategy is notable. Presiding Partner Faiza Saeed explained that the firm’s “clients face an increasingly complex and active regulatory environment.” Cravath’s move demonstrates an understanding that a strong DC presence is more valuable than ever — and not just for traditional regulatory counseling practices.

Cravath is not alone in reaching this conclusion. With increasing client demand in the face of an anticipated wave of enforcement actions, firms are recognizing the need to bolster their ranks in the nation’s capital, even if they aren’t new to the region. We at Lateral Link are working on numerous searches for firms opening or expanding their DC offices. Clients are acutely aware that DC is where the key regulatory decision-makers sit, and that local credibility in the unique DC market is essential.

The state of the lateral market

So what does this mean for the lateral market? In short, opportunity. We count more than 500 lateral moves in DC so far this year, and firms continue to hire at a strong pace. We have hundreds of openings for litigation, transactional, and regulatory attorneys.

Litigators are in the greatest demand, with thriving practices hiring at every level from associates to partners. Regulatory-related litigation groups — such as antitrust, white collar, and enforcement defense — are especially healthy. Firms are seeking talent in both the private and public sectors. Lateral candidates looking to switch firms are well-positioned, especially associates with two-to-five years’ experience and partners with at least $1 million in portable business. High-profile government officials are also coveted, as Cravath’s announcement illustrated: in tandem with the new office opening, Cravath hired three partners with high-level FDIC and SEC experience, including former FDIC Chairman Jelena McWilliams, former SEC Commissioner and Acting Chairman Elad Roisman, and former Associate Director of Enforcement for SEC Jennifer Leete.

On the corporate side, hiring has retreated somewhat from last year’s blistering pace, but opportunities still abound. Private equity, M&A, capital markets, and securities associates will have a plethora of options to consider, with two-to-five years’ experience again being the sweet spot. We are also filling a number of EC/VC and finance openings. For many candidates, DC might not immediately spring to mind as a top transactional hub, but this market has some real advantages for corporate associates. DC corporate teams tend to be smaller than in New York, and associates have the latitude to work across a wider variety of deals. Associates seeking a more generalist practice, plus expanded opportunities for client contact at an early stage, might want to consider a move to DC.

Naturally, much of the regulatory-related work in DC is tied to litigation and investigations. However, we also have active searches with many of the more traditional regulatory counseling practices. Banking, healthcare, energy, environment, and healthcare practices among others are seeking new talent at both junior and senior levels.

Is recession a concern?

Whether and when the economy might enter a recession is a matter of intense debate, and I’m not here to make macroeconomic predictions. But it’s worth addressing the recession scenario, as it will certainly be on some candidates’ minds. First, DC offices have continued to hire in the face of growing recession talk — if there is going to be a recession-induced hiring slowdown, it hasn’t happened yet. Second, DC law firms historically have been relatively resilient in recession periods.

Because the federal government continues, recession or not, government-related legal work continues. DC firms tend to have relatively diversified practices, which is also helpful: litigation, regulatory, and corporate practices each comprise material revenue streams for the larger DC firms. Few DC offices are excessively dependent on transactional work, the area that often takes the biggest hit in a recession. Historically, DC firms tend to be better positioned to weather economic storms than many of their peers in other markets.

A remarkable range of opportunities

The appeal of DC for a practice like antitrust needs no explanation. But it’s important to realize that the vibrant legal market here encompasses a remarkably broad range of practice areas, even some that are not tightly connected to the federal government. What is particularly striking about the current moment is that firms are hiring in virtually every practice area. At Lateral Link, we have worked with many attorneys to leverage the strong market demand to achieve their goals, whether that entails ascending the ladder to a more highly regarded firm, increasing their compensation, or both. If you are based in DC (or are open to moving here) and you are interested in taking your practice to the next level, please contact me to learn more.

Planning for a Legal Career Overseas: An Update for 2022

Last Thursday alone, I heard from two attorneys looking to move overseas because they don’t want their children to have to participate in “active shooter” drills in school. It seems like an appropriate time to offer an update on the legal hiring landscape for U.S. JDs looking to move overseas.

In 2014, I posted a 3-part series on Planning for a Legal Career Overseas: 

I encourage you to read these posts as my general guidelines still hold true today. But we have seen some small shifts in the hiring landscape in recent years. What has changed? I have structured this update based on the most common questions I’m asked: 

What if I’m not a capital markets lawyer?

While the roles for U.S. JDs overseas are still overwhelmingly for capital markets transactional work, the demand for capital markets attorneys has evolved. We are seeing fewer roles that require high yield debt experience specifically and fewer capital markets opportunities in Europe outside of London. In Madrid, for example, it may be difficult to justify bringing on a full-time U.S. associate. The good news is that I am seeing more opportunities outside the usual capital markets roles, especially in London. For example, I’m working with top international firms: 

  • in London looking for junior to mid-level U.S. patent litigators
  • in London, Paris, Sydney, and Melbourne looking for mid-level U.S. project finance lawyers
  • in London looking for U.S. technology transactions lawyers
  • in Sydney and Melbourne looking for mid-level U.S. M&A lawyers
  • in London looking for junior to mid-level U.S. private funds and PE M&A lawyers
  • in Singapore and Hong Kong, looking for mid-to-senior level US PE funds associate roles. In Hong Kong, looking for mid-level life sciences corporate transactions associates.

Can I work overseas for a U.S. office as a remote attorney?

Probably not. Most firms that advertise “remote” roles are not able to accommodate remote from outside the U.S., or oftentimes even remote from certain U.S. jurisdictions where they do not currently have operations and/or where you are not barred. There are some exceptions. In particular, I am working with a corporate law boutique that is open to remote work from overseas for the right senior associate/counsel-level attorney. 

It is worth noting also that many offices in Europe, in particular, went back to in-office work long ago. Remote work is not as much in the culture of these offices, and they may not be as flexible with remote or hybrid work as U.S. offices have become. 

What are signing bonuses looking like for overseas roles?

Unfortunately, the overseas markets will not generally offer signing bonuses. In fact, for many overseas opportunities, you will need to go on the local pay scale. This is true most often for non-capital markets roles. Many firms will, however, pay for your relocation.

Can I go in-house overseas?

These opportunities exist, but they are very difficult to land. Most U.S. lawyers I know who are working overseas were either transferred overseas internally or were already working with a firm in that foreign city before moving in-house. Keep in mind also that in-house roles overseas will often pay at the local pay scale.

I’m a U.S. JD working overseas and looking to move home to the U.S. Is now a good time to move?

Absolutely! There are many reasons why now is the right time: 

  • Interviews are still generally over Zoom so being overseas is not as much of a disadvantage as in the past.
  • The market in the U.S., especially for mid-level to senior corporate associates, is still very busy but slowing down, so it could be risky to wait.
  • The more senior you get, the more difficult it will be to move back.

I am not a U.S. JD but I hear the U.S. market is busy. What are my options for moving to the U.S.?

Unfortunately,  opportunities for non-JDs are still rare, even for those with U.S. LLMs and bar admission. The exception may be if you are a corporate lawyer and already have a U.S. passport or green card, or are from Canada, Mexico, Australia, or another country not subject to the H-1B lottery system.

***

While we have seen some small shifts in the opportunities for U.S. JDs looking to work overseas, we are not seeing as dramatic a shift as we are seeing in the U.S. market. Your options for working overseas depend on your specific skills and experience. If you are a U.S. JD looking to move overseas, please contact me for an informational chat. If you’re a U.S. JD candidate planning ahead, good for you! I’d love to chat. If you’re a U.S. JD currently working overseas and planning for a move back to the U.S., now is the time to start the process. Please reach out! I can be reached at .  

Lawyers’ Mental Health Remains In Crisis, But Awareness Is Growing

It’s hardly news to say that the collective mental health of the legal profession is under severe strain. The results of the recent ALM Intelligence 2022 Mental Health and Substance Abuse Survey confirm what has long been true: the situation remains grave.

On the other hand, there is some indication, both in the annual ALM survey data and elsewhere, that law firms are taking mental health concerns more seriously than in the past.

The 2022 ALM survey was administered to more than 3400 respondents working at law firms of all sizes. The survey pool was global, but 79% of respondents were based in the United States. Respondents were 52% female and 48% male, with less than 1% identifying as transgender or other gender. 85% of respondents were White (non-Hispanic), 5% Hispanic or Latino, 4% Asian, 3% Black, and 3% Other/Multiracial.

Broadly experienced negative mental health impact

The proportion of respondents who agree that mental health problems and substance abuse are at a “crisis level” in the legal industry has grown each year since 2019, reaching 44% in the most recent survey. On the question of whether mental health problems and substance abuse are worse in the legal industry than in other industries, 55% of respondents said yes, 36% don’t know, and only 9% said no.

35% of respondents said they personally feel depressed, and two-thirds reported having anxiety. Three-quarters reported that the profession has had a negative effect on their mental health over time. 64% reported that their personal relationships have suffered as a result of being a member of the legal profession. 19% answered yes to the question: “In your professional legal career, have you contemplated suicide?”

When asked to select factors that negatively impact their mental well-being, 72% of respondents selected “always on call/can’t disconnect,” 59% selected “billable hour pressures,” 57% pointed to “client demands,” and 55% selected “lack of sleep.”

Rising awareness of the problem

Even though the overall data are undeniably bleak, the survey does include some indications of progress. The proportion of respondents who agreed that their “workplace is a safe environment to raise concerns about mental health and substance abuse” has risen from 40% in 2019 to 45% in 2022. Still far too low, but at least moving in the right direction. The survey also indicates that more firms are taking tangible action to provide more comprehensive mental health support: in 2022, 61% of attorney respondents reported that their firm offered an Employee Assistance Program including assistance for mental health or substance abuse, up from 54% in 2019.

In addition, the survey suggests that COVID-related mental health pressures are starting to improve. 61% of respondents reported that the COVID pandemic had made their mental health worse, but this was down from 70% in 2021.

Mental health and return to office

Although some aspects of the survey might seem like “more of the same,” the section on Remote Work Environment is particularly timely, given that the profession remains in a tug of war over a return to the office. In a set of questions introduced for the first time in this survey, ALM asked respondents about the effect of “hybrid or remote work environments” on various elements of their professional and personal lives. The results are less than conclusive.

There was something approaching consensus on a few points. For example, 76% of respondents reported that remote work had decreased the quality of interpersonal relationships with colleagues and 62% said it had increased the quality of home-based personal relationships. 59% reported that remote work had increased their quality of life.

But the reported mental health effects were much less clear. 38% of respondents stated that remote work increased mental health, whereas 35% said it decreased mental health, and 27% reported no impact. On the question of whether hybrid or remote working environments increase or decrease the likelihood of professional burnout, 25% said increase, 33% said decrease, 25% answered “stay the same,” and 17% didn’t know.

Unfortunately, the published survey includes no breakdown of how these responses intersect with demographics, which is perhaps a missed opportunity.

For those who found that remote work flexibility relieved stress levels, the prospect of being forced to return to old ways of working inspires real anxiety. It will be interesting to observe over the coming months and years how the widespread desire of firm leadership to encourage (or enforce) return to office will interact with increased awareness of a responsibility to address mental health challenges.

California Market Update: Plentiful Office Openings, Strong Associate Demand

In the midst of the pandemic-fuelled narrative about an exodus from California, a funny thing happened: several Biglaw firms took the opportunity to enter the California market for the first time. Demand for associate and counsel hires was red hot in 2021 and remains strong now, with both the new entrants and hometown California firms hunting for lateral talent.

A wave of new entrants

Some California lawyers have of course taken the opportunity to relocate in the pandemic-induced reshuffling. Markets like Austin and Salt Lake City have grown impressively, attracting both major firms and California-trained attorneys. But in the same period, some big-name lawyers have moved into the Golden State as prominent firms aggressively expand their California offerings.

Debevoise & Plimpton offers an instructive case study. Before 2021, the firm had never had a west coast office, despite its many years of serving major California clients. So Debevoise attracted attention when it announced last year that it was relocating 14 attorneys to San Francisco, including M&A co-chair Michael Diz and IP litigation chair David Bernstein. The firm has since bolstered its Northern California ranks with locally-hired partners such as former Skadden IP litigation co-chair Jay Neukom and longtime SEC lawyer Kristin Snyder.

Debevoise has plenty of company sensing opportunities in California. Fellow New York firm Paul, Weiss joined Debevoise in San Francisco, while Cleary Gottlieb set up shop in both San Francisco and Silicon Valley. Two Magic Circle firms arrived in the Bay Area, with Freshfields opening a Silicon Valley office and Allen & Overy setting up three California locations in the space of a year: Los Angeles, San Francisco, and Silicon Valley. Firms with some existing California presence also decided to expand in 2021. After just over a decade of operating in Los Angeles, Jenner & Block opened in San Francisco. Willkie expanded to Los Angeles, building on its existing San Francisco and Silicon Valley offices.

It remains to be seen how these new outposts will fare over the longer term. But one advantage of moving into the Bay Area in 2021 was relatively attractive pricing on commercial real estate, in the midst of uncertainty over the future office space needs of the region’s tech companies. That may give the new entrants some cushion as they continue to build their California client bases.

Continued lateral hiring opportunities

So what does all this mean for associate and counsel lateral hiring? On the whole, the California market remains healthy across the board. Granted, the market has calmed a bit from the unprecedented frenzy of 2021, but there are still numerous opportunities across multiple practice areas.

Geographically, demand is fairly balanced between the Bay Area and Southern California.  Specifically, there are currently around 900 associate and counsel openings in each of those regions. (For comparison, there are around 1,100 in New York.)

Demand for corporate associates is no longer at the frenzied pace it was last year, but it remains steady. We have seen a steady increase in litigation and real estate openings in recent months. Across all practice areas, the greatest need is for midlevel as well as senior associates, with the sweet spot in the range of 2-5 years of experience.

Firms have this year taken the opportunity to rebuild their summer associate programs after two summers of scaled-down (and largely remote) programs. Many firms are hosting their largest summer classes ever, and almost all are having in-person summer associate programs.

The return to in-person summer programs is consistent with a broader move towards imposing some limits on remote work options. By national standards, California firms generally have relatively flexible remote work policies. For example, Cooley recently announced that it would not require attorneys to return to the office even though the firm’s offices have fully reopened as of the beginning of June. However, firms have generally declined to follow Quinn Emmanuel’s lead in allowing associates full remote flexibility—working anywhere in the country for as long as they would like. Nonetheless, firms recognize that five days in the office is not a viable demand in the current healthy lateral market.

A good time to consider a move to California

Nobody can predict the economy’s future direction with certainty, but by historical standards, it’s still an excellent time to pursue a lateral move to California. As the recent entry of so many firms illustrates, the growth of other markets has not materially damaged California’s appeal as a place to build a cutting-edge legal practice.  If you are interested in learning more about the California legal market, please do not hesitate to contact me or one of my California colleagues.

The 2022 Milton Handler Lecture: Refocusing Antitrust Enforcement On Competition

Assistant Attorney General Jonathan Kanter last week delivered highly anticipated remarks in person at the New York City Bar Association, where he was the keynote speaker of the 2022 Milton Handler Lecture. The head of the Antitrust Division of the Department of Justice, Mr. Kanter has been widely expected to take a vigorous enforcement approach. His May 18 speech was an opportunity to signal more explicitly what that might look like. And although he avoided any comment on specific fact patterns, his remarks made clear that busy times are ahead for the antitrust bar. 

Under Mr. Kanter’s leadership the touchstone of civil antitrust enforcement will be “protecting competition.” This marks an intentional departure from the “consumer welfare standard” that has predominated since the 1980s. In Mr. Kanter’s view, “consumer welfare is a catchphrase, not a standard.” It “systematically biases antitrust toward underenforcement” by neglecting to acknowledge the breadth of objectives that the Sherman and Clayton Acts were originally intended to pursue. “Senator Sherman himself expressed a goal of protecting not only consumers, but also sellers of necessary inputs, such as farmers.” Mr. Kanter noted that the Supreme Court endorsed this broad conception in the 1958 Northern Pacific case, when it described the Sherman Act as a “comprehensive charter of economic liberty.”

Mr. Kanter argued that in addition to unjustifiably narrowing the scope of antitrust enforcement, the consumer welfare standard is unintuitive and cumbersome to administer. “It cannot be that a business trying to understand the legality of its merger must undertake months of analysis to produce a complex simulation model, or that a court must decide an antitrust case by deciding among dueling consultants’ white papers reporting on simulations.”

Rather, Mr. Kanter believes we must “get back to first principles and focus on the policies that Congress was trying to advance in passing the antitrust laws.” Assessment of the competitive effects of a merger should include “real-world evidence, economics, expertise, and common sense.” As Mr. Kanter put it, if “somebody tells you that the NL East looks competitive this year, you understand what they mean.”

Mr. Kanter took the opportunity to put companies on notice that his team “will remain vigilant and undeterred,” noting that the Department has already sought to block anticompetitive deals in the airline and healthcare sectors. “Companies that test our resolve in these and other areas do so at their own risk and will continue to confront aggressive antitrust enforcement. As one of my predecessors explained, some deals should never leave the boardroom.”

The event marked the latest installment of a distinguished antitrust lecture series that dates back nearly half a century, and it was the first Handler Lecture since the pandemic. Craig Brown, CEO of Bridgeline Solutions (sister company of Lateral Link) and Co-Chair of the NYC Bar’s Handler Lecture Subcommittee identified Mr. Kanter as a potential speaker and met with him to explain the Handler Lecture’s storied history. Mr. Kanter graciously agreed to participate. Craig’s connection to Milton Handler goes back decades, to when Craig was an antitrust & litigation associate with Kaye Scholer and Professor Handler was still a practicing named partner of the firm (Kaye Scholer Fierman Hays & Handler).

Craig joined hosts Zach Sandberg and David Lat on this week’s episode of Movers, Shakers & Rainmakers. They discussed Mr. Kanter’s remarks, as well as Craig’s trajectory from antitrust lawyer to Bridgeline Solutions CEO. Continuing the antitrust theme, the hosts also talked about Covington & Burling’s hiring this week of partner Ryan Quillian, formerly the Deputy Assistant Director of the Technology Enforcement Division at the Federal Trade Commission.

How To Work Effectively With A Legal Recruiter

Let’s be honest: lawyers like to complain about legal recruiters. And hey, I get it! Sometimes lateral candidates have bad recruiter experiences, through no fault of their own. But without excusing the unprofessional behavior that some recruiters engage in, it’s important to recognize that the candidate/recruiter relationship is a two-way street. It’s highly advisable to treat your recruiter considerately and professionally — not only is this the right thing to do, but it also maximizes your recruiter’s ability to effectively advocate for you.

To some extent, this is basic common sense (or should be)!  But to be fair, the lateral market can be stressful, and sometimes candidates may not be fully cognizant of the effects of their actions. So it’s worth laying out a few best practices that you should follow if you decide to work with a recruiter.

Be open and honest. This is the foundation for a productive, trust-based relationship with your recruiter. Some of the conversation will cover very standard terrain. How would you describe your experience and skill set? What are your short- and long-term career goals? What are your compensation expectations? Other aspects may be more awkward to discuss. Have you ever been fired? Have you recently worked with another recruiter? Have you applied to certain firms in the past? This is all important context for your recruiter to have. Remember: you and your recruiter are on the same team. The more you tell us, the more effectively we can frame your candidacy.

Communicate often. Part of being open and honest is being communicative when circumstances change. Have you adjusted your goals? Did your current work or compensation situation change recently? That’s fine, but you need to tell us. It isn’t helpful to have a recruiter pitching you to firms based on outdated information.

Be loyal. If you are targeting law firm roles, only work with one recruiter at a time. At the outset, it’s advisable to speak to a few recruiters to get a sense of which one feels like the best fit. But once you find a recruiter you feel you can trust, stick with that person. Law firms very rarely offer recruiters exclusive roles, so working with multiple recruiters is of no practical benefit (and in fact, can complicate your job search). Note that in-house roles are a different story. These are often filled through exclusive recruiter arrangements, so if you are going in-house it’s fine to work with more than one recruiter to gain access to a wider range of roles.

Be considerate and respectful. Be aware that recruiters only get paid if we place you with a new employer. When we invest time to help you with resume revisions or provide extensive interview coaching and career counseling, we do so with the expectation that you’re serious about working with us. If you aren’t certain you want to work with a particular recruiter, it’s extremely inconsiderate to mislead that person and take advantage of their services. Most especially, please understand that it’s highly unethical to learn about an opportunity from a recruiter and then go behind our back by submitting an application directly or through a friend who works at the firm. Don’t be that person.

Be responsive and committed. We get it, you are busy and working long hours. Many of us are. But you need to help us help you. Respond to our emails and phone calls, even if it’s just to let us know you’re tied up and will follow up with a response at a later time. If you agree to an interview, follow through on that commitment by showing up on time. If you promise to send a recruiter your resume by a certain date, either keep your promise or give a heads up that you’ll need a few more days. Don’t ghost a recruiter after you’ve agreed to work with us or after we’ve helped you. If you change your mind, that’s okay, it happens. But do your recruiter the courtesy of letting us know. It only takes a second to respond to an email.  

Be professional. This last one is a bit of a catch-all, and the importance of it cannot be overstated enough. It applies not just to your dealings with recruiters, but to everyone you interact with in the lateral hiring process. Keep in mind that the legal industry is relatively small, and your reputation will follow you. The bridges you build (or burn) while in the recruiting process may affect your career years from now in unexpected ways. Make sure you leave a positive and professional impression. At some point in the future, you’ll be happy you did.

The Cost of Law Firm Associate Turnover

A client recently asked me an interesting question. 

“How much should we counteroffer an associate who has given notice?”

Many factors may play into that calculation. Some are specific to the particular associate. For example, how good is this associate’s work product? Other considerations are broader. Assume the firm makes a strong counteroffer for this associate. Will that set a precedent that encourages other associates to go out and get offers from rival firms?

But the core factor should be how much money the firm will lose if the associate leaves. Losses from lost billable hours, investments in the associate, and potentially turning away work. Add in the lost time spent recruiting and hiring on their own and a firm will face a larger cost than expected.

Lost billable hours loom largest

The most significant cost to a firm when an associate departs is lost billable hours. First are the hours lost from the departing associate. Practice groups run both lean and at full (if not above) capacity. And rarely do remaining associates have capacity to pick up hours without sacrifice. The result is a mixture of revenue loss and unhappy burned out associates.

Second are the less obvious loss of billable hours spent replacing the associate. Hours of billable time recruiting and interviewing candidates by partners and associates alike. Reviewing resumes. Conducting interviews. Taking candidates to lunch. Assessing conflicts checks. Training the replacement associate. The list never ends. Hours lost that could otherwise have brought in a new client or billed a current one.

How much does an associate departure cost?

The answer to this question depends on the seniority of the associate and how busy the group is at the time. Losing a key senior associate working a full plate that can’t easily transfer is the worst-case scenario. Losing a junior associate with spare hours will not be as costly.

A 2017 NALP Update on Associate Attrition pegged the cost of replacing an associate between $200,000 and $500,000. That may sound like a lot but a back-of-the-envelope calculation shows that it doesn’t take much to reach $200,000.

Let’s assume that on an annualized basis the firm is collecting on 1600 of the associate’s billed hours, at an average rate of $750/hour. That generates annualized incremental gross revenue of $1.2 million. Also assume the associate’s compensation and benefits cost the firm a total of $400,000. If none of the associate’s hours transfer to others and the position was vacant for a year, the firm would lose $800,000. It only takes three months to hit $200,000 in lost profits. Next add lost revenue from partners and associates hiring instead of billing. Plus a potential signing bonus in a tight hiring market for certain practices. The NALP range not only becomes plausible, but likely.

Mitigating lost revenue

So, how much to counter offer? The answer is variable, but a strict cost benefit analysis shows it can be a lot. But what about the hidden downstream cost? Will an effective counteroffer incentivize other associates to seek out their own counteroffers? Will the associate leave in a year anyways? If the answer is not an emphatic ‘no’ it may actually be more cost effective to replace them. That’s where a firm working with a trusted recruiter can bring the cost down substantially. A firm may take four months or more to replace an associate—let alone bring the new hire up to speed. If a recruiter has the trust and backing of the firm, and fills the vacancy in two months, that’s a great deal for the firm. Increasing fees offered to recruiters reflects this basic economic calculus. Associate turnover is a part of life at law firms. A knee jerk decision to throw money at a departing associate may be the wrong move. Instead, firms should carefully and rationally weigh their options to determine the least costly path forward.

Female Representation in Biglaw Partnerships — A Long Way to Go

Disproportionate attrition of female attorneys in Biglaw is hardly a new problem. As a 2019 ABA and ALM report on the issue noted, “entering associate classes have been comprised of approximately 45% women for several decades.” Indeed, at 5 of the top 20 Am Law firms (by gross revenue), female lawyers now constitute a majority of associates:

Firm% of Female Associates
Baker McKenzie53.4%
Norton Rose Fulbright53.0%
Morgan Lewis50.8%
Hogan Lovells50.1%
Jones Day50.1%

But when it comes to partnerships, representation of women is substantially lower. Among those top 20 Am Law firms, here are the four with the greatest proportion of female partners:

Firm% of Female Partners
Ropes & Gray31.8%
Morgan Lewis28.8%
Baker McKenzie27.9%
Jones Day27.3%

Ropes & Gray is the standout performer, as the only top 20 firm with greater than 30% female representation in its partnership. Interestingly, unlike the other firms in this table, Ropes & Gray does not rank especially highly for female associate representation: only 44.8% of the firm’s associates are women.

And here are the four with the lowest female representation in the partnership:

Firm% of Female Partners
Gibson Dunn20.9%
White & Case20.8%
Simpson Thacher20.2%
Davis Polk17.9%

Gibson Dunn is an interesting case in that the firm last year elected its first-ever female Chair, Barbara Becker. Gibson Dunn’s announcement of the appointment emphasized diversity and inclusion, noting that Ms. Becker created the firmwide Diversity Committee. It will be interesting to see if Ms. Becker succeeds in boosting the firm’s female partner representation above the current below-average level.

Any way you cut it, Biglaw certainly has a long way to go. Should that be cause for despair? Not necessarily. The good news is that firms are well aware of the problem and at least some of them are making a strong push to fix it, even if progress is slower than we would wish.

How to increase female representation — and retain female partners

There are a number of ways that law firms are pushing to increase female representation in their partnerships. Flexibility is a key theme. Many female Biglaw attorneys are working mothers with other schedules to meet outside of work. A one-size-fits-all approach to hours expectations (including office presence, billable hours, and business development targets) can disproportionately drive away women. We speak to many high-powered female attorneys who feel compelled to leave the law firm grind because they also want to raise a family, and they have concluded that it is impossible to succeed at both. When law firms incorporate more women- and family-friendly policies firmwide (not just for partners!) it paves the way for female associates to first rise to the equity partnership and then succeed there — both inside and outside the office.

Increasing female representation in partnerships is not enough. Law firms must also offer a solid support structure so as to not leave women high and dry once they attain equity status. Providing adequate and equitable associate and administrative support goes a long way in retaining female partners and promoting their longevity. In addition, establishing vibrant Women’s Initiatives with strong leadership and defined budgets is one way to support female partnership (and all female attorneys).  And don’t forget the men — they need to be involved!  Male participation in Women’s Initiatives is crucial in demonstrating that the entire firm stands behind a diverse partnership and supports female advancement.  

Pitfalls to keep in mind

Law firms should be careful not to simply promote women to non-equity partner status and assume that’s good enough. Not all partnership roles are created equal. These days, so many firms have deviated from the one-tier structure of partnership, such that non-equity partnership often amounts to what used to be called Counsel. When there are several tiers of partnership, it creates additional obstacles to attaining the ultimate goal of equity.

Law firm leadership should also be aware that non-billable requirements often disproportionately take women away from billable work as compared to their male counterparts. For example, for some reason female attorneys are especially likely to participate on committees. Women’s Initiatives and other firm programs are important, but they present a Catch-22 that must be acknowledged and monitored. Firms should be careful not to unfairly assign a disproportionate amount of non-billable tasks to female partners or just assume they will take on an extra load. This is something we often hear our female candidates complain about, and it is an easy fix once the problem has been identified. But firm leadership must first be cognizant of the pattern.

A Detailed Breakdown Of The 2022 Am Law 100 Rankings

So how did Biglaw do in 2021, coming off its shockingly strong performance in 2020? In short: better. A lot better. Based on the financial metrics reported this week in the latest edition of the Am Law 100, the recent round of Biglaw salary increases makes perfect sense. Sure, most firms achieved record gross revenue, revenue per lawyer, and profits per equity partner. But that’s true in a typical good year. What made 2021 such a blowout is that many firms dramatically accelerated their growth rates on those metrics as compared to 2020 — a year that was itself hailed as a stunning success. Any way you look at it, 2021 was truly a year to remember for the Biglaw elite.

Collectively, here’s what the Am Law 100 achieved in 2021 (as noted by Patrick Smith in his summary of the data):

  • Total revenue: $127.4 billion, up by 14.8%. 
  • Average revenue per lawyer: $1.18 million, up by 12.5%.
  • Profits per equity partner: $2.66 million, up by 19.4%.

To appreciate just how good those growth rates are, let’s compare them to the strong growth of 2020 and the more typical rates in 2019:

Part of the impressive profit growth can be explained by attorneys working harder. Based on data from the 61 firms that submitted billing figures to the American Lawyer, hours billed rose 5.7% relative to 2020. Meanwhile, headcount in the Am Law 100 was up just 2.1%. As we at Lateral Link can attest, firms were eager to add talent in 2021, but growing the ranks was a challenge in the face of intense competition.

Let’s now take a closer look at the three key metrics — gross revenue, revenue per lawyer, and profits per partner — and the top 10 firms in each category.

Gross Revenue

Here are the top 10 firms in the 2022 Am Law 100 rankings, ranked by their gross revenue in 2021. You can access the full list here.

Kirkland & Ellis and Latham & Watkins once again led the pack, not only maintaining their #1 and #2 slots but also increasing revenue at faster rates than the other top 10 firms. The composition of the top group was fairly stable, with Ropes & Gray riding a 22% growth rate into the top 10 and Jones Day falling out of it, despite increasing revenue by 10%.

Revenue growth was strong across the board, with every Am Law 100 firm enjoying an increase (as compared to 26 firms that suffered revenue declines in 2020). Remarkably, 63 firms increased revenue by at least 10% and 18 were up by at least 20%.

Revenue Per Lawyer

Here are the top 10 firms in the 2022 Am Law 100 rankings based on revenue per lawyer. You can access the full list here.

Seven of the top ten firms increased revenue per lawyer by double digits (as compared to four in 2020). Once again, Wachtell and Sullivan & Cromwell took the top two spots. Davis Polk cooled somewhat after its market-leading 22% RPL growth in 2020. Cravath impressed with its rise from from #10 to #3 (mirroring the jump that Davis Polk achieved in 2020). Quinn Emanuel and Paul, Weiss ascended into the top 10, displacing Cahill Gordon and Debevoise.

Profits Per Equity Partner

And finally, everyone’s favorite ranking: the top 10 firms by profits per equity partner. You can access the full list here.

As always, Wachtell tops the list, this year exceeding $8 million in PPEP for the first time. Kirkland and Davis Polk each cracked the $7 million mark. Sullivan & Cromwell leapfrogged Paul, Weiss and Simpson Thacher to claim the #4 slot. Broadly speaking, the top 10 was fairly stable: the only firm to drop out was Debevoise, which grew PPEP by 10% but was no match for Latham’s 26% growth.

Overall, 14 firms now have profits per equity partner above $5 million (compared to six in 2020). Consistent with the long-running “rich get richer” theme in Biglaw, PPEP growth was strongest at the top of the Am Law 100. Whereas the top quartile increased PPEP by 22.7%, the bottom quartile of the Am Law 100 managed only a 7.7% increase. Still, no matter where their firm stood in the rankings, most Am Law 100 partners would be hard pressed to complain about 2021.

Diversity in Biglaw: Same Old Rhetoric or Reason for Optimism?

Diversity and inclusion are top of mind for law firm marketing departments these days. For Biglaw firms, expressing a commitment to boosting diversity in the profession is expected. But when it comes to executing on that commitment, the results have been uneven.

How are firms doing on diversity?

In a recent episode of Movers, Shakers & Rainmakers, hosts Zach Sandberg and David Lat reviewed the landscape. Citing data from Leopard Solutions, David noted that in 2021, 17% of lawyers in top 200 firms were ethnically diverse, a percentage that was unchanged from 2020. However, at the partnership level the representation of minority lawyers grew from 10% to 11%. As David pointed out, that increase is significant in percentage terms, representing 10% year-over-year growth. But at the same time, it is still far from representative of the broader U.S. population.

Some firms are doing considerably better than most. The ALM Intelligence 2021 Diversity Scorecard lists White & Case as featuring 21.9% minority partners, making it the only AmLaw 50 partnership with greater than 20% ethnically diverse representation. On the other hand, some of the most prestigious and financially secure Biglaw firms are notable laggards: minority representation in the Wachtell and Sullivan & Cromwell partnerships stands at 8.9% and 9%, respectively.

Is there reason for optimism?

As we discussed on the podcast, it’s easy to be cynical about calls for increased diversity in the legal profession. Every year discussion of the problem grows more prominent, but the rate of actual change has been glacial. Nevertheless, we point to the Mansfield Rule as one cause for optimism. Modeled after the National Football League’s Rooney Rule, which requires teams to interview diverse candidates as part of the head coach hiring process, the Mansfield Rule “measures whether law firms have affirmatively considered at least 30 percent women, lawyers of color, LGBTQ+ lawyers, and lawyers with disabilities for leadership and governance roles, equity partner promotions, formal client pitch opportunities, and senior lateral positions.” Firms that commit to that standard can become Mansfield Certified.

As David noted, an advantage of the Mansfield approach is that it ensures diverse candidates gain interview opportunities without establishing a quota for hiring decisions. That should make it palatable even to some firm leaders who may be skeptical of more aggressive campaigns to increase diversity. Indeed, the number of participating major law firms has grown to exceed 100.

Even so, it is notable how many top firms have not yet chosen to participate. Let’s take Gibson Dunn as a case study. The firm’s diversity performance is mediocre — not the worst in its peer group, but not exactly cause for celebration. Gibson’s partnership features 12.1% minority representation (as reported in the 2021 Diversity Scorecard). For comparison, fellow California-headquartered firm Wilson Sonsini is at 19.2%. Interestingly, Wilson Sonsini is Mansfield Certified, whereas Gibson is not.

Who should take responsibility for increasing diversity?

On another recent Movers, Shakers & Rainmakers episode, guest Monique Burt Williams, CEO of Cadence Counsel, addressed the growing number of law firms and companies hiring Chief Diversity Officers. Creating a position exclusively focused on diversity and inclusion can be an important positive step, but it carries risk that senior management will delegate the whole problem to the new hire. As Monique likes to say, “your Chief Diversity Officer should be your CEO.” In other words, unless law firm leaders are personally committed and engaged in efforts to make meaningful progress, we cannot expect a substantial increase in representation of diverse lawyers in Biglaw. The challenge is too important to be delegated.