Legal Commentary

Adam Smith's Home Town

Posted on May 16, 2009
If you've never been to Edinburgh, I highly commend it to you.  And that's not just because of the Adam Smith connections, although that's what I'll very briefly mention here. We're staying about 200 yards down the Royal Mile from Adam Smith's new statue, unveiled 4 July 2008, and about...

Interest Rates or Collateral?

Posted on April 14, 2009
Every once in awhile, a genuinely novel idea comes up in economics, and you would think that given the generally impenetrable, contradictory, and confused commentary emanating from far and wide about our current situation, now might be a propitious time for a truly new idea to arise...

The Balance Sheet Recession

Posted on April 08, 2009
More than ample is the ink that's been spilled over trying to explain just exactly what we're going through economically: Is it a bad recession? A near depression? Is it analogous to 1929? Is it analogous to....? Does our salvation lie in monetary policy? In fiscal policy? Are trillion-dollar budget...

What We Know & What We Don't Know

Posted on April 02, 2009
Just as McKinsey's consulting practice centers on corporate America, certainly its core clientele and expertise, as opposed to law firms, where they have no domain expertise that anyone would notice, the McKinsey Quarterly surveys do not encompass law firm leaders, but global corporate executives...

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Is Capitalism Dead?

Posted on March 28, 2009
Is capitalism dead? The Financial Times has an ongoing series, The Future of Capitalism (I haven't read it all, but "dubious" would seem to be the most apt one-word review so far),  Knowledge @ Wharton has "revisited" the question whether capitalism is working, and even the normally staid and circumpsect...

What I'm Reading

Posted on March 23, 2009
From time to time, people ask me what I'm reading when trying to figure out what is going on in the economy these days. A glib response might be, "anything I can get my hands on," but the question deserves a more thoughtful response, so herewith a book review and...

The Profit Imperative

Posted on March 17, 2009
The news out of Dewey & LeBoeuf--that 66 partners, or about one in five of their 350 partners, have seen their compensation cut over the past 15 months by up to 80%--begs for an explanation, or at least some commmentary. First, what's going on in the firm's own words: The...

The Human Toll

Posted on March 15, 2009
Time for a time-out. In all the obsessiveness and compulsiveness about the impact that this little economic interregnum we're gamely marching through is having on our firms, our P&L's, and even our personal balance sheets, let us pause for a moment to consider the genuine human toll of layoffs...

The Non-Equities (& Others) Heard From On "The Great De-Leveraging"

Posted on March 13, 2009
Well, that'll teach me... The volume of commentary following my publication earlier this week of "The Great De-Leveraging" has been unprecedented.  Depending on your attitude, that is either deeply gratifying or almost overwhelming.  As one who takes the positive view by default, I choose option A...

The Great De-Leveraging

Posted on March 08, 2009
Just as I was thinking it was about time to publish a column on the topic of "leverage" at law firms (roughly speaking, the associate to partner ratio, although there's more than one way to calculate something that people will call "leverage"), here comes a slew of pieces on the...

"The Media & The Legal Profession:" Panel at Georgetown Law

Posted on March 01, 2009

Report to Readers

Posted on February 28, 2009

The "Index Fund" of Law Firms?

Posted on February 27, 2009

Let's Just Pull the Covers Over Our Heads. Or NOT.

Posted on February 23, 2009
America has been through many crises and challenges before, far worse than what we're experiencing today. Need I mention (keeping it to economics and not including wars), the hardships and deprivations brought on by the Civil War, the long depression of 1873-1895, the Great Depression itself, the grinding stagflation of...

Layoffs: Substitutes & Complements

Posted on February 20, 2009
When non-lawyers ask what's happening in the world of law these days (i.e., what ATL is covering), our first response is usually one word: layoffs. It's been a dominant theme in our coverage since the fall. ?Above The Law (today) While I might nominate that quote for Understatement Of...

What Did I Do Wrong?

Posted on February 13, 2009
Within the space of 15 minutes late this afternoon I got calls from both Bloomberg News and The American Lawyer asking me what was going on with all the layoff announcements hitting the wires today. So this was not your ordinary day, and even though "Adam Smith, Esq...

The "Cull" & Your Clients

Posted on February 09, 2009
So now the "cull" has come to partners in the Magic Circle. As The Financial Times reports: The cull of partners at Britain's leading law firms worsened on Wednesday as Clifford Chance unveiled plans for job cuts across its 21-country global office network...

Are Profits The New Growth?

Posted on February 03, 2009
Find out my thoughts on the matter here....

The NYT's Obit for the Billable Hour

Posted on January 31, 2009
When The New York Times features it on the front page, it must be real, right? I'm referring to Billable Hours Giving Ground at Law Firms, which features Evan Chesler flatly arguing that "This is the time to get rid of the billable hour." Unfortunately, if you're looking for real...

"Animal Spirits," Anyone?

Posted on January 28, 2009
Robert Shiller, the Yale economics professor who has co-authored the forthcoming Animal Spirits: How Human Psychology Drives the Economy and Why it Matters for Global Capitalism, has an important op-ed in The Wall Street Journal. Shiller's op-ed itself is an argument that the Obama Administration's proposed stimulus package isn't big...

Report From London

Posted on January 25, 2009
Back from a week in London. (Close readers may recall I was there six weeks ago, and while I may be imagining things slightly, I believe the tone in the City has changed perceptibly even in that short time.) Herewith a concise report, albeit one consisting more of questions than...

Critical Thinking II

Posted on January 17, 2009
I recently wrote about the dearth of critical thinking abroad in the land. Now I'd like to bookend that piece with a classic from The Harvard Business Review, "Why Don't Managers Think Deeply?" The opening lines are priceless; I would ask you only to put yourself in the shoes of...

London This Week

Posted on January 17, 2009
I'll be leaving for London tonight and spending all week there—back next Saturday the 24th.  Among the firms I'll be visiting will be a number of the usual suspects including most of the Magic Circle. Although I was just over there early last month, at the pace things seem to...

Lessons From the Depression

Posted on January 12, 2009
Every day, these days, and more than once, I ask myself, what all this means for our profession and our industry. By "all this" I refer, of course, to the economic environment. Here are some of the hypotheses I'm putting in front of people I talk with: Will this period...

Richard Susskind's "The End of Lawyers?"

Posted on January 09, 2009
Ten years after publishing The Future of Law, Richard Susskind is back with what in many ways is an extended sequel, The End of Lawyers? If you don't know Richard (disclosure: I do, and consider him a friend), it's high time. From the dust jacket: "Richard Susskind is Honorary...

Happy 2009

Posted on January 01, 2009
This is actually a new-for-2009 Waterford crystal ball, approximately 10 feet in diameter, weighing over 12,000 pounds, covered with 2,668 crystal triangles, and illuminated by more than 32,000 LEDs.  Happy big bad bright New Year. Actually, Dear Reader, I imagine many of you, as I, will be just as...

Perspective

Posted on December 30, 2008
Perspective. It's time for some. A friend of mine who's the lead financial reporter for one of the original three networks prompts these thoughts. Not that he/she subscribes to the view that it's time for some "perspective"--au contraire. To paraphrase their view: "We're in a severe recession...

If You're So Smart, Why Aren't You Rich?

Posted on December 27, 2008
Actually, the formulation of that headline that I prefer these days is the famous inversion by the Nobel economist Paul Samuelson: "If you're so rich how come you're so dumb?" And yes, that brings us promptly to the Bernard Madoff scandal. Among the multitude of "we should have seen it...

Merry Christmas

Posted on December 25, 2008
Rockefeller Center, Christmas 2008 Photograph by Bruce MacEwen...

Thacher, Proffitt Wood LLP: 1848 - 2008

Posted on December 22, 2008
A Merry Christmas, Happy Holidays story of the first order: As noted this morning by The New York Times, Above The Law, and The WSJ Law Blog, Sonnenschein is acquiring about 100 lawyers, including 40 partners, from 160-year-old Thacher Proffitt & Wood—technically, not a merger of the firms but a...

Rumors of Its Demise

Posted on December 21, 2008
"Reports of my death have been greatly exaggerated." —Mark Twain, in a cable from London to US publishers, who had mistakenly printed his obituary. And so, for the entirety of my career, has it been the case with predictions of the demise of the billable hour...

"Structural Breaks" and Other Timely Phenomena

Posted on December 12, 2008
A smart friend of mine, in a conversation apropos the financial meltdown, recently wondered if people "aren't reading too many newspapers and not enough history."  He has a point. So forthwith, a little history. According to McKinsey in "Financial crisis and reform: Looking back for clues to the future," the...

What's Your Attrition Rate Lately?

Posted on December 08, 2008
An unspoken, and certainly uncelebrated, aspect of the law firm associate personnel model is built-in attrition. "Built-in" can have two traditional meanings, and one new one: Traditional A: They wash out of their own accord, because of a variety of factors: they've paid off their student loans, and so the...

Greetings from London

Posted on December 03, 2008
I'm here in The City for the week, having arrived Sunday morning and going home to New York Thursday evening.  The purpose is essentially a series of meetings with various firms I'm having with my partners Ward Bower and Tony Williams, but that doesn't mean I haven't been able to...

Practical Law Company Crosses the Pond

Posted on December 02, 2008
Last week I had a chance to catch up with Jeroen Plink, the CEO for the US operations of Practical Law Company. Jeroen has been with PLC for over 6 years and, in a previous life, worked as an attorney for Clifford Chance and Latham & Watkins. Unfamiliar with Practical...

In Search of Execution (And, Happy Thanksgiving)

Posted on November 27, 2008
Twenty-six years ago Tom Peters and Robert Waterman published In Search of Excellence, and to some extent the genre of writing for business managers hasn't been the same since.  If for no other reason, it's worth taking a moment to revisit Peters' thoughts on the current state of the art of...

Lessons From Citi

Posted on November 23, 2008
Consider a nonrandom selection of headlines from The New York Times, The Financial Times, andThe Wall Street Journal: Citigroup Pays for a Rush to Risk Citigroup Tries to Steady Stock Turmoil Continues in Banking Sector Citigroup: You Can't Step Into the Same Crisis Twice, Right? Citi crisis deepens as shares...

"Globalization of the Legal Profession" Conference at Harvard Law

Posted on November 19, 2008
I'll be attending the "Globalization of the Legal Profession" conference at Harvard Law School this Friday (21 November), put on by HLS' Program on the Legal Profession.  Here's the  agenda, with some notables on the program including a keynote by Ben Heineman, and commentary across four panels from many other...

BigLaw & The Big Three

Posted on November 15, 2008
Consider Detroit's Big Three. Having made what  turned  out to be bad bets on  over-investing in now shunned product lines, they've been  conspicuously laying people off, downsizing, attempting to  renegotiate credit lines, and furiously trying to revamp their product offerings to align to and conform with the world's new reality...

New York Today and Tomorrow

Posted on November 11, 2008
Our texts for today come from (in inappropriate order) the New Testament, as it were, and Peter Kalis, the chairman of K&L Gates: "The metaphysical question is whether you can have bulge-bracket Wall Street firms without Wall Street," says Kalis...

A Short Tour of 225 Years

Posted on November 04, 2008
1789: US Constitution, Article I, Section 2: Representatives ... shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, ...

Why You're Reading This Online

Posted on November 01, 2008
Sometimes there's no substitute for being there. This couuld be the introduction to a column about why technology, Web 2.0, and collaboration at a distance all add up to precisely zero threat to places like New York and London--making them, in fact, more important than ever--but I have a different...

Think Again About Globalization--A Guest Column

Posted on October 28, 2008
In the nearly five-year history of "Adam Smith, Esq.," you could have counted the number of guest columns on one finger.  As of today, make that two. The following comes from E. Leigh Dance (see immediately below), who has a strong perspective on what globalization means for our industry...

New Industry Economic Indicator

Posted on October 23, 2008
News Release I am happy to re-publish the press release issued this morning by ThomsonReuters reporting on a new alliance we have struck. For my purposes, the value of this will be being able to offer you, my readers, an additional perspective on legal industry market conditions at a...

Manic-Depressive? Take a Deep Breath

Posted on October 22, 2008
We are surely living in times of manic-depressive equity and fixed-income markets ("We've made the future safe for Western financial institutions!"  "No, we haven't!). New York City itself can seem to be suffering from one gigantic case of whiplash: Even last month, those of us who don't work in finance...

Nobel Prize in Economics/2008

Posted on October 18, 2008
Not every day do we get a new Nobel Prize winner in Economics, not to mention one whose name, Paul Krugman, might actually be familiar to more Americans than the few of us who are poor closet economists. Krugman is of course not only a Princeton professor (we pause to...

Sand Hill Road Brings You The Head of a Pig

Posted on October 14, 2008
Making the rounds is a  presentation by Sequoia Capital on "startups and the economic downturn," which constitutes a sort of come-to-Jesus meeting for that storied VC firm's portfolio companies.  It tells a tale of radical gloom, with "multiple problems" in the world economy including: over-leveraged financials falling  asset prices frozen...

"Clients Are Extraordinarily Understanding"

Posted on October 10, 2008
Today's Wall Street Journal profiles H. Rodgin "Rodge" Cohen, Chairman of Sullivan & Cromwell.  Here at "Adam Smith, Esq.," we're not into gossip and we're not into profiling celebrities (well, celebrities in our world, anyway) for the sake of same—unlike some sites doubtless familiar to you...

Yes, But What Does It Mean for Us?

Posted on October 07, 2008
A few weeks ago I posed the question to you all:  Will the realignment of the top financial services institutions fundamentally alter the long-term demand for legal services? Here's how you voted: A couple of aspects of these seem worth commentary:  There seems near unanimity that, regardless of what happens...

(New York) City's End?

Posted on October 04, 2008
With all the body blows the New York City financial services industry and its attendant handmaidens (BigLaw, that would be you) have taken in the past couple of months, it may be time to remind ourselves that for the past two centuries or so, ever since New York's emergence as...

Pretend Your Firm Were an Investment Bank

Posted on October 01, 2008
Analogies are imperfect (that's why they're called analogies), but here's an interesting thought experiment tying together the wild rides investment banks have had on Wall Street during the past few weeks and the potential impact of the Legal Services Act in the UK, permitting law firms to go public and...

Heller Ehrman (1890-2008)

Posted on September 26, 2008
It's all over for Heller Ehrman. One of the best single pieces of coverage comes from The San Francisco Chronicle. Heller was founded in 1890, rode through the 1906 San Francisco earthquake (in the aftermath of which the nascent client Wells Fargo Bank set up a temporary headquarters at the...

How Big & How Bad Is It?

Posted on September 22, 2008
Now that Morgan Stanley and Goldman Sachs will be converting into traditional bank holding companies, the landscape has changed for keeps: "With the move, Wall Street as it has long been known -- a coterie of independent brokerage firms that buy and sell securities, advise clients and are less regulated...

E-Billing Survey: Reminder

Posted on September 21, 2008
Reminder: If you haven't taken our quick (3-minute) survey on e-billing, please do so. You can sign up at the end to get a free copy of the complete, aggregated, anonymized results. Take the survey! Thanks....

Stop the Insanity

Posted on September 21, 2008
Sometimes in the midst of turmoil all around us, with the landscape of the financial services industry--for many of us, our lifeblood--reforming under our very eyes, it's worthwhile to take a step back and reflect upon some enduring business verities...

What's Going On?

Posted on September 19, 2008
Nothing less than a generational transformation of investment banking and the financial services industry at large.  Its implications for, among other things, the economies of New York City and London, the structure of global capital markets, and our own dearly beloved industry, are impossible to predict with any high degree...

Lehman Bros. RIP; Merrill, Meet BofA; ??AIG??

Posted on September 15, 2008
Pete Peterson, former head of Lehman Brothers, co-founder of Blackstone, and secretary of commerce under Nixon, described this weekend's events on Wall Street with what almost amounts to understatement:  "My goodness. I?ve been in the business 35 years, and these are the most extraordinary events I?ve ever seen...

Lessons from JP Morgan Chase

Posted on September 13, 2008
This is how the cover story of the current issue of Fortune starts out: It was the second week of October 2006. William King, then J.P. Morgan's chief of securitized products, was vacationing in Rwanda, visiting remote coffee plantations he was helping to finance...

Take a Brief Survey on E-Billing

Posted on September 11, 2008
"Adam Smith, Esq." is conducting research into the market penetration of e-billing of clients by law firms—as opposed to the old-fashioned paper billing (even if it's emailed, "pdf"'ed, etc.) and what analysis, if any, is actually performed against that data...

IQ Is A Commodity: Now What?

Posted on September 11, 2008
More futile ink has been spilled on the issue of "leadership" than, I would wager, any other topic in the managerial literature. But the topic is irresistible. Why? Because deny it as you might, leadership matters. It consistently distinguishes the leading firms from the "chasing pack," it transforms firms over...

Buy High, Sell Low

Posted on September 06, 2008
Best of times or worst of times to make some acquisitions? This is one area where the head/heart divergence may be more radical than usual—and where it could really cost you. Here's how McKinsey poses the dilemma: "As the credit crunch threatens to become a global downturn, corporate leaders...

Costs & Revenues: Health Check Time

Posted on September 05, 2008
So maybe you can't save your way into profitability, but you can save money more and less intelligently. And I'll give you a hint: It's not about how many meetings are held at times when food should be served. (Think I'm making this up? Firms have sent out memo's to...

What's Your Time Horizon?

Posted on September 01, 2008
Time to take stock.  This dratted credit crunch has now celebrated, if that's the word, its first birthday, and there is no clarity about when it may end.  What's a law firm to do? If you believe McKinsey, and if you believe that where investment bankers go, law firms will...

ILTA 2008

Posted on August 29, 2008
Apologies for a dearth of columns this week, but I was at ILTA/2008 at the Gaylord Texan outside Dallas.  Two comments about the Gaylord, Dallas, and August.  First, the Gaylord comes as close as any place I've ever been to meriting the word "indescribable...

How's Your 2008 Shaping Up?

Posted on August 22, 2008
We have our first comprehensive report on how 2008 is shaping up financially, courtesy of The American Lawyer, and Dan DiPietro of Citi's Private Bank, and it paints a picture of what are soon going to be, if they aren't already, vastly diminished expectations...

The Balanced Scorecard, Version 5.0

Posted on August 16, 2008
One of the most famous management books in recent history is The Balanced Scorecard, published in 1996 by two Harvard Business School professors, Robert Kaplan and David Norton. If you've never heard of it, you should at the very least become familiar with its core precepts, which can be roughly...

London and New York, Meet Mumbai and Delhi

Posted on August 12, 2008
With the news today that both Clifford Chance and Eversheds are ramping up their outsourcing initiatives in India (covered in The Lawyer and in LegalWeek), it's timely to report on a panel on outsourcing that I attended last week at the ABA's annual convention here in New York...

The Thirty Years' Associates Salaries War

Posted on August 09, 2008
Put these trends together, as reported by this month's issue of The American Lawyer, and what do you get? Midlevel associates, despite their pay jump since 2006, aren't satisfied with with their compensation; New York City salary levels have penetrated every major market across the country; The annual midlevel associate...

Bubbles

Posted on August 04, 2008
This is about the Cadwalader layoffs. But I won't be piling on. I really won't. Instead, I'd rather examine how the firm got to this unhappy pass and what managerial lessons it might hold in store for us. To understand what brought it to cutting fully 20% of its lawyer...

The New Whipping Boy?

Posted on July 29, 2008
Earlier this month, I wrote a column "about wringing our hands" (its actual title was How High Quality Are Your Lawyers?  And How Can You Tell?) and I've just received a most thoughtful email from Alec Guettel, one of the co-founders of Axiom Legal, which is extensively discussed in the...

Zero Tolerance to the Rescue

Posted on July 24, 2008
"This is [the program] in its best light. But what lies beneath is a pattern of behavior that places law firms at risk. Generally, the improper activities take place out of the spotlight. ... [Participants] expressed a sense of feeling powerless about how to respond...

A Conversation with Jay Zimmerman

Posted on July 22, 2008
I recently had the chance to sit down with Jay Zimmerman, Chairman of Bingham, to discuss the changes he's seen over his career, and to talk about the future of the legal industry and Bingham. Herewith a synopsis. Jay (Harvard, Harvard Law) started his career in New York at Debevoise,...

The Bi-Modal Starting Salary Distribution

Posted on July 21, 2008
My friend Prof. Bill Henderson of Indiana University School of Law has just published a highly significant column titled "How the 'Cravath System' Created the Bi-Modal Distribution." At least one blog ("MoneyLaw") has already deemed it "The blog post of the year;" be that as it may, it's worthy of...

Is Your Firm Innovative? As Innovative as Pixar?

Posted on July 18, 2008
Does it strike you (as it does me) that the noise level surrounding "innovation" in law firms is reaching crescendo proportions? Just in the last few months, I've written about Legal OnRamp, Allen & Overy's mini-conference on innovation here in New York, Eversheds' 21st Century Law Firm survey, Altman Weil's...

The Dog That's Not Barking

Posted on July 14, 2008
I've been increasingly mystified, now bordering on troubled, by a new case of "the dog that didn't bark."  Here's my question:  Given that we've been slogging through this subprime/Alt-A/Bear Stearns/Freddie & Fannie financial quicksand for a solid year, where is all the restructuring and insolvency work? Just a few days...

Thoughts on Innovation from the Firm That Brings You the FT's "Innovative Law Firms" Award

Posted on July 14, 2008
Here's an addendum to the coverage I gave to Eversheds' Report on The Law Firm of the 21st Century, as well as to the story I published last month on the conference held here in New York sponsored by Eversheds.  This email came in over the weekend from RSG Consulting...

2011 Is Not Far Off

Posted on July 10, 2008
Richard Turnor, a partner in the Private Client Group at Allen & Overy, has penned for Managing Partner Magazine one of the more thoughtful pieces on the implications of the Legal Services Act in the UK.   In particular, he asks the same question I've been asking for some time:  "After...

Adam Smith Monument in Edinburgh

Posted on July 05, 2008
At long last, Adam Smith has been honored in his native Edinburgh, with a prominent statue outside St. Giles' Cathedral on the Royal Mile. As reported by the FT, the unveiling was yesterday: Vernon Smith, the George Mason law and economics professor and winner of the 2002 Nobel Prize in...

Happy 4th of July

Posted on July 04, 2008
Watching Fireworks on the Fourth: Coney Island, 1962 [Courtesy of Magnum]...

How High Quality Are Your Lawyers? (How Can You Tell?)

Posted on July 03, 2008
This is a column about wringing our hands. Our first text, from the Old Testament conventional debate, stems from today's WSJ story on "Axiom Legal," headlined Newcomer Law Firms Are Creating Niches with Blue-Chip Clients, discussing the business model of Axiom and other firms, which is to provide highly credentialed...

Lessons From Johnson + Johnson

Posted on July 02, 2008
Knowledge @ Wharton has an enlightening interview with William Weldon, CEO of Johnson + Johnson, on the challenges of leadership in a decentralized company.   You may think the scale of J&J (120,000 employees, $61-billion in revenue, operations in dozens upon dozens of countries) means there's no analog between what he...

Northwestern Law School's "Accelerated JD" Program: It's Not About the Two Years

Posted on June 27, 2008
Late last week Northwestern University Law School in Chicago announced an "Accelerated JD" program, compressing the same 86 credit hours earned by traditional three-year JD students over the course of six semesters into five semesters over two years...

A Modest Suggestion re Associate Layoffs

Posted on June 26, 2008
Three guesses what these numbers represent: Blank Rome 20 Cadwalader 35 Clifford Chance 6 Hunton & Williams ?* Paul Hastings ?* Powell Goldstein <10 Sonnenschein 37 Sutherland Asbill & Brennan 15* Thacher Profitt 24 Thelen Reid 26 Total 174** *not verified **assumes "?" = 0 Yes, obviously, the number of...

The Great Divide

Posted on June 21, 2008
Last week Eversheds sponsored a conference in New York, primarily targeted at senior inhouse counsel, to discuss the current and future state of relations between law firms and inhouse departments.  It was not pretty. About 90% of the attendees were the chief legal officer of their companies or just a...

GC's May Be Complaining, But Do They Really Want Change?

Posted on June 18, 2008
Over at LegalOnRamp there's an interesting discussion underway about the extent to which GC's do—or don't—seek genuine innovation in the way BigLaw provides services.  I'm taking the liberty of republishing it here (with permission of Paul Lippe, the CEO of LegalOnRamp) because at the moment LegalOnRamp is invitation-only...

The CIO Challenge: It's Not About Server Up-Time

Posted on June 13, 2008
Did you know that the venerable Booz Allen & Hamilton has truncated its name to "booz&co."?  Not only abandoning a name with tremendous recognition and brand equity but, in a "what were they thinking!?" blunder, shining a spotlight on the unfortunate bibulous associations of the name "Booz...

A Conversation with Ray Bayley of NovusLaw

Posted on June 11, 2008
In the course of two hour-plus long interviews over the past couple of weeks with Ray Bayley, co-founder of NovusLaw, I learned that everything I thought I knew about outsourcing was wrong. Or rather, that I hadn't thought about outsourcing, really, at all...

A Conversation with Allen Fagin

Posted on June 07, 2008
Last week I had the opportunity to sit down with Allen Fagin, Chairman of Proskauer Rose. Allen is Columbia BA summa cum laude, and Harvard Law JD cum laude at the same time he earned an MPP from Harvard's JFK School of Government. He's worked at Proskauer for his entire...

Happy Birthday, Adam Smith

Posted on June 05, 2008
Today, June 5th, is Adam Smith's birthday, in the year 1723.  He would be 285 today.  As I noted a year ago today, he was born in Kirkcaldy, Scotland, a dozen miles north of Edinburgh across the Firth of Forth: Although his birth home has since been demolished (all that...

New York's White Shoe, the Magic Circle, and Historical Path-Dependency

Posted on June 04, 2008
Chambers has a nice seasonal report it mails to subscribers, but it doesn't provide it online. This is a pity (and, I predict, a practice with a finite half-life), but one of the articles in the issue I recently received (August 2007 for those of you following along at...

"Innovation in Legal Services" Sponsored by Allen & Overy

Posted on June 03, 2008
I was invited to attend a presentation on "Innovation in Legal Service Delivery" last Wednesday at Allen & Overy's New York offices, where the conversation was kicked off by four speakers: Ward Bower of Altman-Weil discussing their Legal Transformation Study; Rosemary Martin, newly minted General Counsel of the Practical...

"CSO's?"

Posted on May 28, 2008
Does your firm have a "Chief Strategy Officer?" Thinking about it? Tried it and didn't like it? Well, apropos the news a couple of weeks ago that Cravath has a first ever director of strategic planning, we thought it would be timely to review what's known about "CSO's...

Memorial Day

Posted on May 26, 2008
Arlington National Cemetery, Section 34 looking south...

Lessons From Toyota

Posted on May 25, 2008
Have you ever considered a completely different approach to strategic planning for your firm? An approach kind of like Toyota's? Let me explain. There are traditional and classic strategic plans, which typically focus on practice group and geographic reach, perhaps with an overlay of a third dimension of client or...

Eversheds Brings Us "The Law Firm of the 21st Century"

Posted on May 22, 2008
Eversheds is often up to interesting things. One of the most attention-getting, which was just renewed for another year, was Tyco's decision to entrust work it had previously distributed among 250 law firms exclusively to Eversheds. Here's the deal in a nutshell: "Tyco has signed up for the second year...

Legal Education Reform?

Posted on May 20, 2008
Timely is the only word for the new article in Booz-Allen's Strategy + Business, which examines the history of business school education and asks if today's MBA programs are out of sync with the needs of 21st Century business. Why timely? For two reasons...

Managing Talent Globally

Posted on May 16, 2008
Do these descriptions fit your firm, or sound credible to you? "Managing talent in global organization is more complex and demanding than it is in a national business." "The movement of employees between countries is still surprisingly limited...

"The Transatlantic Elite:" Sixteen Names And Much More

Posted on May 13, 2008
The Lawyer came out this morning with its first-ever Transatlantic Elite, profiling the leading firms on both sides of the pond.  I'm not aware of a comparable journalistic project, or of one that matches its ambition.  What it's not, first of all, is a financial or numeric ranking:  This is...

Who's On Your "Red Team?"

Posted on May 12, 2008
According to a McKinsey study, in the corporate world, for every five attempts to enter a new market, four fail and only one succeeds. And this isn't limited to startups or novice businesses; it includes very sophisticated firms. For example? Anheuser-Busch tried to diversify into snack foods...

Legal Talk Network Show on the 2008 AmLaw 100

Posted on May 08, 2008
Yesterday Aric Press of The American Lawyer and I were interviewed on the "Legal Talk Network" for this week's half-hour installment of "Lawyer2Lawyer," on the topic of what the recently released 2008 AmLaw 100 figures reveal about the state of the profession these days...

Going Two-Tier? Not So Fast

Posted on May 06, 2008
Thinking of going to a two-tier (equity and non-equity) partnership?  Or of increasing the non-equity ranks if (like 80% of the AmLaw 100) you're already two-tier? I'm here to counsel extreme skepticism.  And I'm tempted to be even more absolutist:  Don't do it...

A "Bubble" in PPP?

Posted on May 05, 2008
A loyal reader, partner in an AmLaw 25, writes, under the topic "Could we be developing a 'bubble' in law firm PPP:" Bruce:  I'd be interested in getting your thoughts on the above question. If you define a market "bubble," as a period when the expressed value of an asset...

The Market Is Not Responsible For Your Results

Posted on May 02, 2008
One of my core beliefs is that no one is entitled to incumbency. I can point to the turnover in the AmLaw 100, but to abstract from our industry is often more illuminating because no one gets defensive. In terms of understanding and analyzing enduring corporate cultures, probably no one...

The AmLaw 100 for 2007: "Flash Report"

Posted on April 29, 2008
The American Lawyer not only has a spiffy new website, but this afternoon @ 3pm NY time they offered their first-ever webinar, hosted by Aric Press,  offering a preview of the AmLaw 100 for 2007.   The full results will be released tonight (look for a link here on "Adam Smith,...

Client Intake is Purely Operational. Not.

Posted on April 24, 2008
Recently I had the chance to sit down for a chat with a "lawyer's lawyer" in that his practice revolves around matters such as partnership agreements (their drafting and interpretation), fee disputes and malpractice litigation, and professional ethics and professional responsibility overall...

"The Future of the Global Law Firm"--Installment #2 (Fall 2009?)

Posted on April 21, 2008
Here are just a few of the early reviews of the Georgetown Law Symposium on "The Future of the Global Law Firm:" “Extraordinarily well done.  Interesting people and good stuff.” “I thoroughly enjoyed the conference.  It was stimulating, informative, taught me much and yet left me looking for more...

Georgetown Conference on the Future of the Global Law Firm: First-Hand Report

Posted on April 19, 2008
I'm back from the two-day "Future of the Global Law Firm" symposium at Georgetown Law School, which was organized by Prof. Mitt Regan of Georgetown, Prof. Larry Ribstein of the University of Illinois, and myself. You may read other coverage of this elsewhere, as in attendance were Aric Press of...

Georgetown Law Conference on the Future of the Global Law Firm

Posted on April 17, 2008
I'm at the Georgetown Law Conference on the "Future of the Global Law Firm" for the next couple of days. I'll try to report in as close to real time as I can, but whether or not I achieve that objective, look here on "Adam Smith, Esq." for the most...

Of Rivets & CDO's (And Temptation)

Posted on April 16, 2008
In this economic environment of little visibility going forward and indeed little transparency into the health of the transactional practices at the moment, you may find yourself struggling to meet partners' expectations for a continuation of the double-digit growth rates of revenue and income that most firms have enjoyed for...

Diversity, the Billable Hour, & Other Challenges

Posted on April 12, 2008
First comes an FT story on clients demanding more "diversity" in City firms, then a followup letter attributing high female turnover to late night hours, next a WSJ Law Blog piece on how to keep female talent on the partnership track (featuring insights from WilmerHale and Cleary), a Working Mother...

Why KM Matters. With Soundtrack.

Posted on April 10, 2008
Here at "Adam Smith, Esq." I've written about Knowledge Management a fair amount, since it's my belief that knowledge is what law firms sell. But despite the (I believe) inarguable centrality of KM to what we do, there are three enormous problems with it: Too many lawyers don't understand why...

Shea Stadium Is Named For...?

Posted on April 10, 2008
The American Lawyer today takes note of the last opening day of the season of baseball's New York Mets to take place at their home stadium since 1964, Shea Stadium. It was simpler days when Shea opened, and days when a mere lawyer-cum-power broker could actually end up with his...

Slaughters vs. Clifford Chance vs. Networks

Posted on April 08, 2008
The Times (UK) asks today, "Slaughter & May v Clifford Chance:  Who is pursuing the best route?" The article puts head-to-head two concepts of what makes for a great and powerful law firm:  World-leading profits per partner, on one hand, vs...

Global Management: Central or Local?

Posted on April 05, 2008
"Multilocal?" That's the new McKinsey coinage intended to lend new intellectual luster and heft to the perennial management-theoretical challenge of how to manage multinational firms. No matter how familiar the business issues, now is probably an especially timely moment to revisit them, given the strenuous economic environment...

Georgetown Law Conference on The Future of the Global Law Firm

Posted on March 29, 2008
In less than three weeks, on Thursday and Friday April 17 and 18, the Georgetown Law School Center for the Study of the Legal Profession will host the symposium, "The Future of the Global Law Firm." The Symposium will be at the Law School (a few blocks from the Capitol...

The Lawyer on the US Top 50

Posted on March 26, 2008
The current issue of The Lawyer features the cover story, "US top 50's £23.4bn haul makes 2007 the best year ever."  (That's $46.8-billion to us.)  Top-line: Year over year revenue for the 50 largest US-headquartered firms was up more than 16%, from $40...

"Legal Transformation Study" Released by Altman Weil

Posted on March 25, 2008
Today Altman Weil announced its release of The Legal Transformation Study:   Your 2020 Vision of the Future, published by Decision Strategies International: “The comprehensive industry assessment identified 11 key global trends and uncertainties shaping the future of the legal industry, then developed four possible planning scenarios that the legal...

"Measuring Law Firm Success:" The Law Society Picks Up the Baton

Posted on March 25, 2008
The attentive among you may recall that I was in London last November where, among other things, I was pleased and flattered to have been asked by Guy Beringer of Allen & Overy to participate in a panel hosted at A&O's Bishopsgate headquarters on "Measuring Law Firm Success...

Hard Economics & Associate Lockstep

Posted on March 21, 2008
No question is posed to me more frequently these days than, "What does this economic environment mean for law firms?" To which the only sensible answer is, "It's way too soon to predict anything for sure, but each firm's own situation is sure to differ...

"Adam Smith, Esq." In Strategic Alliance with Altman Weil and Jomati Consultants

Posted on March 18, 2008
With great pleasure, I can today announce that Adam Smith, Esq. has entered into a strategic alliance with Altman Weil, Inc., and with London-based Jomati Consultants LLP to consult with clients on matters related to law firm strategy and economics. I have known Ward Bower of Altman Weil and Tony...

Report From London

Posted on March 15, 2008
Just back from an abbreviated week in London (essentially Tuesday through Thursday).  Herewith a report. I met with the managing partners of a good half-dozen firms, fairly representative of the marketplace, and unsurprisingly the top question on most minds is what the economic downturn portends...

Process or Passion?

Posted on March 08, 2008
A major article appears in this month's American Lawyer, penned by Ben Heineman, most famously ex-GC of GE, and David Wilkins, Harvard Law professor. Both are now deeply involved in HLS's Program on the Legal Profession, whose stated mission is "to build bridges between the academy and the profession...

The Marketing Value of Publishing: 1440 to 2008

Posted on March 03, 2008
Over at "Drug and Device Law," they kicked up a little storm last Friday by asking why the marketing value of practicing lawyers' writing a blog seemed to be undervalued.  I first learned of it when my friend Mark Herrmann of Jones Day sent me a heads-up asking if I...

A Q&A With LexBlog About "Adam Smith, Esq."

Posted on March 01, 2008
Kevin O'Keefe and Rob La Gatta of LexBlog posed a few questions to me a week or two ago, for their "LexBlog Q&A Series," and I thought you, Dear Reader, deserved to see my answers. 1.  When did you start Adam Smith, Esq? What was your purpose in doing so?...

"Think Different?" Who, Me?

Posted on February 27, 2008
Consider your reactions to these three hypothetical scenarios: In light of slack demand, BMW announces a combination of price cuts, rebates, and financing incentives that would save you 15%. More or less likely to visit a dealer? The Dow Jones Industrials are down 15% year to date...

Prospects for 2008: Another Precinct Heard From

Posted on February 25, 2008
So once it's in The Wall Street Journal it must be a real phenomenon, right? I'm referring to today's "Why BigLaw Is Bracing for a Leaner 2008," along with its companion piece on the WSJ Law Blog. A sampling of the evidence adduced behind the hypothesis of leaner times:...

On Death & Dying (Financially, That Is)

Posted on February 22, 2008
Tuesday I attended one of the regular lunch-time meetings of the ABA's "Back to Business Law" project which describes itself as "a pilot project sponsored by the ABA Section of Business Law, [to] provide periodic continuing legal education programs and informal networking opportunities for attorneys who temporarily leave active...

Don't (Only) Sweat the Small Stuff

Posted on February 18, 2008
While we're all obsessing over the sub-prime crisis, the credit crunch in general, the housing market's retrenchment, the inability to mark to market CDO's, the devilish tendency of "liquidity" to be robust when you don't need it and nonexistent when you do, whether worldwide financial institutions' losses and writedowns will...

Sometimes the Joke Is On You

Posted on February 13, 2008
Guilty as charged on all counts. (With thanks to The New Yorker.)...

The Story Behind the Reed Smith/Anderson Kill Story

Posted on February 12, 2008
By now it's been amply reported that 55 of Anderson Kill's 126 lawyers are leaving for Reed Smith, effective February 1.   In classically hyper-ventilating fashion, the Brits (Legal Week) reported that Reed Smith "has swooped, ...taking almost half the fee-earners...

Andrew Carnegie: Robber Baron, Entrepreneur, Philanthropist, Scot

Posted on February 10, 2008
Rarely do I review books that disappoint, but there's a first time for everything, and I want to report that in my opinion David Nasaw's 850+-page  Andrew Carnegie (Penguin:  2007) is skippable. This is a shame. Carnegie, aside from being perhaps the most successful entrepreneur and businessman of the Gilded...

It's Not About "Integration"

Posted on February 08, 2008
"'The issue isn't 'integration,' ' [Barton Winokur of Dechert] says. 'I think that's a garbage word people use." He's talking about integration of laterals, a key issue on which The American Lawyer has just given us a helpful scorecard, in the form of a report detailing moves over the past...

The Ten Years' War

Posted on February 07, 2008
It's been nearly a decade since McKinsey published the seminal article, The War for Talent, but many of its abiding observations remain true today and indeed are worth revisiting. What they found ten years ago started from the implacable demographic reality that the baby boom generation was passing through the...

The Annual Hildebrandt/Citi "Client Advisory:" Glass Not Half Full

Posted on January 29, 2008
Annually, Hildebrandt and the Citi Private Bank issue a "Client Advisory" and this year's is just out.  What will doubtless grab headlines (and already has at places like the WSJ's Law Blog) is the downbeat forecast for 2008—the first since 1998, according to the Advisory—affecting both transactional and litigation work,...

Professional Firm Leaders: The Book from Harvard Business School

Posted on January 24, 2008
A potentially important new book has been published?don't worry, I've already asked the author for a review copy?but it's just now been featured on Harvard Business School's Working Knowledge. Titled When Professionals Have to Lead: A New Model for High Performance (Harvard Business School Press: 2007), the authors are: Thomas...

Unintended or Unanticipated?

Posted on January 21, 2008
On the wonderful landscape of economics, several highly visible landmarks are in the form of "laws:" The law of supply and demand, of economies of scale, of diminishing marginal utility, of the downward stickiness of wages, of decreasing returns to factors of production, etc...

A Contrarian Bounce?

Posted on January 16, 2008
I previously asserted that corporate America teaches that firms that treat recessions as opportunities rather than threats could steal a march on their more conservative brethren and emerge into the post-recession recovery as more powerful competitors...

The Upcoming Banana?

Posted on January 13, 2008
Regular readers, or simply those with good memories for the jovial Cornell University economist Alfred Kahn, who briefly served as Jimmy Carter's czar over wage-price controls, as well as the last head of the unlamented Civil Aeronautics Board (where he deregulated the domestic airline industry), will recall that he was...

In Palm Beach Next Week (Wed 16th Jan)

Posted on January 10, 2008
I'll be at Hildebrandt's Marketing Partner Forum 2008 held this year at The Breakers, Palm Beach, on January 16. If any of you will be attending, shoot me an email and maybe we can get together....

Is Your Managing Partner Still Making Jet Engines?

Posted on January 09, 2008
Text #1: "He was recruited as a very senior director in a very large City law firm. His work went well but the thing that really bugged him was the pass he had to show every time he went into the staff restaurant. The words ‘non-lawyer’ were printed on the...

Report to Readers: 2007-2008

Posted on January 02, 2008
At the end of one year and the beginning of a new, it's fitting that I offer to you all a report on the state of "Adam Smith, Esq." As Presidents intone at the start of their State of the Union address (I believe utterly without fail), I can report...

Happy New Year

Posted on December 31, 2007
  May all your resolutions become resoundingly true....

Out of the Mouths of Children

Posted on December 31, 2007
"You're too smart for your own good."  How quickly we dismiss that snide accusation as revealing the ignorance and probably the intransigent know-nothingness of the accuser.  But could there be a grain of truth in there? If you believe in the "curse of knowledge," a phrase apparently invented in a ...

Alternatives to PPP: The Word from London

Posted on December 27, 2007
As many of you know, back in  November I was in London for a week.  Among other activities—many other activities—I was pleased to be invited to participate in a panel discussion hosted by Guy Beringer of Allen & Overy, who was on the panel, along with his partner Stephen Denyer,...

A Compensation Meditation

Posted on December 26, 2007
Our  text for today, Dear Reader, coming from The American Lawyer, is as follows: "There's nothing like a fund-raiser at a private school in Manhattan to define your social station. Time was, lawyers were near the top of the heap. Investment bankers and other finance types have long eclipsed them,...

Merry Christmas to All

Posted on December 25, 2007
Rockefeller Center, New York, Christmas 2007...

Why Do Firms Merge?

Posted on December 20, 2007
Why do law firms merge? The fact is, I wonder sometimes myself. More seriously, there is typically an array of stated and unstated reasons, among them: Growth for the sake of growth:  Inadvisable.  Size alone doesn't guarantee anything particularly desirable, and may guarantee some things undesirable, such as increased managerial...

The Missed Exit Ramp

Posted on December 13, 2007
Today, in a rare departure into citing what not to do, we have as Exhibit A a piece in the current issue of the ABA's Law Practice Magazine, "Essential Attributes of Successful Managing Partners."  And what, pray tell, are those attributes of the successful? Visionary Trustworthy Financially rigorous Optimistic Team-oriented...

Report from Hong Kong

Posted on December 09, 2007
An initial report from Hong Kong (written in HK and in mid-air, but published from New York): If you've never been to Hong  Kong, you  should know that the Brits may be unsurpassed in their talent for choosing their colonial HQ's.  The natural strategic, mercantile, and scenic advantages of HK...

Report from Beijing

Posted on December 03, 2007
An initial report from Beijng follows. First of all, the city appears to be growing exponentially. As more than one long-time resident has told me, "it changes every day" and "although I've lived here all my life, sometimes I wake up and don't recognize it...

In Beijing & Hong Kong Next Week

Posted on November 27, 2007
I'll be in Beijing next week from Saturday 1st December through Wednesday 5th December, then in Hong Kong Wednesday 5th through Friday 7th (leaving early Saturday 8th).   This promises to be a jam-packed trip and my calendar is already quite full...

Globalization: What Feeds Your Network?

Posted on November 23, 2007
There are different ways of being a global firm, and while all may not be, ultimately, equally successful, I believe we're in a period of experimentation and exploration, unsure as an industry which global model will prove superior?and in the event there may be a variety of models each successful...