What a Law Firm Quarterly Earnings Report Would Say

Law Firms

What a Law Firm Quarterly Earnings Report Would Say

Posted Apr 23, 2008, 10:50 am CDT
By Martha Neil

Although law firms in the U.S. aren't currently allowed to sell shares to non-attorney investors, American partners are keeping a close eye on the growing number of foreign competitors that do. (Australia presently allows law firms to go public, and the United Kingdom is poised to follow in Australia's footsteps.)

If this situation changes and U.S. law firms jump on this bandwagon, too, they of course would have to file quarterly earnings reports like any other public company. And if that happens, it appears from a hypothetical Biglaw Inc., earnings report prepared by law blogger David Lat for a satirical New York Observer piece, they are either going to have to find a way to lose some of the lavish perks that characterize BigLaw life or use their attorney skills to obfuscate them in a lot of legalese.

Otherwise, shareholders' eyebrows likely will shoot up as they read excerpts from "earnings reports" like Biglaw's:

"Business conditions remain difficult,” said managing partner George Owens. “The firm is being squeezed on both ends. Clients are tired of paying $300 an hour for a junior associate who knows nothing. Meanwhile, those same junior associates demand $160,000 starting salaries, 18 weeks of paid parental leave, and Swedish massages on Fridays. Something has to give.”

Hat tip: Deal Book (New York Times).

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Posted by associate - 2 months, 2 weeks, 1 day, 16 hours ago

Indeed.

What every firm needs is a CEO that makes 200million dollars in year 1 by cutting associate pay and perks. Year two: “Uh, what happened to the revenue stream (associate billings) and why are we losing market share (clients)?”

I just see this as a bad idea, not to mention the ethics issues when you’re sure to have non-lawyers doing lawyer work because it’s now a corporation.

Although, it would probably stregthen the position of medium (30-50 atty) specialty firms still held as a partnership because of their ability to retain talent in the form of partners and associates. Many of us get into law for the possiblity of being able to control our futures. I can’t see those people being happy in Dilbert land. Hey, that’s why I actually left R&D engineering: selling off the valuable assets of the company for short term gain, the politics of Dilbert land (at least people in law firms are honest about it), and the inability to exert any control over my future.
Posted by msg - 2 months, 2 weeks, 19 hours, 30 minutes ago

Stop your whining. Law is a business and should be run like one. I don’t see engineers and doctors getting swedish massages on Fridays or getting all the perks that biglaw lawyers do. I am so sick of biglaw associates complaining about their work conditions. And biglaw partners are so fat they can’t even see their shoes!

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