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Big Law’s Prestige Bubble Threatened by Feast or Famine Market

Sept. 17, 2020, 12:41 PM

There have been signs recently that the gap is widening between the richest Big Law firms and the rest of the pack. But the news this week—Wall Street firms unlocking war chests to boost partner pay and making splashy associate bonuses—brought that trend into sharp perspective.

Special Bonuses: It’s hard to see the majority of large law firms matching the “special bonuses” announced by some wealthy firms as a reward for an extra heavy workload during the pandemic. Unlike past episodes of associate salary wars, wealthy firms are putting the pedal to the floor at a time when many competitors are struggling to maintain the previous speed limit.

Prestige Popped: Many firms pay associates top dollar despite trailing top firms’ profitability as a message to clients that they are hiring the most talented lawyers. But that argument may have to be reconsidered against the financial realities facing firms during the pandemic. Roy Strom has more in this week’s Big Law Business column.

DAILY BRIEF

Law Firms

Milbank Paying Pandemic Bonus with 50% Boost for Some Associates
Milbank has matched the pandemic-related associate bonuses handed out by Davis Polk & Wardwell earlier this week with a further 50% payout to lawyers who have worked extra long hours during the virus crisis.

Cohen’s Mets Deal Handled by Debevoise, Davis Polk Law Firms
A pair of Manhattan-based law firms helped hedge fund mogul Steven Cohen and Major League Baseball’s New York Mets finally agree on a deal to purchase the team.

K&L Gates Remembers Bill Gates’ Lawyer Father
K&L Gates mourned the death of founding named partner William H. Gates Sr., who had a long legal career before helping his famous son build a worldwide foundation.

Business of Law

Trump’s First U.S. District Judges in California Confirmed
The Senate confirmed the first nominees to federal district courts in California under President Donald Trump, as “judicial emergencies” in the state worsen amid the coronavirus pandemic.

Lowenstein Advises NexPhase in Sale of Insurance Tech Provider
Lowenstein Sandler is advising NexPhase Capital LP on its agreement to sell Insurance Technologies LLC, which provides sales and regulatory automation solutions for the insurance and financial services industries, to Thomas H. Lee Partners.

Adelson Casino Hires Lawyer to Probe Transfers; Shares Fall
Las Vegas Sands Corp.’s Singapore casino has hired a law firm to conduct a new investigation into employee transfers of more than $1 billion in gamblers’ money to third parties, according to people familiar with the matter.

Ethics

Lewis Brisbois, Foulston Firms Disqualified in Derivative Suit
A family-owned corporation that makes road-building sweepers needs independent counsel in a derivative suit by one shareholder sibling alleging fraud and self-dealing by the others and their spouses, who are the directors, a federal court in Kansas ruled.

Follow Bloomberg Law’s global coverage of the coronavirus pandemic on our Coronavirus Outbreak channel.

WAKE-UP CALL

Firms Bill 11% Less but Show ‘Resilience': Report
In today’s column, ALSP UnitedLex said it’s investing $100 million to upgrade its cloud platform, which it says is aimed at speeding up “digital transformation” of corporate legal departments; another female lawyer who once sued her former Big Law employer for gender bias has started her own law firm; Blank Rome launched a biometric privacy team; five former Nixon Peabody partners are fighting that firm’s effort to claw back their bonuses.

PRACTITIONER INSIGHTS

INSIGHT: Adolescent Brain Immaturity Makes Pending Execution Inappropriate
The pending execution of Christopher Vialva, found guilty of murder he committed as a 19-year-old, ignores what the last 20-plus years of research has taught us about the developing brains of teenagers and adolescents, according to Dr. Jason Chein, psychology professor at Temple University. Science suggests that no person of this age should be eligible for capital punishment—regardless of personal history, intellectual capacity, eventual maturity, or the vileness of their crime, he writes.

INSIGHT: California Hits a Home Run With New Fintech Watchdog
California has created a new, beefed-up state financial regulatory agency to protect consumers. Matthew Kopko, vice president of public policy for DailyPay, says it puts tools in place for a fintech regulatory framework that matches the 21st century and eyes will be on the enforcement actions the new Department of Financial Protection and Innovation decides to take.

INSIGHT: Due Diligence is Key When Buying a Construction Operation
M&A counsel should track one of the most important assets of a construction operation during an acquisition—its contracting license. Troutman Pepper partner Marion Hack outlines key steps to include in a due diligence plan when acquiring a construction operation.

WORKFLOWS

Clark Hill has announced the addition of Randolf (Randy) Katz as a member in its Corporate Law practice, resident in Los Angeles | Dentons added Mark Califano as a partner to its Commercial Litigation practice in Washington | Norton Rose Fulbright said that corporate M&A and Private Equity partner Bryan Pointon will join the Sydney, Australia office on Oct. 1 | Bryan Cave Leighton Paisner hired Geraldine Scali as a partner to its Data Privacy & Cyber Security Practice in the London office from Sidley Austin | Hunton Andrews Kurth said former EPA Enforcement and Compliance counsel Gregory Wall joined the firm as counsel in its Environmental practice group in Richmond, VA | WilmerHale announced that litigators Susan and Kevin Muck have joined as partners in its Securities Litigation and Enforcement Practice in San Francisco

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To contact the reporter on this story: Patricio Chile in Washington at pchile@bloomberglaw.com

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