By the Numbers: The Big Law Stories That Mattered Most in 2020

The year has been unlike any other in recent memory for the legal industry, which wrestled with uncertainty in the market not seen in decades—or, in some cases, ever.

The coronavirus pandemic and a turbulent economy posed plenty of challenges and at least a few opportunities for the country’s largest law firms. Bloomberg Law helped readers understand how the legal industry navigated the pandemic, from pay cuts and layoffs to partner poaching and promotions.

Here are some of the year’s biggest stories, as told by the numbers.

-$37.63

The price of a barrel of oil hit -$37.63 in mid-April, a sign of the difficult times ahead for U.S. shale oil producers. The industry had sparked a boom in the Houston legal market, where lawyers voiced concern that even they were in oversupply.

48

As the Covid-19 outbreak forced businesses across the country to close earlier this year, a big question mark hung over the heads of law firm leaders as to how the economic impact from the pandemic would affect their bottom line.

Forty-eight of the 100 largest firms in the U.S. made equity partner payment reductions or delays, attorney and staff pay cuts, furloughs, or other moves to cut costs and shore up cash to weather the economic storm. More than half a year later, many rolled back cuts as the economic fallout from the pandemic proved to be less severe for those firms than originally feared.

50%

Global merger and acquisitions activity fell dramatically over the first half of 2020, dropping from $1.9 trillion in 2019 to just $1.1 trillion in the first six months. Transactional volume for the second quarter fell to its lowest point since 2004.

As the year ticked on, deal activity started to bounce back. The technology sector was a particular bright spot, driving $467.4 billion in deals in 2020, up 17% from last year.

Special purpose acquisiton companies, an alternative to a traditional IPO, have also been a bright spot for law firms. The “blank check” companies raised roughly $30 billion through the first eight months of the year, more than double last year’s $12.4 billion.

$235 million

The coronavirus pandemic’s devastating effects on large company balance sheets have paid off for law firms, which made nearly $235 million over the first half of the year on the biggest bankruptcy cases. That’s nearly double the amount of cash that firms hauled in for the same type of work in all of 2019.

Kirkland & Ellis, has dominated the competition this year for work in bankruptcies filed by large public companies. At mid-year the firm had represented 15 of 33 of these companies—including J.C. Penney, Neiman Marcus, and Pier 1 Imports—earning more than $145 million in fees for its work prior to those companies’ bankruptcy filings.

30,000

About 30,000 would-be lawyers signed up to take online bar exams in New York, California, and 16 other states in early October. Amid health and safety concerns in the wake of the Covid-19 outbreak, in-person bar exams were canceled, rescheduled, and shifted online across the country.

The moves sparked security, privacy and other concerns for test takers. The results of those tests have painted a mixed picture. New York’s passage rate jumped to 84% for the October exam, but the total number of people who sat for the state’s test dropped by half.

165

That’s how many years Wall Street firm Davis Polk & Wardwell has been in business. The firm announced in September that it would alter a long-held pay policy, moving to a modified lockstep compensation structure for its partners. The change gives Davis Polk flexibility to pay more competitive lawyer salaries amid an increasingly competitive market for top talent.

Davis Polk was one of the last bastions of the strict-lockstep pay model. The seniority-based compensation system has been under stress from firms that can tempt potential recruits with higher compensation earlier in their career.

$40,000

Davis Polk made waves in the industry again in the fall, announcing it would be rewarding its associates for hard work during the pandemic with special bonuses ranging based on seniority from $7,500 to $40,000.

Several of the nation’s top firms quickly matched. Others waited until the traditional year-end bonus season, which saw senior associates take home a total of nearly $140,000 at the top firms, including Davis Polk, which added the a traditional year-end bonus to its associates’ annual haul. Some in-house lawyers have expressed concern that they will eventually be asked to pick up the tab for these payouts in the form of higher bills.

145

Kirkland & Ellis in October welcomed its largest-ever partner class, 145 lawyers. But members of the new class aren’t partners in the traditional sense. These non-share partners don’t get a piece of the firm’s annual profit pool. Only a small percentage of them will make it to equity partner.

Kirkland isn’t the only law firm to have a non-share rank, but it’s arguably the most successful. The firm generated more than $4 billion in 2019, according to AmLaw data.

50+

That’s the number of partners that have left the litigation powerhouse Boies Schiller Flexner in 2020. The firm founded by storied trial lawyer David Boies hit choppy waters following scrutiny of Boies’ involvement with disgraced Hollywood mogul Harvey Weinstein and defunct health tech company Theranos Inc.

In late 2019, the firm named new top brass to work alongside Boies and Jonathan Schiller, but the change did not stem a tide of departures. Lee Wolosky and Dawn Smalls left the firm to join Jenner & Block in February, a 13-lawyer group from Boies Schiller joined King & Spalding in April, and Karen Dunn and Bill Isaacson, a litigation duo who have represented Apple, Oracle, and Facebook decamped for Paul Weiss in June. As 2020 drew to a close, newly named co-managing partner Nick Gravante jumped ship for Cadwalader Wickersham & Taft.