Law firm leaders are failing to make the changes necessary to effectively manage their enterprises under today’s conditions, according to a new survey by consultant Altman Weil.
While firm managers recognize shifts in the business of law, including pricing pressures prompting a need to deliver legal services more efficiently, they’re too slow to take action, according to the survey of 238 leaders.
“Most firms appear to be reacting to external forces and making incremental changes within the framework of the existing business model, rather than pursuing opportunities to meaningfully differentiate their firms in the eyes of clients,” the law firm consultant said in an analysis of the survey.
Of those surveyed, 96 percent said the need for greater efficiency is a permanent change in the law firm landscape. Just 45 percent reported having made changes to provide services with enhanced efficiency.
For the “Law Firms in Transition” survey, published for the fifth year, 37 percent of the respondents came from the biggest 250 U.S. law firms. All the firms surveyed have more than 50 lawyers.
While more than 80 percent of the firm leaders said price competition and non-hourly billing are permanent changes, only 29 percent have changed their strategic approach to pricing. Firms have been offering clients discounts from 21 percent to as much as 40 percent to deal with price pressures.
“Discounting is not a strategy,” Tom Clay, an Altman Weil principal and author of the survey, said in a statement. “In fact, it undermines the idea of value and it’s a margin killer.”
The survey also indicated that firm leaders’ priorities aren’t in the right place. They said increasing revenue was the greatest challenge they face in the next two years. Also at the top of the list was generating new business, firm growth and profitability. Delivering value to clients was No. 8 on the list while improving efficiency was ranked 11th.
“This is very troubling,” Clay said in the statement. “Law firms that do not put client needs at the top of their priority lists and align themselves with those needs misunderstand what are driving the forces of change in the legal market in 2013.”
The survey recommends that firm leaders better educate partners in order to affect change, align the firm’s interests with clients’ and adhere to long-term strategic changes rather than quick fixes.
Kramer Levin Names Spilko Co-Chair of Corporate Practice
Kramer Levin Naftalis & Frankel LLP named Howard T. Spilko co-chairman of the corporate practice alongside Thomas D. Balliett and Scott S. Rosenblum. The three will lead the firm’s 70-lawyer corporate group together.
Spilko has experience in domestic and cross-border mergers and acquisitions, joint ventures and alliances, and general corporate matters. He has also been a member of the firm’s executive committee. Spilko’s clients include BlackRock Inc. and American International Group Inc. on M&A and joint venture matters and Perella Weinberg Partners LP on investment matters, according to his firm biography.
“Howard is an exceptional adviser to his clients on a wide range of corporate matters and an established leader at the firm,” Paul Pearlman, Kramer Levin’s managing partner, said in a statement. “He’s a perfect fit to join the other two co-chairmen in providing creative, strategic guidance that will ensure the continued success of our corporate group.”
Kramer Levin has lawyers at offices in New York, Silicon Valley and Paris.
King & Spalding Recruits MacVay to Start London Practice
King & Spalding LLP established a London trade practice with the addition of partner Iain MacVay, previously of Bird & Bird LLP, where he was head of international trade and customs for Brussels and London.
MacVay has advised on international trade matters for more than two decades. He has experience in challenging tax and regulatory barriers under World Trade Organization rules and other international trade agreements, the firm said in a statement. He also represents clients in relation to intra-European Union trade matters.
MacVay has been particularly active in representing the alcoholic beverages, pharmaceutical and petrochemical industries before the WTO, EU institutions and trade authorities, according to King & Spalding.
“Iain is a leading expert on WTO dispute settlement, market access and regulatory matters and he provides further reach and depth to our international trade group,” Stephen Orava, leader of King & Spalding’s international trade practice group, said in a statement. “His experience of U.K. and European trade matters will bring new resources to our global practice and create an important axis with our Washington, D.C., and and Geneva offices.”
King & Spalding has 800 lawyers at 17 offices in the U.S., Europe, the Middle East and Asia.
Derivatives Lawyer Matthew Kluchenek Joins Baker & McKenzie
Matthew Kluchenek joined Baker & McKenzie LLP in Chicago as a partner and will lead the firm’s North American derivatives practice. He was previously a partner at Schiff Hardin LLP.
Kluchenek advises proprietary traders, financial institutions, hedge funds, commodity pools, trading advisers, CFTC registrants, end-users, exchanges and other clients on the regulation of derivatives under the Commodity Exchange Act and the CFTC’s rules, as well as the regulation of securities under federal securities laws, the firms said in a statement.
“As our clients utilize derivatives to hedge against exchange rate, interest rate, commodity price or other risks, they are looking for counsel with capabilities in the U.S. and the U.K. to make sure these instruments are optimally designed and executed,” David Hackett, chairman of the North American banking, finance and major projects practice, said in a statement. “Matt adds depth to our U.S. team, and I know clients will value his insight and experience.”
Baker & McKenzie has more than 4,000 lawyers at 72 offices in 45 countries.
Mayer Brown Adds to Banking and Finance Practice in Charlotte
Mayer Brown LLP said Lawrence V. Berkovich joined the firm in Charlotte, North Carolina, as a partner in the banking and finance practice. Previously, he was a counsel with Dechert LLP.
Berkovich concentrates his practice on complex structured finance transactions, with an emphasis on broadly syndicated and middle-market collateralized loan obligations, the firm said in a statement. Berkovich has experience with derivative products; revolving, delayed draw and principal-protected tranches; and federal securities laws.
Mayer Brown has lawyers at offices in the Americas, Asia and Europe.
Judge Paul J. Vichness Joins Mandelbaum Salsburg
Former Essex County Business Court Judge Paul J. Vichness joined Mandelbaum Salsburg Lazris & Discenza PC’s alternate dispute resolution department. He was also the conflict judge for general equity at the court.
Vichness will focus his practice on mediation arbitration and be a discovery master in civil matters, with an emphasis on commercial and complex cases, the firm said. He was appointed to the Superior Court in 1995.
Mandelbaum Salsburg has lawyers at six offices in New York, New Jersey and Florida.
Gupta Challenges Insider Conviction and U.S. Wiretaps
Former Goldman Sachs Group Inc. director Rajat Gupta asked a federal appeals court to overturn his insider-trading conviction, with his lawyer arguing that prosecutors shouldn’t have been allowed at his jury trial to use secretly wiretapped calls in which he wasn’t a participant.
Defense lawyer Seth Waxman, of Wilmer Cutler Pickering Hale and Dorr LLP, also told a panel of three judges on the U.S. Court of Appeals in New York that the defense was hindered by not being able to put on testimony from the defendant’s daughter about his state of mind before the alleged 2008 crimes. Waxman said Gupta was prevented from presenting evidence that he’d been swindled by his friend and business partner, fund manager Raj Rajaratnam, to whom he was accused of giving illegal tips.
Gupta, his wife and four daughters all attended yesterday’s hourlong hearing.
Three days before Gupta allegedly provided inside information about Goldman Sachs to Rajaratnam, the Galleon Group LLC co-founder, in September 2008, Gupta told his daughter Geetanjali he had discovered that Rajaratnam secretly withdrew $25 million from a fund which both men had invested in, Waxman said. The lawyer told the appeals court that conversation should have been presented as evidence.
“Mr. Gupta told her that he’d come to believe that Mr. Rajaratnam had cheated him out of millions of dollars,” said Waxman, who was U.S. Solicitor General under President Bill Clinton.
“That testimony could have powerfully refuted the government’s theory on motive and timing,” Waxman said, adding that it could have provided “an innocent explanation for the telephone calls in question.”
Gupta, 64, who was a managing partner at McKinsey & Co., and a director at Procter & Gamble Co., was convicted in June of one count of conspiracy and three counts of securities fraud. He was accused of passing illegal information about New York-based Goldman Sachs to Rajaratnam.
Waxman and defense lawyer Gary Naftalis said jurors got a “distorted picture” in which Rajaratnam’s statements to Galleon employees couldn’t be refuted by Gupta. They called Rajaratnam’s comments on the wiretaps “the self-serving hearsay of a known fabulist beyond Gupta’s powers to cross-examine.”
The case is U.S. v. Gupta, 12-4448, U.S. Court of Appeals for the Second Circuit (Manhattan).
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Obama Names 10 to Commission for Improving Election Process
Two veteran election lawyers, Bob Bauer of Perkins Coie LLP and Ben Ginsberg of Patton Boggs LLP, were named co-chairmen of the Presidential Commission on Election Administration, according to a White House statement.
Bauer was counsel to President Obama’s re-election committee. Ginsberg was campaign counsel to Republican presidential nominee Mitt Romney.
Commission members also include Joe Echevarria, Deloitte LLP’s chief executive officer. Along with Echevarria, the members Obama appointed yesterday include Brian Britton, a vice president of global park operations for Walt Disney Co.; former Kentucky Secretary of State Trey Grayson, who lost the 2010 Republican Senate primary to Rand Paul and is now director of the politics institute at Harvard University’s Kennedy School; Larry Lomax, a county registrar in Nevada, home state of Senate Majority Leader Harry Reid; and Christopher Thomas, director of elections in Michigan and a former Federal Election Commission official.
The other members are Michele Coleman Mayes, vice president and general counsel for the New York Public Library and a former assistant U.S. attorney; Ann McGeehan, assistant general counsel of the Texas County and District Retirement System and former director of elections in the Texas Secretary of State’s office; and Tammy Patrick, federal compliance officer for the Maricopa County, Arizona, Elections Department.
Obama formed the commission in March after saying in his State of the Union he would look for ways to shorten lines, improve election efficiency and provide better access at polls.
Crime Novelist Wins $51 Million From Accounting Firm
Joan Lukey, partner at Ropes & Gray LLP, talks with Bloomberg Law’s Spencer Mazyck about her successful representation of best-selling crime writer Patricia Cornwell in a highly publicized lawsuit accusing the author’s accounting and business management firm Anchin, Block & Anchin LLP of mismanaging her finances.
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Sullivan & Cromwell’s Aquila Says Tech ‘Hot’ for M&A
Frank Aquila, a partner at Sullivan & Cromwell LLP, discusses Yahoo! Inc. buying blogging network Tumblr Inc. for about $1.1 billion. Aquila talks with Bloomberg’s Pimm Fox and Carol Massar on Bloomberg Radio’s “Taking Stock.”
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