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Newsletter: September, 2013
September 1, 2013
Welcome to our first official post re-brand newsletter. I know you all missed the August edition terribly. So distraught were you not to have received your usual sampling of reproduced articles preceded by my usual attempts at humour mixed with thoughtful commentary (though the two are often hard to tell apart), that I heard from exactly none of you asking “why?” or “where’s my newsletter?” I prefer to chalk that up to your careful read of our July edition where, in the name of buying ourselves a summer’s worth of leeway to iron out the inevitable technology wrinkles of our new blog and website, I explained that I would be back to you in September. Well, amazingly, September is here already and so, in the words of Jack Torrance from The Shining, I’m Baaaack.
Jack Torrance also said that all work and no play made him a dull boy. In which case, I must be very exciting. After the terrible start to our summer in Calgary, June 21st not only signaling the first day of summer but also the worst flooding in the city’s history, things slowly got back on track with Calgarians, or at least this Calgarian, doing my very best to enjoy what summer the calendar and weather gods permitted.
In the legal world, much has been written over the summer months about the shifting landscape. Some have predicted “the last days of big law” while others have said “don’t bury [it] just yet”. My own view is that there is a fundamental shift underway and there’s a new math guiding the profession. One has to divide by two theSchadenfreudian lawyer impulse of obtaining joy from the troubles of others; multiply the number of high value financings on the capital markets lately; subtract the number of lawyers taking long, slow lunches on patios under my office window along Stephen Avenue Mall; and then add the typical refrain of most lawyers when asked how they’re doing “swamped…can barely keep up” – which, tellingly, isn’t even being said as often, or at least with same conviction to which we’ve become accustom. The bottom line? There is a declining volume of work for an increasing number of lawyers who have a long-standing expectation that they will earn more this year than last and next year than this. I think that ship has sailed and my sense is that within 12 to 24 months we will look back on this period with the benefit of hindsight and reflect that it was during this time that something fundamental was taking root right under our noses.
Is it as bad as Noam Scheiber says? “Lawyers cold calling for deals”; “Partners making pitches behind the backs of colleagues with ties to a client”; “hoarding work for themselves when it requires the expertise of a fellow partner”; “seizing credit for business that younger colleagues bring in.” No. That’s called Tuesday. Is it as rosy as the rebuttal presented by Robin Sparkman? Revenues hitting all time highs; profits per partner on the rise; signs of resilience and growth abounding. Nope. There are small pockets of firms doing well but they appear to be transacting with fewer and fewer other firms and other lawyers while in-house hiring continues unabated and the brass ring of partnership steadily loses its sheen resulting in the best firms being reduced to talent incubators feeding their clients’ insatiable thirst for bright young lawyers who cost less to put on the payroll than hire by the hour. Just as there is a growing delta between the top few busy firms and all the rest, so too is there an ever-widening gap within firms between the multitude of ‘service partners’, more fungible than ever, and those few key partners who hold onto the critical client relationships. And when I say hold I mean Charlton Heston from my cold dead hands hold.
Whatever it is, a large merger, the closure of an office or the implosion of an entire firm will signal its arrival. I believe the next 12 months will see declining partner profits, reduced headcount, flat associate salaries, fewer students hired back and the continued Rise of the Client. But not all firms will experience it. Those well managed with the discipline to play good defence, hold on to key people, enter into alternative fee arrangements — no longer an “extra” a firm magnanimously offers a client out of the goodness of its heart but rather a “must have” expected by the client in order to get the work in the first place. The pendulum has swung in favour of the Partners over the Associates but an even larger one swung by the clients hangs over the firms. And it, whatever it is, is the new normal and it’s here to stay. Like Jack Torrance said, “I’m coming! You can’t get away! I’m right behind you!”
Speaking of horror movies, the men of Pekarsky Stein will be prancing around Olympic Plaza in six-inch stilettos as part of Walk A Mile in Her Shoes taking place on Thursday September 19th at noon. To donate to a great cause, the prevention of violence against women and children, please click here and give generously to the Pekarsky Stein Heel Hunters. If you wish to join our team, there’s room so please let us know!
Happy September. And sweet dreams.
Regards,
Adam
Competing in the Global Legal MarketBy: Ed Wesemann
Link: http://edwesemann.com/articles/strategy/2013/08/22/competing-in-the-global-legal-market/
Twenty years ago, the term “Globalization” was a seminar topic – today international capability is viewed by many as inherent to the practice of business law; the natural offshoot of law firms need to serve the growth of their global business clients. But the fact that a large number of law firms have substantial investments in a variety of countries around the world doesn’t mean that they have necessarily invested wisely or that globalization at this stage of development is appropriate for every firm. Read more
Saying goodbye to the difficult client: Lack of trust, second guessing and unrealistic expectations fuel breakupsBy: Meaghan O’Toole
Link: http://www.lawyersweekly.ca/index.php?section=article&articleid=1964
No matter what area of practice, every lawyer eventually comes across a certain type of client: the one with unrealistic expectations and impossible demands. Read more
20 Things 20-Year-Olds Don’t GetBy: Jason Nazar
Link: https://pekarskyco.com/20-things-20-year-olds-dont-get/
I started Docstoc in my 20’s, made the cover of one of those cliché “20 Under 20” lists, and today I employ an amazing group of 20-somethings. Call me a curmudgeon, but at 34, how I came up seems so different from what this millennial generation expects. I made a lot of mistakes along the way, and I see this generation making their own. In response, here are my 20 Things 20-Year-Olds Don’t Get. Read more
Don’t Bury Big Law Just YetBy: Robin Sparkman
Link: http://www.americanlawyer.com/PubArticleALD.jsp?id=1202612266779&Dont_Bury_Big_Law_Just_Yet
Headlines like “The Last Days of Big Law” are great—eye-catching and search engine–optimized. If only they were true. While it’s always easy to use “anecdata” and argue, loosely, that the fate of one individual firm, say, the late Dewey & LeBoeuf, is a harbinger for the industry as a whole, that’s actually not the case when it comes to big law firms.Read more
Watch Out for These 5 Onboarding Red FlagsBy: Bronwen Hundley
Link: http://www.ere.net/2013/08/06/watch-out-for-these-5-onboarding-red-flags/
You’ve just locked down the perfect candidate. You sourced and screened him; your client interviewed and loved him; you extended him an offer and he accepted – time to run a victory lap!
Revenues Up at Larger Law Firms: Large firms saw increases in 2012 while small firms struggled.By: Leigh Jones
Link: http://www.law.com/jsp/nlj/PubArticleNLJ.jsp?id=1202612599398
The revenue picture for law firms in 2012 was bright for large law firms – and bleak for smaller shops. The Survey of Law Firm Economics, a joint project of the National Law Journal and ALM Legal Intelligence, shows that at law firms with more than 150 attorneys, revenue per lawyer (RPL) rose by 8.5 percent last year. Read more
Legal Post League Tables: McCarthys and Stikemans tops for Q2 financingsBy: Drew Hasselback
Link: http://business.financialpost.com/2012/08/08/legal-post-league-tables-mccarthys-and-stikemans-tops-for-q2-financings/
It’s been a choppy year for deals, and law firm’s capital markets financing business definitely hit some rough patches during the second quarter, our league tablesreveal.
Canadian law firms advised issuers on 152 debt and equity financings valued at a total of $19.34-billion during the second quarter of 2012, according to data collected by Infomart. That was down from 176 deals worth a combined $20.04-billion in the same period of 2011.Read more
The Last Days of Big Law: You can’t imagine the terror when the money dries upBy: Noam Scheiber
Link: http://www.newrepublic.com/article/113941/big-law-firms-trouble-when-money-dries
Of all the occupational golden ages to come and go in the twentieth century-for doctors, journalists, ad-men, autoworkers-none lasted longer, felt cushier, and was all in all more golden than the reign of the law partner. Read more
Algorithmic Lawyering: Insurance companies well placed to lead the next wave of decision-makingBy: Geoffroy Pavillett
Link: http://www.lawyersweekly-digital.com/lawyersweekly/3313?sub_id=w8XYB1ce1a1k&folio=14#pg15
Algorithmic lawyering can now allow the decisions of lawyers and adjudicators to be replaced by software programs. The concept is simple, revolutionary, and less of a futuristic fantasy now that an IBM machine can beat Jeopardy’s top human contestants. However, because lawyers are the container of the legal system, they inevitably focus more on debating legal content than on questioning the legal profession’s primacy as its container. Indeed, while most lawyers see technology as a productivity tool, outsiders may seek to use it to gradually replace us (at least partially, like postal workers or phone operators). Read more
Finding common ground: Sharing office space a popular option, given the right fitBy: Kim Arnott
Link: http://www.lawyersweekly.ca/index.php?section=article&articleid=1950
When the photocopier runs out of toner, the receptionist quits or the hydro bill needs to be paid, Marcy Segal doesn’t give it a second thought. As a tenant renting space on a floor full of lawyers in a downtown Toronto office building, the minor details and daily headaches of running an office simply aren’t her problem. Read more
Working with Different GenerationsBy: Joan Newman
Link: http://www.altmanweil.com/Generations/
Most law firms, in-house counsel, and other legal employers have four generations of lawyers working together, and each generation has differing views on career development, motivation, loyalty to the employer, client relations, communication styles, interactions with peers, and work life balance. The generations are different because of their life experiences and each generation’s perspective is important, credible, and relevant to them. For example, if you ask a traditional or baby boomer partner about younger associates who work with them, you will most likely hear grumblings about the associates’ lack of work ethic and their sense of entitlement. From the younger generation’s perspective, the older lawyers seem “out of step” with the world, have this “pay your dues” mentality, and a work ethic that compromises relationships with family and friends. These generational differences cause significant challenges for law firm management, and managing partners readily admit that generational differences are impacting everything in the law firm. Read more
On a clothesline under the sun, one firm’s flood recovery starts: Worst off in river valley deal with waterlogged files, damaged officesBy: Geoff Kirbyson
Link: http://www.lawyersweekly.ca/index.php?section=article&articleid=1940
As the surprise flood that brought Calgary to a standstill in late June receded, the staff at Balbi & Company Legal Centre carefully hung water-logged items out to dry on a makeshift clothesline.
But this seemingly traditional scene had one unusual element. Instead of hanging up T-shirts, sheets or pants, the clothespins were being applied to clients’ last wills and testaments.Read more
THE AMPERSAND 
