Category: News Feeds

At any given time, healthcare in-house counsel have a lot on their plates. This includes, but is not limited to, negotiating contracts as part of the broader consolidation trend in healthcare, adapting to regulatory changes from the FDA and HHS, managing data privacy and cybersecurity issues, and weighing in on an array of medical ethics issues.

But the public health crisis that has emerged with the rise of Covid-19’s impact on the U.S. has added to healthcare in-house counsel priorities in dramatic ways.

Werner Boel, a senior partner with executive recruiter Witt Kieffer in its Atlanta office, said even before the public health crisis the role of the in-house counsel for hospitals and health systems was evolving.

“They need to be a strategic business partner to navigate partnerships with other institutions, such as facilitating acquisitions, working with third parties for population health management, helping hospitals improve access to care for underserved patient populations, and negotiate regulatory hurdles.” 

It was a point emphasized by Lauren Rowinski, Virtua Health General Counsel.

“You have to have a business acumen to be an effective legal partner.  Look at the impact of reimbursement for commercial and government payers. You could be a fantastic lawyer but you must have a solid understanding of your clients’ business in order to be an in-house attorney who can help your organization advance its strategic objectives.

“I was so impressed with our operational leaders’ roll out of telehealth from our Access Center,” said Rowinski. “Our patient scheduling center became the central focus. It was very important to further expand our telehealth services for both Covid-19 and non Covid-19 related cases. Although the Legal Team helped with matters such as reimbursement issues, the real heroes were the ones who set this up and expanded the services in such a quick period of time.”

AI in healthcare and its push to automate tasks has been a major issue in healthcare because it poses myriad questions on data collection, such as data privacy, cybersecurity, reliability, and how best to integrate these tools. And then the Covid-19 public health crisis came along and in-house counsel priorities shifted immediately in ways they never have before.

Boel noted that in a recent conversation with a GC, they were addressing a request from the state’s governor to make ventilators available to other parts of the state. GCs are providing advice to their CEOs on numerous Covid-19 matters that span addressing PPE and ventilator shortages to scaling telemedicine and telehealth capabilities across their health systems. Another related issue all GCs have to contend with: How to restart their elective procedures and other non-Covid-19-related operations so they can generate revenue at the levels they did before this public health crisis began.

Digital health integration poses challenges for any hospital but health systems were forced to scale telemedicine and remote patient monitoring capabilities in a matter of weeks to prevent non–emergency patients coming for in-person appointments. That switched the work of healthcare in-house counsel into overdrive. 

Rowinski noted some of the short– and long–term consequences of digital health integration and adoption for hospitals.

“Digital health technologies and transformation are so important and Legal has to have a seat at that table to understand the strategies as they are developing in order to, in real time, help the organization with regulatory requirements as well as weigh the risks because they have not yet been fully defined. The government agencies are issuing guidance but they don’t have all the answers either.”

Like many teams within businesses, in-house counsel have had to find new ways of engaging with each other to stay connected. Rowinski said her group has had to change the way they do business as a result of the Covid-19 health crisis. But like other in-house counsel teams, they have had to think about how best to deploy their staff in a way that allows their organization to pivot quickly in uncharted challenges for the health system. That can be tough when almost everyone is working remotely. For example, the Legal Team has streamlined legal contract reviews to reduce going back and forth with vendors.

At the Medical College of Wisconsin, (MCW) delivering medical education poses some challenges in a public health crisis but Jack Newsome, the general counsel, described his institution as one that’s well-prepared to meet them. The pandemic got underway almost as soon as the institution had completed a land transaction to acquire the property MCW and its physician practices had leased from the county for years. 

“We’re completely changing our business model on the education side. We were lucky because we have two remote campuses,” Newsome said. “We were already providing remote education with tele-education.”

Newsome noted that much of MCW’s content was already in a format that could be easily adapted to a tele-education setting. They just had to adapt to testing in that environment. So MCW should be well positioned if it decides to continue online learning through the Fall.

He acknowledged that halting elective procedures, a critical source of revenue, has created a significant financial burden for most healthcare organizations, including the Medical College of Wisconsin. The question all healthcare organizations face is, how do they restart? 

At the Baycare Health System in the greater West Central region of Florida, Scott Kizer, Baycare Chief Legal Officer, said regulatory compliance is a number one priority. Contract compliance is also a high priority.

Prior to the pandemic, one area of focus for Kizer was supporting the health system’s goal of expanding its service delivery model throughout its market area to better meet the needs of the community and the changing healthcare landscape. It also launched its own Medicare Advantage insurance plan in 2019.

With the rise of Covid-19 cases, the health system has turned its attention to increased testing capabilities, securing necessary staffing, and providing safe and compassionate care while preparing for the seasonal influx of residents at a time when health systems likely will be contending simultaneously with both the flu and Covid-19. Baycare has also ramped up its existing telemedicine offering to provide convenient access to high-quality care through a mobile app accessible with a smartphone or other digital device.

Rowinski, Newsome, and Kizer each said they have worked with regional organizations so they can gain insight and support from neighboring institutions and help each other when they face other crises in the future. Kizer noted he checks in with a group of 20-30 general counsel to share lessons learned since the pandemic started.

Although the path forward will be different for each of these institutions, it is undeniable that general counsel have gained considerable insights into navigating the Covid-19 pandemic that will shape their health systems for the foreseeable future.

Photo: Getty,Yuri_Arcurs

Sports and entertainment attorney Darren Heitner joins Joe and Kathryn to talk about sports and the law in the age of COVID. Conference contractual agreements, declining TV ratings, bubbles, season tickets, occupancy limits, business interruption insurance — the pandemic has created all sorts of havoc for practitioners in this space.

The excitement over COVID appreciation bonuses is just getting started!

Cooley got the COVID appreciation bonuses ball rolling earlier this week. But Davis Polk did not come to play, and they wowed with more money and others have matched that more generous scale.

It remains to be seen exactly which firms will pony up the cash to meet the top of the market, but we have at least a partial answer: Irell is in. The West Coast firm announced last night that they would be offering associates a special bonus, between $7,500 and $40,000, depending on class year. They’re payable September 30, and yes, they are in addition to, not instead of, any end-of-year bonus.

You can read the firm’s full announcement on the next page.

Please help us help you when it comes to bonus news at other firms. As soon as your firm’s bonus memo comes out, please email it to us (subject line: “[Firm Name] Bonus”) or text us (646-820-8477). Please include the memo if available. You can take a photo of the memo and send it via text or email if you don’t want to forward the original PDF or Word file.

And if you’d like to sign up for ATL’s Bonus Alerts, please scroll down and enter your email address in the box below this post. If you previously signed up for the bonus alerts, you don’t need to do anything. You’ll receive an email notification within minutes of each bonus announcement that we publish.

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Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

One by one, Biglaw firms that introduced austerity measures in the spring due to the coronavirus crisis are now reversing them, but in some cases, the news isn’t all good. When announcing salary cut reversals, some firms have managed to slip in news about layoffs in the same breath.

Back in April, Seyfarth — a firm that posted $717,370,000 gross revenue in 2019, earning it the 60th place on the latest Am Law 100 ranking — rolled out firmwide cost-cutting measures effective May 1, ranging from salary cuts to furloughs of attorneys and staff. Equity partners reduced their monthly draws by 20 percent, all U.S. lawyers had their pay reduced by 10 percent, and staff salaries were cut up to 10 percent based on earnings. The firm also furloughed 10 percent of its U.S. employees, and at the time, sources told us that 180 staff and 50 attorneys were taken out of play.

Today, the firm is announcing not only the reversal of its salary cuts, but the layoffs of some of those who were furloughed — including attorneys.

Here’s a statement from Pete Miller, Chair and Managing Partner of Seyfarth Shaw:

Over the last few months, we have faced incredible challenges, but we have been quick to adapt, supporting each other and responding to our clients’ needs while implementing a series of necessary economic measures to ensure the firm’s success moving forward. Our targets have shifted, but with hard work, our firm’s performance has exceeded our revised forecast. As a result, effective October 1 and going forward, we will be returning all staff to their full 2020 salaries and restoring attorney compensation. In addition, we have been able to bring back some of our furloughed employees.

However, we have also had to make the difficult decision that some staff and a small number of attorneys who were furloughed in April will not return. The affected employees will be provided severance packages, including a minimum of two months of severance, regardless of how long they have been with the firm. The remainder of those furloughed will stay on furlough until the end of the year, at which time we will revisit their status. We will continue to pay their health insurance premiums and will bring them back sooner if the needs of our clients and the firm support it.

Miller continued, noting that the decision to let go some of the staff and attorneys who were furloughed was “largely a result of underutilization” due to the way work changed during the pandemic and the way the firm will work in the future. “Decisions like these that impact our colleagues are never easy to make. This has been an extremely difficult time, and we are grateful for the resilience and dedication our firm has shown in the face of extreme circumstances,” he said.

Best of luck to all those who are affected by the layoffs at Seyfarth.

If your firm or organization is slashing salaries or restoring previous cuts, closing its doors, or reducing the ranks of its lawyers or staff, whether through open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. Our vast network of tipsters is part of what makes Above the Law thrive. You can email us or text us (646-820-8477).

If you’d like to sign up for ATL’s Layoff Alerts, please scroll down and enter your email address in the box below this post. If you previously signed up for the layoff alerts, you don’t need to do anything. You’ll receive an email notification within minutes of each layoff, salary cut, or furlough announcement that we publish.

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Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

There’s a lot out there about the racist history of facial recognition algorithms. Academics have noted that the technology rests on systemic racist assumptions, a 2019 government study confirmed it, and states are looking into banning it. But for thousands of soon-to-be attorneys across the United States, this technology will decide whether or not they’re cheating on their bar exams in a couple weeks. What can possibly go wrong?

This applicant isn’t alone. A California applicant also recently posted the same problem:

This isn’t a new problem. Victoria Hudgins covered this back in August when we were dealing with Michigan’s effort to deploy this technology and detailed the absurd and inexcusable additional burden this is placing on non-white applicants:

Taylor, who is Black, has readjusted her studying tactics to prepare to be observed by ExamSoft’s facial recognition tech.

“It’s going to affect my preparation for the bar. I will be far more conscious of my face as I study,” she said. She’s practicing for her exam under different conditions, such as foregoing glasses for contacts, practicing under perfect lighting and other scenarios.

“I don’t want to be flagged for cheating, and I would want to prepare properly,” she added.

But in the intervening month and a half, the software hasn’t gotten much better. Probably because they’re still trying to figure out if they can make desktop computers work.

When I spoke with diploma privilege advocates earlier this summer, we discussed the possibility that the ExamSoft system may violate California city ordinances banning the use of the technology for a number of applications. But even if those specific ordinances don’t apply, there’s ample cause for state and local officials to get involved when we have a state-sponsored entrance exam discriminating against people on the basis of race. I think there’s, like, an Amendment about that or something.

The ILG online exam experience was… not good. But the appeal of the ILG model was the commitment to live proctoring. Actual human beings would be watching over the test takers in the same way they would at an in-person location. By contrast, ExamSoft uses an algorithm to watch everyone which alleviates the technical hurdle of simultaneously routing thousands of feeds to remote proctors, but introduces all the rest of the racist baggage from facial recognition tech.

It also can’t deal with diabetics, but that’s another article.

There will be a day when facial recognition technology is useful and reliable, but it’s gotten way out ahead of itself. This is the stage where facial recognition developers should be futzing around with whether or not you need a password to update Candy Crush, not forming the basis of no-knock warrants. And somewhere in between those applications is “gatekeeping the legal profession” but it’s a lot further from the former than it needs to be.

Earlier: Bar Exams’ Facial Recognition Deployment Is Heightening Test Takers’ Anxiety

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Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

Over the last 24 hours, we’ve gotten a number of tips from irate California bar examinees who are experiencing a revolutionary new approach to customer service of “just ignoring the customers.” This may come across as a complete failure of service, but consider that applicants are now less angry about their glitching and crashing professional exams and more angry at the seemingly indifferent public officials who are supposed to be helping them. It’s an impressive act of redirecting negative energy!

There are increasing issues with Examsoft and just getting the MOCK exams uploaded for the CA bar. Examsoft WILL NOT even take calls – just says “due to higher than normal call volume, we can not take your call at this time, goodbye!” On-line chat help feature doesn’t work either.
It is so bad, CA BAR THROUGH TWITTER!! announced that we now have a deadline to upload the Mock exams of Sept. 23rd.
It is really getting bad out here (although I imagine it’s like this elsewhere).
Maybe some press will get CA Bar to wake up to this clusterf**k??

This underscores how difficult this strategy really is. In an ever more connected world, it’s not enough to have an interminable hold line. The illusion of availability required to pull this off mandates broken phone lines and crashing online chats and complete radio silence from all social media avenues. It takes a lot to be this detached!

Seriously though, this is a great point. This isn’t just a stress test of the crapnado of problems arising with the software right now, but a stress test of the bar examiners’ ability to address concerns that may arise mid-exam.

And the results aren’t looking great.

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Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

Biglaw prestige is what economists (or law-and-econ types) would call “sticky,” i.e., resistant to change.

(Why is this the case, and is it a good or bad thing? For a detailed discussion, see this excellent post by the always insightful Joe Borstein — who will be interviewing me over at Litera.tv at 12 p.m. today.)

If you question the stickiness of Biglaw prestige, just take a look at the new Vault 100 ranking of the most prestigious law firms in America, which Vault issued last week. Let’s start with the top 10:

1. Cravath, Swaine & Moore (no change)
2. Skadden, Arps, Slate, Meagher & Flom (+1)
3. Wachtell, Lipton, Rosen & Katz (-1)
4. Sullivan & Cromwell (no change)
5. Latham & Watkins (no change)
6. Kirkland & Ellis (no change)
7. Davis Polk & Wardwell (no change)
8. Simpson Thacher & Bartlett (no change)
9. Gibson Dunn & Crutcher (no change)
10. Paul, Weiss, Rifkind, Wharton & Garrison (no change)

Eighty percent of the top 10 firms stayed in exactly the same place as last year — and that’s not unusual. The general rigidity of the Vault rankings, especially near the top, is why Wachtell Lipton and Skadden Arps trading the #2 and #3 spots, to Skadden’s advantage, constituted “historic drama,” to quote Staci Zaretsky.

Until this year, the #1 and #2 spots went back and forth between just two firms, Wachtell Lipton and Cravath, this year’s #1. Cravath has occupied the top spot since the 2017 Vault rankings, when it ended Wachtell’s 13-year reign at the top. (June 2016, when those 2017 Vault rankings came out, was also the month in which Cravath announced the $180K pay scale — but Cravath’s taking the #1 spot can’t really be attributed to gratitude from Biglaw associates for the pay raise, since the surveys used for calculating the 2017 rankings were completed much earlier in 2016.)

And it’s not just the top 10. Looking at the entire ranking of 100 firms, only 34 firms moved two or more spots in either direction — meaning that two-thirds of the firms in the Vault 100 either saw no change in ranking or went up or down by just a single spot (at least by my count; please correct me if I’m wrong).

There’s enough gloomy news out there in the world right now, so for purposes of today, let’s look at the positive side of the ledger: the biggest gainers in the 2021 Vault 100 rankings. Here are the 17 firms that moved up by two or more spots this year, ranked by the size of their jump (with the two newcomers listed at the end):

• Mintz (+10, from #96 to #86)
• Goodwin (+7, from #37 to #30)
• Willkie (+7, from #51 to #44)
• Perkins Coie (+6, from #49 to #43)
• Vinson & Elkins (+5, from #63 to #58)
• Holland & Knight (+5, from #64 to #59)
• Fenwick (+5, from #78 to #73)
• Cooley (+4, from #28 to #24)
• Faegre Drinker (post-merger) (+4, from #95 to #91)
• Winston & Strawn (+3, from #43 to #40)
• Greenberg Traurig (+3, from #56 to #53)
• Norton Rose (+3, from #66 to #63)
• Davis Wright (+3, from #90 to #87)
• Foley Hoag (+3, from #98 to #95)
• Sheppard Mullin (+2, from #74 to #72)
• Troutman Pepper (post-merger) (from not ranked to #81)
• Gunderson Dettmer (from not ranked to #90)

What can we say in general about these firms? The Vault Law Editors made this observation:

The 2021 Vault prestige rankings saw the rise of West Coast firms—more than one-third of firms that moved up two or more spots in the Vault Law 100 were based in either California or Washington state: Cooley LLP (No. 24); Perkins Coie LLP (No. 43); Sheppard, Mullin, Richter & Hampton LLP (No. 72); Fenwick & West LLP (No. 73); Davis Wright & Tremaine LLP (No. 87); and Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP (No. 90).

I would expand upon this observation by noting that many of the firms with the most momentum, at least as reflected in the Vault rankings, are forward-looking and future-focused, no matter where they are located. They tend to be strong in growing and vibrant sectors like technology, life sciences, and healthcare. This is true of the West Coast firms mentioned by the Vault editors, but it’s also true of some of the firms on the list that did not originate on the West Coast — like Mintz and Goodwin, both Boston-founded firms, but known across the nation (and beyond) for their expertise in healthcare and life sciences.

The Vault Law Editors gave a special shout-out to Cooley, noting that “[i]n addition to its Top 100 jump, the firm also launched seven spots in the New York regional ranking to settle at No. 33 and moved into the top 30 in the Washington, DC, ranking.” And this isn’t the first year in recent memory that has been good for Cooley. In 2014, for example, Cooley climbed 10 spots, more than any other firm, to break into the top 50. Now, just six short years later, Cooley is a top 25 firm.

And I’d expect Cooley to continue climbing next year. Associates tend to reward compensation leaders when filling out Vault surveys; last year, for example, after leading the way to $190K, Milbank jumped 15 spots and entered the top 25. So Cooley, which just led the way in announcing both “appreciation bonuses” and 2020 year-end bonuses that won’t be lower than 2019 year-end bonuses, should be shown some love by associates filling out Vault surveys next year. (Even if Cooley’s scale was subsequently exceeded by other Biglaw firms, like Davis Polk and Milbank, as well as elite boutiques, like Hueston Hennigan, it’s not clear that any of these other firms would have acted if Cooley hadn’t kicked things off.)

So that’s a look at the Vault 100 rankings from the firms’ perspectives. What do these rankings mean for associates who work at these firms?

In general, the more prestigious firms enjoy higher profits per partner, for those who make partner, and better exit opportunities (including in-house opportunities), for those who don’t make partner. So if you’re a star associate in a busy practice area, working long hours for lower pay at a firm that’s lower down on the prestige totem pole, you might want to consider lateraling to a firm that’s more prestigious and pays top-of-the-market compensation.

If you’re a star associate at a Vault 100 firm who’s interested in an “upgrade” in terms of pay, prestige, and exit options, please feel free to reach out to me by email at dlat@laterallink.com. In a time when some firms are paying mid-year bonuses while other firms are cutting compensation, the difference between the Biglaw haves and have-nots is only growing — and you want to be on the right side of that divide.

P.S. Biglaw prestige might not change much, but it seems that everything else in our world is changing, and quite rapidly at that. To learn about “change management” — defined as “the process, tools, and techniques used to manage the human side of change for the achievement and sustainment of a desired business outcome” — and how it can help you and your organization navigate these tumultuous times, please register for this free webinar I’ll be moderating next week. It will take place this coming Tuesday, September 22, and it features an impressive panel of general counsels, chief executive officers, and other leaders. Hope to see you there!

2021 Vault Law 100 [Vault]
Introducing Vault’s 2021 Top 100 Law Firms! [Vault]

Earlier: Vault 100 Rankings: The Most Prestigious Law Firms In America (2021)

Ed. note: This is the latest installment in a series of posts from Lateral Link’s team of expert contributors. This post is by David Lat, a managing director in the New York office, where he focuses on placing top associates, partners and partner groups into preeminent law firms around the country.

Prior to joining Lateral Link, David founded and served as managing editor of Above the Law. Prior to launching Above the Law, he worked as a federal prosecutor, a litigation associate at Wachtell Lipton Rosen & Katz in New York, and a law clerk to Judge Diarmuid F. O’Scannlain of the U.S. Court of Appeals for the Ninth Circuit. David is a graduate of Harvard College and Yale Law School. You can connect with David on Twitter (@DavidLat), LinkedIn, and Facebook, and you can reach him by email at dlat@laterallink.com.

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Lateral Link is one of the top-rated international legal recruiting firms. With over 14 offices worldwide, Lateral Link specializes in placing attorneys at the most prestigious law firms and companies in the world. Managed by former practicing attorneys from top law schools, Lateral Link has a tradition of hiring lawyers to execute the lateral leaps of practicing attorneys. Click here to find out more about us.

You may have noticed that some firms are doling out cash hand over fist as they thank their associates for a job well done during the pandemic. Amid the excitement over bonuses, associates at other firms are gritting their teeth, still waiting to see if the salary cuts they endured thanks to COVID-19 will go away any time soon. As luck would have it, one Am Law 100 firm just made the decision to end employees’ paycheck pain.

Littler, the largest employment firm in the world, came in 66th place in the 2020 Am Law 100 rankings with $590,038,000 gross revenue in 2019, but that didn’t stop the firm from slashing salaries across the board this past spring thanks to the coronavirus crisis. Back in May, Littler reduced compensation for equity partners and corporate management by 20 percent and cut salaries for highly paid nonequity partners and non-attorney senior-level administrative employees with compensation of more than $300,000 by 15 percent. In June, the firm put all other employees’ pay on a sliding scale chopping block, averaging cuts of 10 percent. Those unlucky enough to be unable to work remotely due to their job responsibilities saw their pay reduced by 50 percent.

Now that almost five months have passed, the firm is not only doing a complete about face on its austerity measures but it will also make employees whole for the money they lost during the height of the pandemic.

Sources tell us that during a pre-recorded town hall meeting, co-managing directors Tom Bender and Jeremy Roth announced that all salary reductions had been fully reversed and that all pay would be restored as of the firm’s September 25 pay period. Littler employees were also told that they’d receive true-up payments by or before October 2 to bring them to the levels they would have been at prior to the pandemic. As for those who had their salaries cut in half, the firm is still “working with” them, and no furloughs or layoffs have been made to date.

Littler thanked all of its employees for their hard work as management announced the end of the salary cuts:

Despite the many ongoing challenges posed by COVID-19, we are proud of how our team stepped up to help serve our clients, who are navigating the host of complex workplace issues associated with the pandemic. This collaborative spirit is reflective of our firm culture and we thank all of our attorneys and staff for their continued dedication in the toughest of times.

Congratulations to everyone at Littler. We know the cuts may end soon at additional firms, but let’s hope everyone is made whole, too.

If your firm or organization is slashing salaries or restoring previous cuts, closing its doors, or reducing the ranks of its lawyers or staff, whether through open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. Our vast network of tipsters is part of what makes Above the Law thrive. You can email us or text us (646-820-8477).

If you’d like to sign up for ATL’s Layoff Alerts, please scroll down and enter your email address in the box below this post. If you previously signed up for the layoff alerts, you don’t need to do anything. You’ll receive an email notification within minutes of each layoff, salary cut, or furlough announcement that we publish.

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Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

In my previous column, I examined Arizona’s decision to crack open the legal monopoly on law firm ownership and legal services. No one knows yet how impactful this experiment will prove. While some might predict an earth-shattering upheaval, others have been more bearish about the idea that opening up the practice to individuals and companies outside the traditional bar will change everything. When I spoke a few months ago to John Croft of Elevate, a UK-based ALSP, he likened breaking the monopoly to AI: despite the years of promises that computers would be taking our jobs, AI has so far underperformed on its promises of upending the industry.

The more I think about it, though, the more I wonder if Arizona’s experiment is precisely the jump-start AI needs to start living up to its hype in the legal sphere.

A Major Player

While it’s had a muted impact on law so far, in the broader business world artificial intelligence is a big freakin’ deal. Computers are learning to make decisions faster, smarter, and more accurately than their human counterparts on topics that previously were thought impenetrable to computer science. Industry after industry has been experimenting with and adopting AI solutions to improve its decision-making, production, and services. Most any industry you can think of, from transportation to science to art to your morning caffeine fix, is using AI and machine learning to change the way it does business.

To be sure, the science and practice of AI are still maturing and growing, and we’re still figuring out the strengths and weaknesses of our current batch of AI tools. If you don’t mind a tech-heavy, but funny read, I recommend the story of a programmer who took an AI neural network designed for image recognition and tricked it into declaring with 98.9% confidence that a picture of a panda bear was actually a vulture. AI is currently deeply powerful but in many ways also deeply limited. It’s powerful, but we’re not in danger of creating Skynet any time soon.

Those entertaining outliers shouldn’t fool you, though. AI is a major player in business, and it’s here to stay. Just this week, Nvidia, the most valuable semi-conductor company in the world, announced it was spending $40 billion to acquire semiconductor design company Arm. If you’re reading this article on your phone, chances are an Arm design is making that possible. Why would Nvidia gamble half a Warren Buffett on this deal? Per Nvidia CEO Jensen Huang, it’s all about artificial intelligence. Nvidia thinks that by marrying its ultra-powerful AI-enabling GPUs with Arm’s industry-leading energy-efficient designs, they can put serious AI computing power in our pockets and on our desktops and dominate a space that’s only going to grow.

Why AI Hasn’t Taken Our Jobs Yet

Given that AI is so hot right now, plenty of thought leaders have been planning for AI to begin replacing attorneys and taking over an industry that, in many respects, seems well-suited to AI decision making. From routine attorney tasks like basic research, briefing, and calendaring, to more complicated concepts like risk assessment and case valuation, there are any number of candidates in an attorney’s practice for the kinds of automation and data analysis that AI provides.

Yet to date, the sky(net) has not yet fallen. Few lawyers, if any, have been replaced by computer terminals so far. The biggest adopters of AI so far have been vendors building tools to help lawyers, rather than put them out of work.

Why would AI have such a muted impact on law when it’s changing other industries to their core? My guess would be that lawyers are the gatekeepers of our industry, and lawyers by and large have little interest in killing their own jobs, or the jobs of high-billing timekeepers. Because only lawyers have been able to practice law, they can’t be replaced, so there’s been little reason for vendors or potential competitors to build the kind of tools that would render attorneys redundant.

Waiting For The Next Unicorn

In Arizona, though, attorneys’ cozy monopoly is being broken up, even if only partially. Big nonattorney-owned businesses may be looking for ways to break into this sector, and those companies have famously little love for the well-paid attorneys on their payrolls.

Think about it: who in the world of private business actually wants lawyers to continue to be paid apart from other lawyers? Whether we work with firms or in-house, clients are constantly pressuring us to reduce our costs and billings. The lower ends of the market have been priced out altogether. There’s a huge market for cheaper alternatives to traditional legal services, one that ALSPs and the Big Four have only begun to scratch given the strictures on performing legal work without a JD. Properly harnessed, AI has tremendous potential to downscale the amount of attorneys actually needed to run a functioning legal business. As the barriers to entry come down, all it really takes is one smart coder with a good idea to change how our business is run forever.

In Arizona, that coder suddenly has access to an entirely new field of potential clients, and the new ability to raise huge capital from nonattorney co-owners. While lawyers have so far been hesitant to sell off equity in their firms, startups trying to break in probably wouldn’t mind at all having a billion-dollar hedge fund backing their disruption play. As industry protections against AI come crashing down, the chances AI fundamentally reconfigures our way of doing business increase exponentially.

If Arizona’s experiment in opening up law to nonlawyers spreads across the country, it could mean that AI’s days of underachieving in the legal space are coming to an end. If traditional law firms don’t take note and plan accordingly, don’t be surprised if you see the vultures start circling.

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James Goodnow is the CEO and managing partner of NLJ 250 firm Fennemore Craig. At age 36, he became the youngest known chief executive of a large law firm in the U.S. He holds his JD from Harvard Law School and dual business management certificates from MIT. He’s currently attending the Cambridge University Judge Business School (U.K.), where he’s working toward a master’s degree in entrepreneurship. James is the co-author of Motivating Millennials, which hit number one on Amazon in the business management new release category. As a practitioner, he and his colleagues created and run a tech-based plaintiffs’ practice and business model. You can connect with James on Twitter (@JamesGoodnow) or by emailing him at James@JamesGoodnow.com.

Yikes. I can understand a firm’s inclination to be transparent with associates, but you have to wonder if it would be better to say nothing at all. And for those associates who thought working for — far and away — the richest Biglaw firm meant of course you’d get market bonuses? Lolololol. COVID makes fools of us all.

So what exactly happened?

Last night, Kirkland & Ellis sent around a message indicating that yes, they are aware that fall bonuses are making their way through Biglaw, but no, you should not expect them. The firm acknowledged the discrepancy between top of the market and what they’re doing and said they’d take the market into account during year-end bonus time, but made no clear commitment.

Read the memo for yourself:

Let’s check in with our Kirkland readers —- y’all, they’re not okay:

Disappointing, since hours did not slow down for Covid, but apparently comp did.

Associates are livid. Despite the general lack of transparency, we were told that our office was up 20% year on year. What a slap in the face to everyone who’s been grinding all year under difficult conditions.

The email doesn’t contain a commitment to true us up, it’s just an anodyne statement that they’ll take them “into account.” What garbage. These cheapskates have been talking for months about how the firm is having a banner year (for instance, the funds group is apparently on track to have a billion dollars of revenue on its own), but they can’t share it with associates.

I’m a senior associate at K&E. I think that what they’re going to do here is roll it into the year-end bonus, then use it as an opportunity to scrimp. So where in years past the average bonus was 1.25x (I snuck a pic of the powerpoint last year and I’m pretty sure that’s what the average was, but I can’t find it now), now they’ll be able to lower it to 1.15x but make it look ok because they’re aggregating it with the year-end bonus. And of course people with below-class ratings are going to get the shaft and they won’t compute them into the statistics about what’s “average”. This is a complete money grab, but exactly what I’d expect from the partnership here.

If you forward the email on your phone, you can see that they were tweaking the “and we intend to be so again this year” phrasing. Like, these guys were definitely on a Zoom call together trying to figure out how to polish this turd without making any true commitments.

Morale is NOT GREAT.

Another K&E person chiming in to describe the mood among my friends as FUCKING IRATE. I like the firm and generally drink the koolaid, but the fact that they call themselves compensation leaders twice in the “sry no bonus” email is ridiculous. Please vote us down in Vault.”

KE associate checking in — they said they would consider fall bonuses when determining December bonuses. But still. Bullshit. Lots of people will just get screwed given the individualized system we have. This is also a fuck you move because it’s pretty clearly a signal to other firms that the KE partners don’t want them to match. Just like Covington’s lame attempt to stop the salary raises a few years ago. Shame.

I am not in restructuring, but I can only imagine how pissed those guys have got to be during this insane year.

This is a slap in the face for associates at the world’s #1 grossing law firm.

So there you go, associates are deeply upset with this development. And remember, traditionally, the firm prides itself on above market — albeit individualized — bonuses. So, whatever numbers (which will be difficult to compare since you know, individualized) the firm comes up with at the end of the year, there’s a pretty good chance that, overall, they won’t be as generous as last year. At least that’s what insiders think; we’ll see what happens come December.

So what do you think? Is this a sign to other firms not to match? Will Kirkland competitors shower their associates with special bonuses? Is there blood in the water? Will Kirkland be able to keep its perch as the richest Biglaw firm? Feel free to sound off by email, by text message (646-820-8477), or by tweet (@ATLblog). A fun or insightful response — we’ll keep you anonymous — could find its way into an update to this story.

Please help us help you when it comes to bonus news at other firms. As soon as your firm’s bonus memo comes out, please email it to us (subject line: “[Firm Name] Bonus”) or text us (646-820-8477). Please include the memo if available. You can take a photo of the memo and send it via text or email if you don’t want to forward the original PDF or Word file.

And if you’d like to sign up for ATL’s Bonus Alerts, please scroll down and enter your email address in the box below this post. If you previously signed up for the bonus alerts, you don’t need to do anything. You’ll receive an email notification within minutes of each bonus announcement that we publish.

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Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).