Category: News Feeds

Listen, above all else, Biglaw is a business. I know that, you should know that, and folks that operate under a different assumption do so at their own risk. That is always true, even when there is a global pandemic raging. So, perhaps we shouldn’t be surprised that some Biglaw partners are sending around emails that could, at the most generous, be termed as tone deaf.

The email in question was sent to associates in the Houston office of Kirkland & Ellis by Andy Calder, a partner and member of the firm’s global management committee. The email scolds folks that they need to keep churning out billable hours and that the firm “isn’t a gravy train where you can just chill and be along for the ride” and that “the math is not going to work out well for you at the end of the year.”

Notice, if you will, the complete lack of empathy in the letter — no mention that people who work at the firm might be suffering from COVID-19 or have a loved one hospitalized with the virus, or that in-person school has been canceled and all the parents working for him are likely trying to balance the demands of their children with the demands of this job, or that the isolation caused by the pandemic can exacerbate existing mental health issues. Nope, none of these very real concerns are mentioned, let alone validated in the email. The message — from a member of the management committee — is clear: you are only useful to the firm if you keep on billing. And if you can’t bill because there is a goddamned pandemic going on? Tough shit, figure it out yourself.

You can read the full email below:

Folks,

Just hung up with some of the restructuring SPs. There are some huge cases coming in and they have no staffing. Thanks to everyone for stepping up so far on cases.

For those that aren’t fully occupied right now, and are not on a single restructuring matter because they have been hiding, let me spell out reality for you real quick. I am seeing a ton of money being left on the table on the matters coming in and I have seen all of your hours today (from most junior associate through SP). Am pretty shocked and the math is not going to work out well for you at the end of the year.

Bacon and Larson will continue to staff folks below SP over the coming days/weeks, I will be calling SPs personally. Given the market you should feel extremely lucky to be in an institution with too much work. That doesn’t mean you have an annuity here. If you get a call or don’t have enough to do, I suggest you grab a restructuring assignment ASAP and roll up your sleeves. If it was me in 2008 I would be pre-emptively calling Doug or Adam after you read through the end of this note. This isn’t a gravy train where you can just chill and be along for the ride.

Andy

And if there was ever a question, this email makes it clear: associates are nothing more than billable hours.

When confronted with the substance of the email, Calder told Vivia Chen at Law.com:

“We’ve done above and beyond what firms have done during coronavirus. Our people are well taken care of. We’ve taken care of our people and will continue to do so.”

(Calder also told Chen, without disputing the substance of the email, “Some of that sounds genuine; some not. It seems embellished.” That screenshot though ¯_(ツ)_/¯.)

Regardless of what official COVID-19 policy the firm may have, the real life experience of associates at Kirkland couldn’t be clearer: associates should be busy making money for the firm so Kirkland can stay on top of the rankings and keep bringing in billions in gross revenue year after year. And the firm doesn’t seem to care what you are going through as the pandemic sweeps across the globe.

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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).

The coronavirus continues to wreak havoc upon Biglaw as we know it, and firms we previously thought were untouchable are now making moves in response to the financial uncertainties that go hand in hand with market instability. Until today, we never would have thought that one of the biggest names in Biglaw would be making adjustments to its ledgers, but here we are.

We’re told that Quinn Emanuel, which came in 25th place in the most recent Am Law 100 rankings, with $1.25 billion in revenue in 2019, will be postponing partner distributions that were originally scheduled for April until July. On top of that, the firm has revised the size of partner draws for April, May, and June. When it comes to profits per equity partner, Quinn Emanuel is ranked No. 5 in the Am Law 100, with each partner raking in $4.5 million. “We’re focused on building up our cash reserves, given who knows what the future holds,” said John Quinn, the firm’s founder.

The American Lawyer has additional details on the scope of the pay adjustments:

One source familiar with the changes said that all partners would receive draws of $30,000 per month starting in June. Quinn would not comment on the specific size of the draws, but emphasized that reductions were not universal.

“Some people are getting less than before, while some are getting more,” he said. “It’s not true that all are getting reduced.” …

But partners at the firm who have seen their compensation dip are still in the dark about whether July distributions will return their compensation to where it stood prior to the COVID-19 crisis, with Quinn saying only that the issue would be revisited that month.

On the bright side, Quinn says his firm has been “gratified” because its financial performance has been strong through the pandemic thus far. “It’s like the whole economy went off the cliff,” he said. “We didn’t know what this was going to mean for us.” Hopefully Quinn Emanuel continues to see success as the COVID crisis rages on.

If your firm or organization is slashing salaries, 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.

If you’ve been looking for a way to quickly get out of your longtime career at a Biglaw firm, then perhaps suggesting in a public Facebook post that you have guns and ammo to show to retail staff who dare state that you must wear a mask to enter during the COVID-19 pandemic is the way to go.

On Friday, Kevin Bain, who worked as a document services manager in Thompson & Knight’s Dallas, Texas, office, posted the following rant on Facebook:

Bain, who started working at the firm in 2009, quickly found internet infamy as his post made the rounds on various social media websites. Eventually, the firm caught wind of his ill-advised post and thankfully took immediate action.

According to his now-deleted LinkedIn profile, prior to this episode, Bain had worked in the legal industry since 1997. Now he’s thrown away his entire career over a public health and safety requirement. Perhaps it’s all for the best; after all, he may have faced a future furlough or layoff thanks to the austerity measures many firms have taken due to the coronavirus outbreak. He just saved his firm the trouble.

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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.

It seems the list of Biglaw firms that have taken an ax to costs due to the economic uncertainty caused by COVID-19 just keeps growing and growing. It probably seems that way because it is true. Since mid-March, every day has brought more news of the austerity measures Biglaw is taking to navigate these troubled waters.

The latest report of Biglaw austerity measures is from Thompson Hine. In 2018, the firm made $221,026,000 in gross revenue making it 137th on the Am Law 200. Now, according to reports, Thompson Hine is “aggressively” cutting its non-payroll expenses. The firm has also slashed quarterly partner draws by 15 percent. Staff compensation has also taken a hit of 1.7 percent, annualized.

If your firm or organization is slashing salaries, 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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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).

Magic Circle firm Freshfields Bruckhaus Deringer is a giant international player with $1,967,034,000 in gross revenue in 2018 and more than 1,400 attorneys on the pay roll. And amid the COVID-19 economic downturn, the firm is doing everything possible to keep all those attorneys — and their legion of staff — gainfully employed.

In order to avoid any layoffs or furloughs the firm has instituted a series of austerity measures aimed at maintaining cash flow. As reported by Law.com, that includes suspending quarterly partner distribution. Plus lawyer pay globally has been frozen and bonus decisions — typically made in April — will be postponed until September. Freshfields is also considering optional reduced hours for employees that want that flexibility.

If your firm or organization is slashing salaries, 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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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).

Lawyers are opinionated folks and the American response to COVID seems to be wrong in every conceivable vector — not enough tests, not enough ventilators, closing things down that wouldn’t have needed closing if we’d had enough of the other two — but the place to vent about your issues with the deep state for eating into your profit margin is not the bar association COVID board.

We’re not going to call out anyone specifically here, but there are lawyers hopping on local boards to complain about “idiot politicians” ruining the economy for a disease that isn’t likely to kill. Sadly, we actually wish we were calling out one specific attorney, but this is happening on a few lawyer groups right now. So let’s use this space as a friendly a reminder to these folks that they need to shut the f**k up.

People are going to the local COVID board to write obituaries for fellow attorneys and discuss how they plan to cope with the fallout from the virus. They absolutely aren’t there for your pontification about how we should all lick flagpoles for the economy. Nobody cares here; go find a QAnon board to populate.

It’s about knowing your audience not about trying (and in these cases failing) to be right. When everyone on the board is talking about losing a loved one, it doesn’t actually matter to point out that “well, actually, most people who contract the virus will survive.” Just because it’s true doesn’t make you any less of an asshole.

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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.

The results are in from the February 2020 administration of the California bar exam, and to say they aren’t pretty would be an understatement because the State Bar once again has a historically low pass rate.

According to a press release from the State Bar of California, the overall pass rate for the February 2020 exam was 26.8 percent, while the pass rate for first-time takers was 38 percent. The pass rate for retakers was a shockingly low 22 percent. Last February, the overall pass rate was 31.4 percent, the second-lowest pass rate California has seen since the February 1982 exam. This is the second time since 1986 that the overall pass rate has fallen below 30 percent, and the lowest pass rate recorded in California since 1951, the earliest date listed on the state’s summary of results. For the sake of comparison, let’s take a look at the results for the past few administrations of the California bar.

In February 2015, the overall pass rate was 39.5 percent, and the pass rate for first-time takers was 47.4 percent. In July 2015, the overall pass rate was 46.6 percent, and the pass rate for first-time takers was 60 percent. In February 2016, the overall pass rate was 35.7 percent, and the pass rate for first-time takers was 45 percent. In July 2016, the overall pass rate was 43 percent, and the pass rate for first-time takers was 56 percent. In February 2017, the overall pass rate was 34.5 percent, and the pass rate for first-time takers was 39 percent. In July 2017, the overall pass rate for the state’s first foray with a two-day exam was 49.6 percent, and the pass rate for first-time takers was 62 percent. In February 2018, the overall pass rate was 27.3 percent, and the pass rate for first-time takers was 39 percent. In July 2018, the overall pass rate was 40.7 percent, and the pass rate for first-time takers was 55 percent. In February 2019, the overall pass rate was 31.4 percent, and the pass rate for first-time takers was 41 percent. In July 2019, after an unprecedented essay topic leak, the overall pass rate was 50.1 percent, and the pass rate for first-time takers was 64 percent.

Once again, the State Bar again used the total number of those who completed the exam in their final calculation for the February 2020 passage rate rather than the total number of people who actually sat for the exam. We shudder to think of what the true overall pass rate might be for this administration of the exam.

This winter’s 26.8 percent pass rate represents a 4.6 percentage point decrease over last February’s results, with fewer than 3 in 10 test-takers managing to post a passing score. Donna Hershkowitz, Interim Executive Director of the State Bar, didn’t mention the low pass rate, instead issuing remarks on the administration of the state bar during the pandemic, and the future of the exam, in general.

On the bright side, if there is one, the state’s mean scaled MBE score was 1357, compared with the national average of 1326. (Both scores were down from last year, and the national mean MBE score was an all-time low.)

Here are some additional statistics from this winter’s exam:

School Type	First-Timers	Repeaters
California ABA	42%	30%
Out-of-State ABA	45%	22%
California Accredited (but not ABA)	17%	10%
Unaccredited: Fixed-Facility	0%	8%
Unaccredited: Correspondence	14%	11%
Unaccredited Distance Learning	16%	9%
All Others	41%	20%
All Applicants	38%	22%

Something here clearly needs to change, and it’s not just law school admissions standards anymore. Imagine how many more people would have passed the exam if the California Supreme Court had decided to lower the state bar’s cut score to bring it in line with that of the vast majority of other states.

At this point, lowering the cut score on the California bar exam may be the state’s only remedy for the thousands of would-be lawyers who continue to fail the test.

Congratulations if you managed to pass the bar exam in California this winter. If you didn’t pass, don’t despair. Many very successful people have failed the bar exam (see our list of famous bar exam failures). Focus on September and try to develop a plan for passing, and someday, you’ll conquer the beast that is the California bar exam.

State Bar of California Releases Results of February 2020 Bar Exam [State Bar of California]
California Bar Exam Pass Rates Drop to All-Time Low 26.8% on February Test [The Recorder]

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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.

I usually steer far away from insurance issues in this column. Those issues don’t interest a general readership, and the issues strike many people as dull.  (The issues also cut a little close to the bone for me, given my employer, so saying anything about insurance issues is a tad personally dangerous.)

But I heard something interesting about insurance last week that I just had to share with you: Some European insurance companies are now seeing fewer automobile insurance claims than at any time since World War II.

(On second thought, maybe my definition of  “interesting” and yours don’t match up precisely.)

That gives you an idea of what the pandemic has done to travel across a big swath of the world.

As long as I’ve mentioned the word “insurance,” I’ll simply recite the waves of claims that are occurring, or are expected to occur, in the insurance industry as a result of COVID-19.

Travel: This wave has largely come and gone. It’s claims under travel insurance policies for canceled trips.

Property and business interruption claims: These claims are embryonic.  Many claims for business interruption insurance are just now being adjusted, because no one yet knows the full extent of business interruption loss. But the fight over this insurance is just getting started.

The primary dispute is this: Much business interruption coverage is triggered only by “property damage.” (The earthquake destroys your manufacturing plant. How much business interruption did you suffer as a result of your plant being out of commission?) Policyholders and insurers have different positions on whether the presence of a virus constitutes “property damage.” Given the amounts in dispute, there will of course be a gazillion subsidiary issues, but that’s enough to let you mention this at a particularly boring virtual cocktail party.

All three branches of government are involved in this dispute: The judiciary is interested, because lawsuits have been filed. Legislatures are considering laws that would compel insurers to pay COVID-19 business interruption losses even if the losses are technically not covered. And some of the executive orders implementing stay-at-home and other directives contain language that could affect these coverage issues.

That’s wave two.

The third wave will be cyber-insurance coverage. The whole world is working from home. That will result in losses. Are the losses insured?

Then there’s employment practices liability insurance: What coverage is available as employees are furloughed or laid off?

Workers compensation: Who pays when employees become ill as they return to work?

Bankruptcy and trade credit: When companies go under, what types of coverage are available?

And finally directors’ and officers’ liability coverage: Who gets named, and who’s covered, when the inevitable shareholder litigation begins?

That’s the landscape.

I understand that all your private equity lawyers are sitting on their thumbs these days. But I’m pleased to report that your coverage counsel are about to have a very busy decade.

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Mark Herrmann spent 17 years as a partner at a leading international law firm and is now deputy general counsel at a large international company. He is the author of The Curmudgeon’s Guide to Practicing Law and Drug and Device Product Liability Litigation Strategy (affiliate links). You can reach him by email at inhouse@abovethelaw.com.

Not that anyone cares, but the COVID-19 pandemic has been pretty rough on the private equity industry. Not only can it not wrangle a bailout dollar, it can’t even sell anything right now. And that means firms are stuck with a lot of positions that are taking a bath: KKR lost $1.3 billion, Blackstone $1.1 billion, Apollo $996 million, Carylyle $612 million.

If there was a silver lining in this, it was that they were able to walk away from what had become future money-losing opportunities, like Sycamore Partners did with Victoria’s Secret. Unfortunately, this cuts both ways, a lesson Dan Loeb is teaching Silver Lake Partners and Partners Group.

* Evidence points to Justice Stephen Breyer being the perpetrator of the “flush heard ’round the world” during telephonic Supreme Court arguments last week. [Slate]

* A Georgia lawyer has been identified as the leaker of a video showing the Ahmaud Arbery shooting. [New York Times]

* Quinn Emanuel is representing Tesla in its lawsuit against a CA county over closures related to COVID-19. Hope the firm gets a few Model Xs thrown in for the representation. [The Recorder]

* A Wisconsin lawyer, who is accused of offering to bribe officials for a client, has avoided prison. Talk about a full-service lawyer… [Milwaukee Journal Sentinel]

* Republican lawmakers are ready to fill any Supreme Court vacancy that may occur this year. [Politico]

* A lawsuit about Ben and Jerry’s claim of using milk from “happy cows” has been dismissed. Guess the cows really were happy? [Fox News]

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Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothmanlawyer.com.