May 3, 2006
New York City
rodrigo gonzalez fernandez
director, consultajuridica
Dear rodrigo:
Welcome to the April, 2006 installment of the monthly "Adam Smith, Esq." newsletter, intended to highlight and provide concise summaries of some of the more interesting, widely-read, controversial, or just plain entertaining pieces of the past month.
Please share this newsletter with friends and colleagues as you see fit, and let me know how I can improve it to make it more useful to you and your peers; the Editor is "in."
Sufficient prologue: To the pieces of the month.
The top story was the release at month-end of the 2006 AmLaw 100 by The American Lawyer. I immediately sliced and diced the numbers a variety of ways, including by:
- revenue per lawyer in absolute dollars;
- the percentage by which each firm's revenue per lawyer exceeds or falls short of the average across all 100 firms;
- presenting a distribution curve of firms' rising or falling in the rankings; and finally, my favorite:
- drawing a bar chart for each firm showing the extent to which its percentage share of total AmLaw 100 revenue exceeds or falls short of its percentage share of total AmLaw 100 lawyer headcount.
Why is this last measure my favorite? Because it essentially portrays the amount that each firm is able to produce (revenue) vis-a-vis the resources they absorb and apply to that production (lawyers being the resource).
This chart shows the result and calls out firms by name that are especially high or low on this metric.
In other developments:
- I explained how McKinsey charges for its services and wondered aloud if there are any lessons here for a law firm willing to break the shackles of the billable hour (at least for transactional work—litigation, being intrinsically unpredictable, is always the hard case).
- Read a brief review of the book, "The Enthusiastic Employee," and summarize "what every employee wants," namely equity, achievement, and camaraderie.
- Clint Stevenson (1924—2006), managing partner of Latham & Watkins from 1967—1989, is celebrated for the imprint he put on that renowned firm, which, I suggest, continues to this day. And the moral in a nutshell? As summarized by a senior partner explaining the success of their New York office: "There was one reason, and one reason only - Latham had a strategic vision and a plan and we were competing against firms that did not."
- The recent bump-up in associate salaries comes up for analysis and critique, and you got your chance to vote on whether the new levels are justified: 72% said yes, in one form or another:
Finally, in the longest single piece I've written in some while (you have been warned!), I responded to an article by David Maister published in The American Lawyer which asked the question, "Are Law Firms Manageable?," and essentially responded, "No."
An essential bit of reading, I would argue, for all who care about managing these prickly, challenging, and deeply fascinating enterprises.
That wraps up our monthly newsletter for April 2006.
My parting wish for you all is that: (a) you share this with friends and colleagues who might find it of at least incidental interest; and (b) of far greater importance, that you let me know how I can make it sharper, more useful, more helpful.
Best regards,
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