Friday, August 24, 2007

$1,000 an Hour Billing Rate

The Wall Street Journal reports that biglaw firms in New York are breaking through the barrier of $1,000 an hour for their billables. David Boies, formerly of Cravath, is quoted as saying: "Frankly, it's a little hard to think about anyone who doesn't save lives being worth this much money." And an unnamed partner at an unnamed New York firm said: "We have viewed $1,000 an hour as a possible vomit point for clients." Some attorneys are so shy about charging this that they move their fees to either $950 or $1,050 an hour.

To English ears, and those in Hong Kong, this must sound terribly quaint--"Only a $1,000 an hour! An absolute steal, old boy." In sterling that's £500 per hour. It isn't unusual to find partners in the City charging at least that and usually more.

Some reckon one can make a $$/££ equivalence. What figure you pay in dollars in New York, you will pay in pounds in London. And certainly if you look at the top earning barristers in London--Sumption, Pollock, et al--you are seeing the £1,000 an hour billable breached regularly.

Of course, if this is all too much, hop on a plane to Poland. You may not have to pay more than 70 euros an hour if the Kaczynski twins have their way!

Saturday, August 18, 2007

A New Website!

I was going to write about the interaction of credit rating agencies and lawyers in the current securitization crisis, but something more important has intervened. And I will do that one later.

I have a new website!

Caroline Mockett, my web designer, has overhauled my website to make it more user-friendly, easier to navigate, and easier for me to manage. She's also added, amongst other things, two new items: a "news" page, and a "blogs posts" page that summarizes whatever has been recently blogged by me. Both have RSS feeds. Caroline has done a terrific job.

All my papers and publications are available for download in PDF, so feel free to browse. My aim is that our work should be disseminated as widely as possible, especially beyond the confines of the academic journal.

The website can be found at or

Thursday, August 16, 2007

Law Firms Buying Law Firms

Slater & Gordon, Australia's first law firm to float on the stock exchange (last May) has been on a spending spree buying law firms. Its latest purchase, and biggest, is McClellands, a Sydney personal injury litigation firm. The price is made of cash and AUS$2million in S&G shares.

S&G has also bought another law practice where it's locked the principal in for three years. This is interesting as I watched a law firm merger in Chicago once. It was going smoothly until the incomer's senior partner died after 9 months. As one of the partners who promoted the merger said: "If he'd lived for another 9 months, we'd have had all the clients locked in. Now I don't know."

Slater & Gordon, as one of my Miami summer school students told me recently, has had a bumpy ride on the Australian Stock Exchange. Although its share price has gone up, it has dipped a few times as well.

The chart shows the progress of the share price. S&G is shown by the bright red line: beginning of August it was down to AUS$1.56 from a high in July of AUS$1.73. (S&G is compared to the S&P/ASX 200 and the M Average.) It shows that despite probably good earnings and consistent revenue streams, even law firms aren't a sure bet. Mind you, the markets thought subprime mortage bonds were a good bet. Oops!

PS. Bruce McEwen has an interview with Andrew Grech, the managing partner of S&G at Adam Smith Esq.

Tuesday, August 14, 2007

Maybe There Won't Be Bargain Basement Justice After All

Following from my post yesterday about Poland's plan to limit lawyers' fees to a maximum of 70 euros an hour, it may not happen.

The Polish government is in trouble. The Kaczynski twins' Law and Justice party has lost the support of the left-wing Self-Defence party and the right-wing League of Polish Families' party. The twins (both lawyers by the way) have developed paranoia to new heights. To upset both the left and right takes talent. And, of course, they nearly derailed the EU reform treaty in June, blaming Germany's actions in the second world war for their present "small" population.

There will have to be a general election and as the Kaczynskis haven't exactly fulfilled their election promises, they won't win. Maybe lawyers can breathe easily now. I would still buff those pro bono activities as fee caps could always return.

Monday, August 13, 2007

Access to Justice at 70 euros an hour!

All through July and into August there have been "grave" words spoken about the iniquitous drive by the Polish government to improve access to justice. Now I believe in access to justice and have done some research in the area, but in this case I have two research areas intersecting: legal profession and access to justice.

According to the Financial Times, "The plans are part of the policy of Jaroslaw Kaczynski, the Polish prime minister, to broaden social provision and give state help to people who feel they have lost out in the transformation to a market economy."

The plans, however, include one provision that is driving lawyers wild with anger and frustration. All legal fees--yes, ALL--will be capped at 70 euros an hour (£47, $96).

All those corporate law firms out of London and New York won't be able to charge more. White & Case, Clifford Chance, Allen & Overy, and Linklaters will have to lower their current 200 euro minimum fees or leave.

The British and American ambassadors are doing their bit as are the Law Society and other legal bodies. They are also worried that if Poland implements this law other new EU member states will follow.

In the case of Poland it's tough because for a number of law firms, it's their base into central Europe. Added to which there are the European Football Cup finals in Poland and Ukraine in 2012 with all their concomitant contract work. How will it be done? On the cheap? Unlikely.

Maybe if the law firms had paid more attention to their pro bono activities, been more socially aware, perhaps... Who knows?