Posts on ‘November 21st, 2008’

London law firms look set to face greater scrutiny on bills thanks to new accounting rules that mean M&A fees will directly hit clients’ bottom line. The new regulations, drawn up by the International Accounting Standards Board and the U.S. Financial Accounting Standards Board, mean that the costs of legal and financial advisory fees racked up on major deals — often in the millions — will be subject to greater scrutiny, with shareholders able to see the direct impact of deal costs on profits.

Mayer Brown laid off 33 lawyers and some support and administrative staff in the firm’s U.S. offices on Thursday because of the poor economic climate. A Mayer Brown spokesman told that the firm is not disclosing which specific offices the layoffs will affect.

Legal marketers are increasingly using search engine optimization as consumers turn to the Internet to become more informed about attorneys and specific legal issues. Smart lawyers are proactively managing their online reputation by monitoring and influencing Web search results.

Bad economic times may have exacerbated recent law firm failures like those of Thelen and Heller Ehrman, but they certainly weren’t the cause, according to a white paper issued Wednesday by Hildebrandt. The consultancy said there are a few common characteristics shared by firms that have faced dissolution and often early warning signs are ignored. Hildebrandt also discusses four types of “triggering events” it found in a study of 80 firms that failed over a seven-year period ending in 2004.

The Am Law Daily checks in with Bryan Cave’s chairman to learn more about the firm’s cost-cutting moves in the midst of the credit crisis. The firm has delayed associate raises for three months and has permanently scrapped its unique associate bonus program.

A judge has awarded more than $31.5 million — and some pointed observations — to lawyers who spent eight years battling Coca-Cola over whether the company artificially inflated revenue figures to boost stock prices. The legal fees will be deducted from a $137.5 million settlement fund, according to an order handed down by U.S. District Judge Willis B. Hunt, who declared in his order that “class counsel were clearly not motivated entirely by notions of charity and a pursuit of justice for its own sake.”

DLA Piper raised some eyebrows when it said Wednesday it would ask 275 income partners to contribute capital — up to $150,000 each — to shore up its balance sheet. But those who watch the industry said the move should not be a great surprise, nor raise alarm bells. It could simply be smart, given the turbulent economic times, shrinking credit, and the looming start of the first quarter, when cash flow tends to slow.

What impact does a slow economy have on the amount of work corporate law departments send to outside firms? The answer depends on whom you ask. Two recent surveys offer different takes on how the lethargic economy is affecting the distribution of legal work. One survey found that legal departments have cut spending on outside counsel and have become more selective about the work they send out. But another survey has found that most corporations have maintained or increased their reliance on outside firms.