Law firm
A law firm is a business entity formed by one or more lawyers to engage in the practice of law. The primary service rendered by a law firm is to advise clients (individuals or corporations) about their legal rights and responsibilities, and to represent clients in civil or criminal cases, business transactions, and other matters in which legal advice and other assistance are sought.
Structure and promotion[edit]
Partnership[edit]
Law firms are typically organized around partners, who are joint owners and business directors of the legal operation; associates, who are employees of the firm with the prospect of becoming partners; and a variety of staff employees, providing paralegal, clerical, and other support services. An associate may have to wait as long as 11 years before the decision is made as to whether the associate is made a partner. Many law firms have an "up or out policy", integral to the Cravath System, which had been pioneered during the early 20th century by partner Paul Cravath of Cravath, Swaine & Moore, and became widely adopted by, particularly, white-shoe firms;[7] associates who do not make partner are required to resign, and may join another firm, become a solo practitioner, work in-house for a corporate legal department, or change professions. Burnout rates are notably high in the profession.[8]
Making partner is very prestigious at large or mid-sized firms, due to the competition that results from higher associate-to-partner ratios. Such firms may take out advertisements in professional publications to announce who has made partner. Traditionally, partners shared directly in the profits of the firm, after paying salaried employees, the landlord, and the usual costs of furniture, office supplies, and books for the law library (or a database subscription). Partners in a limited liability partnership can largely operate autonomously with regard to cultivating new business and servicing existing clients within their book of business.
Partner compensation methods vary greatly among law firms. At major United States law firms, the "compensation spread" (ratio between the highest partner salary and lowest partner salary) among firms disclosing information ranges from 3:1 to 24:1. Higher spreads are intended to promote individual performance, while lower spreads are intended to promote teamwork and collegiality.[9]
Many large law firms have moved to a two-tiered partnership model, with equity and non-equity partners. Equity partners are considered to have ownership stakes in the firm, and share in the profits (and losses) of the firm. Non-equity partners are generally paid a fixed salary (albeit much higher than associates), and they are often granted certain limited voting rights with respect to firm operations.
The oldest continuing partnership in the United States is that of Cadwalader, Wickersham & Taft, founded in 1792 in New York City. The oldest law firm in continuous practice in the United States is Rawle & Henderson, founded in 1783 in Philadelphia.
Location[edit]
Most law firms are located in law office buildings of various sizes, ranging from modest one-story buildings to some of the tallest skyscrapers in the world (though only in 2004, Paul Hastings was the first firm to put its name on a skyscraper).
In late 2001, it was widely publicized that John C. Dearie's personal injury plaintiffs' firm in the state of New York has been experimenting with bus-sized mobile law offices.[51] The firm insists that it does not "chase ambulances". It claims that a law office on wheels is more convenient for personal injury plaintiffs, who are often recovering from severe injuries and thus find it difficult to travel far from their homes for an intake interview.
Rankings[edit]
Law firms are ranked both objectively, such as by revenue, profits per partner, and subjectively, by various legal publishers and journalists.
As legal practice is adversarial, law firm rankings are widely relied on by prospective associates, lateral hires and legal clients. Subjective rankings typically cover practice areas such as The American Lawyer's Corporate Scorecard[52] and Top IP Firms. Work place rankings are directed toward lawyers or law students, and cover such topics as quality of life, hours, family friendliness and salaries.[53] Finally, statistical rankings generally cover profit-related data such as profits per partner and revenue per lawyer.[54] Third party attorney ranking services such as Chambers and Partners and Martindale-Hubbell are generally very competitive and can help raise an individual attorney's professional profile, and to catch this marketing advantage, over 1,200 attorney ranking and or awards have sprung up in the U.S.[55] Various state bar associations have taken notice of the prolific growth of attorney honor awards and have determined that lawyers may refer to such honors in advertising "only when the basis for comparison can be verified" and the organization providing the award "has made adequate inquiry into the fitness of the individual lawyer."[56]
In an October 2007 press conference reported in The Wall Street Journal and The New York Times, the law student group Building a Better Legal Profession released its first annual ranking of top law firms by average billable hours, pro bono participation, and demographic diversity.[57][58] Most notably, the report ranked the percentages of women, African-Americans, Hispanics, Asian-Americans, and gays and lesbians at America's top law firms. The group has sent the information to top law schools around the country, encouraging students to take this demographic data into account when choosing where to work after graduation.[59] As more students choose where to work based on the firms' diversity rankings, firms face an increasing market pressure in order to attract top recruits.[60]