Jenner & Block, a top Chicago law firm best known for its trial attorneys, has downsized its partnership for the second time in two years.
At least 10 partners have been told in recent weeks they will have to give up their equity in the firm, with some being asked to leave, according to people familiar with the discussions.
The firm's chairman, Anton Valukas, confirmed this week that some partners were put on "non-equity" status, but he declined to comment on the number of lawyers affected or disclose their identities. He downplayed the cuts, describing them as nothing out of the ordinary.
"We periodically review how each of our partners and associates are doing and act on those reviews," Valukas said. "It's nothing different this year than we've done in other years."
Last year, the firm cut between 15 and 20 of its equity partners.
The cutbacks are a sign of the times in today's biggest law firms. Some of the most successful legal operations, including several in Chicago, are churning through partners. Jenner's reductions follow similar moves at Mayer Brown, Winston & Strawn, and Sonnenschein Nath & Rosenthal.
The turnover reflects the reality inside big law firms, where despite years of rising revenue and profit there is unyielding pressure on partners to bill more hours and bring in new business. Higher profits can help attract other rainmakers. Firms that don't keep up risk losing their most profitable lawyers.
"These law firms are like sports teams," said Kay Hoppe, a Chicago legal recruiter and consultant. "They are adding and subtracting and doing what they need to do. This is honestly going on almost everywhere I can think of."
The turnover at both the partner and associate level is expected to increase in coming months as law firms brace for a leaner 2008. Activity in areas of corporate law, such as finance, real estate, private equity, and mergers and acquisitions, has slowed because of the crunch in credit markets.
Jenner does not do as much corporate work as some of its peers, but the firm has been challenged by a slowdown in commercial litigation since the middle of last year, Valukas said. One of its specialties, securities litigation, is also well off its peak at the beginning of the decade.
Unlike other big law firms in Chicago, Jenner has resisted the temptation to grow through mergers and add offices around the world. It has more than 460 lawyers in three offices, but that's about one-fourth the size of Mayer Brown. The firm also maintains a culture that encourages pro bono work.
But the firm appears to be shedding some of its conservative ways. Several former Jenner lawyers said they could not recall a group of partners being forced out for economic reasons before 2007.
While still a top litigation firm, its profits per partner, a key measure of a law firm's health, is lower than firms doing the same caliber work. The average profit per equity partner at Jenner was $760,000 in 2006, according to The American Lawyer magazine. It ranked 77th among America's 100 top-grossing firms.
The magazine reported that Jenner had 185 equity partners at the time. The firm now has 163, Valukas said. A couple of years ago, the firm created a second tier of partnership, known as non-equity, a common practice in the profession. The firm has 56 non-equity partners.
Valukas declined to comment on whether the partner totals reflect the most recent cutbacks. |
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