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After Layoffs and Belt-Tightening, Law firms Are Seeing Light at the End of the Tunnel

Posted Mar 1, 2011 12:22 PM CST
By Martha Neil

At Cobb Cole—where five attorneys were laid off or left of their own accord last year—the attorney roster decreased to 24, and there were staff layoffs as well.

At Chiumento Guntharp & Selis, the number of lawyers working at the firm was slash from seven to 3 in 2009, and the firm also made staff layoffs that year, too.

Meanwhile, Rice & Rose, which had five attorneys a year ago, now has three, and the firm has shifted its practice focus to foreclosure defense and bankruptcy as the volume of real estate and transactional work dropped, reported the Daytona Beach News-Journal in a lengthy article detailing the recent travails of those and other Florida legal firms coping with a difficult economy.

The article follows earlier news of a Florida Bar survey that paints a grim picture of what has been happening to practitioners throughout the state during the past two years.

However, there is light at the end of the tunnel, according to the newspaper:

A number of firms, including Cobb Cole, are solidly in the black thanks to their belt-tightening efforts and rejiggering of their practice focus. Others, such as personal injury shops, were fortunate to be in a line of work that wasn’t hard-hit by the recession.

“We billed more hours in January than in any month last year, and November and December of last year were both up over the same months in the previous year,” managing partner John Ferguson, who had to make layoffs in 2010 only a few months after he started in this role, tells the News-Journal. “We’re headed in the right direction, which is worthwhile.”

Article courtesy of  Nancy Grimes - Founder GLI / Grimes Legal, Inc. - Legal Search Firm
    Retained Legal Recruiters © Copyright 2008 Grimes Legal, Inc. | All rights reserved

Are We Willing to Have Law firms Publicly Owned and Shares in Legal firms Publicly Traded?

By: Jerome Kowalski, Kowalski & Associates

Summary: As the United Kingdom marches towards the date upon which law firms may be owned by non-lawyers and the date upon which law firms may actually be publicly traded, the time has come to more seriously consider the viability of non-lawyer ownership of law firms in the United States.

Capital is the lifeblood of law firms. Law firms traditionally relied on 2 forms of raising capital: Traditional bank lending and partner capital contributions. As the credit markets in the United States have dramatically tightened, banks’ underwriting criteria have become increasingly tighter and lending has become far more difficult for law firms. Additionally, banks are monitoring their law firm borrowers extremely closely. Lending covenants, which previously were easily waived are now largely carved in to stone.

Law firms have been increasing capital contribution requirements from their partners. In some instances, legal firms are even requiring capital contributions from non-equity partners, who are in essence, paying to get a career opportunity. Raising funds through capital contributions also raises other irksome issues: First, to the extent that increased capital requirements derive from deductions in profit distributions, partners are actually taxed on income they do not even receive. Thus, the cost to individual partners in making these capital contributions imposes an added cost. Second, lateral senior partners, historically largely made their capital contributions through a bank with which the law firm had a friendly relationship. In today’s economic climate, pure friendship is not a valued coin of the realm. In making such loans, banks also view such loans as added exposure to a single borrower, namely the law firm.

Is investment by non-lawyers in law firms the answer? Should law firms go public? We have serious reservations about whether equity investment in law firms by non-lawyers will easily discover their way to commercial law firms.

But, we will surely watch the British experiment closely.

Article courtesy of  Nancy Grimes - Founder GLI / Grimes Legal, Inc. - Legal Search Firm
    Retained Legal Recruiters © Copyright 2008 Grimes Legal, Inc. | All rights reserved

U.K. TO USHER IN A NEW ERA: CLOCK TICKING ON FINAL YEAR OF LEGAL FIRM INVESTMENT COUNTDOWN

Less than a year remains until the final stage of the Legal Services Act comes into effect. This law will permit U.K. law firms to accept outside equity investment for the first time. Of course, law firms have been preparing for the change many feel will radically alter the vocation.

As referenced in September 30th edition of The AmLaw Litigation Every single day, Matthew Hudson, former leader of the London offices of O’Melveny & Myers and Proskauer & Rose, feels “The legal market faces an interesting future.  I look at ABS as similar to the financial services leading bang.  ”In the 1980s, investment banks were partnerships and charged by the hour. Now, all investment banks are companies with external capital and they charge transactionally. The same structural issues are present in the law. To have associates all trying to be partners is antiquated, unfair, and drives firms to make the wrong decisions. Something has to give.”

In July, Hudson started his own law firm, MJ Hudson, using seed funding from several private equity investors–debt he believes will be converted to “minor stakes” when the ABS legislation takes effect in October.

Top Law lawyers across the country are gearing up for the advent of ‘Tesco Law’, named after grocery retail giant Tesco, which is just one conglomerate likely to exploit one of the LSA’s other key elements: the potential for corporations and businesses owned by non-lawyers to provide legal services.

But while the seemingly inevitable influx of major brands into the legal market represents a big concern for those smaller firms, the extent to which the effects are felt elsewhere in the industry is a matter of debate.

Equity senior partners would also have to come to terms with the fact that significant outside investment would likely come at a price: they would make less money, at least initially. Intimate equity houses would want a return on their investment–typically 20 percent within three to five years. The long-term opportunities for cashing-in could be considerable. When Goldman Sachs floated in 1999, the senior partners’ stakes received during its transformation to a corporate entity were worth billions.

And while the sounds coming from larger firms suggest that they’re entirely dismissive of the need for external investment, doubters should recall that even Magic Circle heavyweight Clifford Chance tapped the debt markets in 2002, raising $150 million through a dual-tranche bond issue.

For the investor, too, there are a number of potentially serious issues to deal with. Most essential is how you would actually go about valuing a law firm. While the reported profit margin, which treats the total net income distributed among the equity partners at the end of the financial year as the absolute bottom line, may look nice, it actually presents an overly positive perspective by ignoring any fixed salary that those managers might receive. This also precludes the calculation of EBITDA–the favored tool for private equity valuation.

Explains legal consultant and former Clifford Chance managing partner Tony Williams, who was recently instructed by midmarket investor Lyceum Capital to advise on their possible activities within the sector, ”Law firm valuation is both an art and a science.  Law firm profit margins are only notional, as they’re on the basis that none of the senior managers are paid a salary—they’re not even getting a brass farthing above the line. Partner remuneration is reported as one figure, but really it’s 2 things–it’s a payment for a day career opportunity and it’s payment for putting capital into the business as a proprietor. Firms have never really looked at it that way before, but that’s exactly what [private equity investors] would do.”

Many believe this is the wave of the future. “Give it 25 years and all law firms will be incorporated,” adds Hudson, who previously spent six years working in private equity for Credit Suisse and specialist secondaries investor Coller Capital. “[The change] may start with the consumer firms, but it will transform law at the highest levels and will also journey across the Atlantic.”

In less than a year, the U.K.’s legal environment will change forever. U.S. law firms, attorneys  and investors will assuredly be looking on with intense interest.

Article courtesy of  Nancy Grimes - Founder GLI / Grimes Legal, Inc. - Legal Search Firm
    Retained Legal Recruiters © Copyright 2008 Grimes Legal, Inc. | All rights reserved

GLI Welcomes Tangi Wheet

gli-welcomes-tangi-wheet2December 10, 2010

Bowling Green, KY – When you call the GLI (Grimes Legal, Inc.) headquarters, more likely than not,  the voice you will hear on the other end will belong to Tangi Wheet, the newest member of GLI’s Administrative Support team.

Tangi has served in the administrative field for several years with other companies including corporate and law offices. She brings with her the knowledge and skills to keep executive departments organized and focused on helping you attain your professional goals.

GLI is excited to have Tangi on board and feel she will be a productive member of the team for many years to come.

Article courtesy of  Nancy Grimes - Founder GLI / Grimes Legal, Inc. - Legal Search Firm
    Retained Legal Recruiters © Copyright 2008 Grimes Legal, Inc. | All rights reserved

Happy Thanksgiving!

2010-thanksgiving-card1

Article courtesy of  Nancy Grimes - Founder GLI / Grimes Legal, Inc. - Legal Search Firm
    Retained Legal Recruiters © Copyright 2008 Grimes Legal, Inc. | All rights reserved

GLI Announces Launch of Sister Company!

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www.gcareerbreakthrough.com  

 

Article courtesy of  Nancy Grimes - Founder GLI / Grimes Legal, Inc. - Legal Search Firm
    Retained Legal Recruiters © Copyright 2008 Grimes Legal, Inc. | All rights reserved

GLI Welcomes Recruiting Specialist Brenda Collins

Brenda Collins brings 30 years of Sales Experience to GLI
July 26, 2010

blc-picBowling Green, KY – GLI (Grimes Legal, Inc.) welcomes Brenda Collins as a Recruiting Specialist. At GLI, a sampling of Brenda’s responsibilities includes sourcing, identifying, recruiting, and counseling legal professionals in order to place them in client legal organizations and contacting law firms and organizations to identify permanent placement needs and business requirements.

“Brenda brings a wealth of business, sales and management experience to GLI. Her vast human resource experience in big US markets such as Boston, Dallas, Denver, Indianapolis, New Orleans, Portland and Seattle will be invaluable as GLI expands into other venues”, says Nancy Grimes, President and Managing Partner of GLI.

Brenda has served in all aspects of the search process, from conducting original search on candidates to meeting with large institutions and committees to determine their need for the appropriate fit, with the past Ten years primarily focused on healthcare, hotel and hospitality, food service and entertainment. Prior to that, her main placement opportunities came in higher education where Brenda received President Club accolades 4 of her 6 years with American Education Center, now known as Education Management Corporation. She has successfully placed senior level personnel in sales, marketing, human resources, general management, event management and collegiate disciplines.

Brenda has a firm commitment in building and fostering strong relationships with both clients and candidates that are grounded in integrity. She has developed a strong network throughout the country within the executive search and educational communities, knowing that the candidates she helps place also become clients.

In addition to her duties at GLI, Inc., Brenda takes great pride in being active as a community volunteer, and creating and developing a program for at-risk individuals coming out of the penal or home incarceration program find work with application, career opportunity interview and placement skills.

Brenda graduated from Brown Mackie College in Salina, KS with a degree in Business Management.

For more information on GLI, log on to www.grimeslegal.com

Contact:
Tonya D. Johnson
Director of Marketing
GLI/Grimes Legal, Inc.
Email: tdjohnson@grimeslegal.com

About Grimes Legal, Inc.

Grimes Legal, Inc. was founded to provide businesses with a unique resource for locating, qualifying and recruiting proven performers in diverse areas of specialization. We achieve this by first working to understand the business needs of our clients. This requires thorough research into nuances of the industries in which our clients flourish, learning the philosophies of management which guide our clients’ business and professional strategies and focusing objectively on their individual cultures.

All Rights Reserved.                                www.grimeslegal.com

Article courtesy of  Nancy Grimes - Founder GLI / Grimes Legal, Inc. - Legal Search Firm
    Retained Legal Recruiters © Copyright 2008 Grimes Legal, Inc. | All rights reserved

GLI Sponsors Karl Rove

Bowling Green, KY

On May 20, 2010, GLI sponsored Karl Rove as the keynote speaker for Foundation Christian Academy’s first annual Benefit Dinner at Sloan Convention Center in Bowling Green, KY.

Karl Rove served as Senior Advisor to President George W. Bush from 2000–2007 and Deputy Chief of Staff from 2004–2007. Karl Rove has been described by respected author and columnist Michael Barone in U.S. News & World Report as “…unique…no Presidential appointee has ever had such a strong influence on politics and policy, and none is likely to do so again anytime soon.” Washington Post columnist David Broder has called Karl a master political strategist whose “game has always been long term…and he plays it with an intensity and attention to detail that few can match.” Fred Barnes, executive editor of The Every week Standard, has called Karl “the greatest political mind of his generation and probably of any generation… He knows history, understands the moods of the public, and is a visionary on matters of public policy.”

Article courtesy of  Nancy Grimes - Founder GLI / Grimes Legal, Inc. - Legal Search Firm
    Retained Legal Recruiters © Copyright 2008 Grimes Legal, Inc. | All rights reserved

A Message to the Class of 2010

By President Barack Obama

Published: 05/16/2010

spotlight-barack-obama

 

President Obama delivering the graduation address at the University of Notre Dame in May 2009.

 

 

Congratulations. Since I couldn’t be at every high school and college commencement this year, I wanted to send a message to all of the graduates in this country who are about to embark on the next chapter of your young and promising lives.

There are generations of Americans who came of age during periods of peace and prosperity. When they graduated from high school or college, they entered a world of comfort and stability where little was required of ‘em beyond their obligations to themselves and their families.

That is not the world you are about to inherit. You are growing up in a time of great challenge and sweeping change. You will search for career opportunities in an economy that’s still emerging from one of the worst recessions in history. You will seek a profession in an era where a high school diploma and a factory job are no longer sure paths to success. And you will raise your children in a world where threats like terrorism and a changing climate cannot be contained within a country’s borders.

At times like these, when the future seems unsettled and uncertain, it can be easy to lose heart. When you turn on the television or read newspapers or blogs, the voices of cynicism and pessimism always seem to be the loudest.

Don’t believe them.

Yes, we are facing difficult times. But America has been through them before. In the 1930s, young guys and women saw one-third of the nation ill-clothed, ill-housed, ill-fed, and later witnessed tyranny sweep across Europe and the Pacific. In the 1960s, millions of students participated in peaceful protests—against those who sought to keep them divided by race, against a war they believed unjust—and were met with billy clubs and fire hoses.

So many times in so many eras, Americans your age could have decided to just go about their own business, fend for themselves, and leave our country’s problems for somebody else to solve.

But they didn’t.

You’re graduating today in part because these who came before you had the courage to look past their differences, face down their common difficulties, and consummate their union. It was young soldiers who pushed forward at Lexington and at Gettysburg, at Normandy and at Kandahar. It was graduates like you who looked across a continent and built the railroads, highways, schools, and universities that have fueled the most prosperous economy in the world. It was a 33-year-old Thomas Jefferson who wrote the Declaration of Independence; a 33-year-old Elizabeth Cady Stanton who organized the Seneca Falls Convention, the first national women’s rights convention; a 26-year-old Martin Luther King Jr. who began his tour to the mountaintop; and a 20-year-old Bill Gates who started one of the most transformative companies on Earth.

All of these Americans faced long odds. All of them faced doubt. Many grew up in times of discord and difficulty. Yet they knew that while America’s destiny is never certain, our ability to shape it always is. Ours is a history of renewal and reinvention, where each generation finds a way to adapt, thrive, and push the nation forward with energy, ingenuity, and optimism.

That is your charge as graduates—our future is in your hands. The United States is still a land of infinite possibilities waiting to be seized, if you are willing to seize ‘em.

While government plays a role in making a more prosperous and secure future possible for America, the final outcome ultimately depends on you and the choices you make from here on out.

Of course, each of you has the right to take your diploma and seek the quickest path to the biggest paycheck or the highest title possible. But remember: You can choose to broaden your concerns to include your fellow citizens and country instead. By tying your ambitions to America’s, you’ll hitch your wagon to a cause larger than yourself. You can choose a career in public service or the nonprofit sector, or teach in an underserved school. If you have medical training, you can work in an understaffed clinic. Love science? You can discover new sources of clean energy or launch a business that makes the most efficient and affordable solar panels or wind turbines.

Or you may decide to make your mark in ways that may be smaller but are just as important—volunteering at a local shelter, tutoring or mentoring school kids, staying involved in the local and national debates that shape our lives and the life of our country, or raising your own children to be generous and productive Americans.

No matter what you choose to do, know that you’ve the ability—each one of you—to write the next chapter in America’s story. Starting your careers in troubled times is a challenge, but it’s also a privilege. When I left for Chicago after college to be a community organizer, I, like many of you, had no idea what the future would hold for me. What I did know was that somehow, in some way, I wanted to make an impact on the world around me.

It’s times like the ones you’re facing today that force us to try harder and dig deeper. Times like these move us to discover the greatness we each have inside and, in doing so, rediscover the greatness that defines us as a nation. These are the tasks lying before you, and I have no doubt all of you are up to the challenge.

Article courtesy of  Nancy Grimes - Founder GLI / Grimes Legal, Inc. - Legal Search Firm
    Retained Legal Recruiters © Copyright 2008 Grimes Legal, Inc. | All rights reserved

MarketWatch: Goldman Sachs to Face Senate Panel

As allegations about the investment bank’s conduct in the mortgage and structured finance markets mount, check out opportunities on our website.

Article courtesy of  Nancy Grimes - Founder GLI / Grimes Legal, Inc. - Legal Search Firm
    Retained Legal Recruiters © Copyright 2008 Grimes Legal, Inc. | All rights reserved