On The Merits

You don't get to be the oldest law firm in New York without weathering some rough spots. But this may be one of the most difficult periods Cadwalader, Wickersham & Taft has ever gone through.  The Wall Street firm, which this week announced a new managing co-partner, has lost nearly three dozen partners just this year. And not all of them have left because of the firm's controversial deal with President Trump for free legal services. On today's episode of our podcast, On The Merits, Bloomberg Law reporter Justin Henry explains why Cadwalader may be too specialized to thrive in today's full-service legal industry. He also talks about ways the firm can turn itself around without having to resort to a merger. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

Law firms "have gold sitting on their hard drives," according to Yale Law School professor Scott Shapiro. Shapiro has enthusiastically embraced the use of generative AI in his classroom. He says firms should draw on the mountains of proprietary information at their fingertips to build their own tools. "If only they would train the large language models correctly, they, I believe, would get absolutely stupendous results," he said. Shapiro spoke to Bloomberg Law editor Jessie Kokrda Kamens for our podcast, On The Merits, about why he thinks every firm should make its own AI and he explains how he and his students actually did this themselves using years of documents from his Yale legal clinic. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

On today's episode of On The Merits we hear from three lawyers working in the white hot world of data center projects. Mike Rechtin and Justin Stolte are, respectively, real estate and energy partners with Latham & Watkins, and Michelle Kallen is an appellate and advocacy partner at Steptoe. "The latest number that I've seen is a $50 billion annual investment in the data center construction area by 2030," Stolte tells Roy Strom. Stolte talks about how his firm has organized to address the explosion of generative AI and the infrastructure that supports it. Latham real estate partner Rechtin talks about the unique skill set that made him the perfect fit for the niche pursuit, and Steptoe's Kallen tells Jessie Kokrda Kamens about the rapidly evolving regulatory challenges that a robust infrastructure practice faces. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

The number of law students who graduated in the class of 2024 spiked compared to previous years. That worries Nikia Gray, the head of the National Association for Law Placement. "I think it's going to be a big mistake for law schools to continue to admit large law school class sizes," she said, "when we can predict with some pretty good certainty that GenAI is changing the business models of firms and their hiring practices." Gray spoke to Bloomberg Law editor Jessie Kokrda Kamens on our podcast, On The Merits, about the ways AI will change the jobs of entry-level attorneys. The former Quarles & Brady recruiter also discussed what law students should be doing right now to get ready for a job market that's about to get much more competitive. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

It's still not clear what, if any, fallout the law firms that struck pro bono deals with President Donald Trump earlier this year will face. But analyzing attorney movements over the last six months provides one data point. On average, law firms that settled subsequently lost attorneys more attorneys than those who fought the president in court, according to data obtained by Bloomberg Law columnist David Lat. But there are some firms that buck this overall trend as well as plenty of caveats. Lat joins our podcast, On The Merits, to walk us through this data on law firm headcounts since Trump started targeting law firms in the spring. Lat also talks about the lawyer moves that will likely happen later this year that could give us an even clearer picture of how firms are doing and what effect the Trump deals are having on them. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

Delaware recently changed its corporate laws to make them more favorable to companies being sued by their shareholders and the mega-firm Wachtell, Lipton, Rosen & Katz was deeply involved in that process. That's raising some eyebrows because Wachtell is also a go-to firm for companies in Delaware, often called the corporate capital of the world. Lawyers from other prominent firms, like Wilson Sonsini and Richards, Layton & Finger, also helped shape the law. On this episode of our podcast, On The Merits, Bloomberg Law's Jennifer Kay and Roy Strom talk about what firms like Wachtell did in Delaware, what they stand to gain, and what all this has to do with Elon Musk's so-called "DExit." Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

A memo from law firm King & Spalding to its associates saying they need to log 2,400 "productive hours" a year surprised some in the legal world. But today's guest on our podcast, On The Merits, says it shouldn't have. It's always been the case that lawyers need to go beyond meeting their billable hours quotas and put in some non-billable hours in order to advance their careers, according to Jessica Chin Somers, a former Big Law attorney and current managing director at Kinney Recruiting. King & Spalding just wrote down what was essentially a legal industry unwritten rule, she said. Chin Somers talked to Bloomberg Law editor Jessie Kokrda Kamens about why associates might need to have this policy spelled out and about how they can get ahead even when they're not working on client matters. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

Like most schools worried about academic integrity, the University of Chicago Law School used to discourage its first-year students from using generative AI but now it has crept into that first-year curriculum. Despite its overall inevitability, William Hubbard, a professor and deputy dean, says he's surprised by how often he has to encourage AI-skeptical law students to at least try it out. Hubbard's school has seen how law firms, and especially large law firms, have embraced this new technology and it's followed suit, adding several AI-focused classes to its course offerings. Hubbard says the University of Chicago's students need to graduate with at least a basic familiarity with AI—specifically when it is and isn't appropriate to use in a legal setting. He spoke to Bloomberg Law editor Jessie Kamens for our podcast, On The Merits, about what the legal industry wants law students to learn about AI and how his law school is going about teaching it. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

The Big Four accounting firm KPMG has taken advantage of relaxed rules in Arizona to start a law firm there, but the company has broader ambitions outside of the state. KPMG says it doesn't want to compete with established players in the legal industry, but Big Law leaders are privately expressing concerns. That's according to Justin Henry, a Bloomberg Law reporter who's the guest on today's episode of our podcast, On The Merits. Henry talks about the legal work KPMG can do now and about the open question of whether it can operate outside of the Grand Canyon State. He also talks about the measures KPMG has taken to insulate its new law firm from the rest of its company, including having lawyers use separate entrances and exits at its Tempe, Ariz., office. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

The largest law firms in the country are fiercely competitive, so it's notable when nearly 40 of them agree to sign on to a legal brief. That's what happened in an appellate case that could have eroded the attorney-client privilege—and the firms' lucrative white collar defense practices. They breathed a collective sigh of relief earlier this month when the Sixth Circuit overturned a lower court ruling that would have forced FirstEnergy to turn over to its shareholders the results of internal investigations. The company hired Jones Day and Squire Patton Boggs to conduct the probes in response to a bribery scandal and later argued that the work was shielded by attorney-client privilege. On today's episode of our podcast, On The Merits, reporter Roy Strom explains what happened in this case and why it represented such a threat to Big Law. He also gets into the reasons lawyers' hourly rates for white collar defense work can climb so high. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

Benjamin Klubes is a Big Law expat who just founded his own litigation-focused boutique firm—and he's not alone. Other former partners at larger law firms are now either moving to smaller litigation-only firms or, like Klubes, starting their own. In this episode of our podcast, On The Merits, Klubes talks with Bloomberg Law reporter Tatyana Monnay about why he thinks these boutique firms are better suited to taking on the Trump administration than firms like Skadden, where he was a partner in the 2000s. "The issues that seemed to be driving a lot of Big Law capitulation were the transactional practices and the clients in those practices that believed that they were going to suffer as a result of retaliation by the Trump administration," he says. "That of course just isn't part of my practice or many boutique litigation practices." Klubes also says new technology, particularly AI, can mitigate some of the disadvantages of starting a small firm. "Document reviews are much more subject to technological innovation and reducing the need for a mass number of lawyers to be thrown at a case," he says. "AI can do it faster and typically, frankly, more efficiently." Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

If it wasn't already clear, it is now: well-capitalized investors want a piece of the US legal industry. The latest example of this trend came this week when the litigation funder Burford Capital announced that now, in addition to financing individual lawsuits, it also wants to buy minority stakes in entire law firms. This comes after the consulting giant KPMG won a license earlier this year to start its own legal practice in Arizona after the state loosened its rules on who can own firms. On this episode of our podcast, On The Merits, Bloomberg Law reporters Emily R. Siegel and Justin Henry talk about the ethical risks that may be involved here and about why companies like Burford and KPMG think investing in law firms could be so lucrative for them. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

The allure of making partner doesn't hold the same appeal that it used to for many Big Law associates. Some of them are swallowing a pay cut to jump to a smaller firm. That's according to Major, Lindsey & Africa partner and recruiter Kate Reder Sheikh, who wrote about the trend for Bloomberg Law. She spoke to Bloomberg Law editor Jessie Kokrda Kamens for our podcast, On The Merits, about why some associates are forgoing the riches of partnership and exit the Big Law universe. "The pay is going to be half of Big Law," she said, "but it's very appealing to a lot of people to stay at a firm but be doing work that they're genuinely excited to get out of bed and do in the morning." Reder Sheikh also shared her thoughts on the shifting power balance at Big Law firms, the rise of nonequity partnerships, and whether junior lawyers should expect their firms to match Milbank LLP's summer bonuses. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

The law firm Norton Rose Fullbright thought it was taking a great leap forward when it brought on two partners and acquired the legal tech startup they co-founded, NMBL Technologies. Now, the firm and the startup are mired in a messy litigation battle against one another. On this episode of our podcast, On The Merits, Bloomberg Law reporters Alex Ebert and Evan Ochsner get into the unusual agreement these two parties made with each other and why it ended so poorly. They also talk about the myriad challenges in the race to get into the the legal tech space. "Law firms aren't afraid to get creative in this space, especially with AI," Ochsner says. "They're worried about getting left behind." Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

A wave of associate lawyers resigned in protest from their Big Law jobs earlier this year after their firms struck controversial pro bono deals with the Trump administration. Do they have any regrets? According to Bloomberg Law reporters Justin Henry and Elleiana Green, not really. They spoke with several former associates who say they stand by their decisions to, as one legal recruiter put it, "loudly quit." But that doesn't mean the road ahead will be easy. On this episode of our podcast, On The Merits, the two reporters talk about where these lawyers may land and whether they risk being blackballed from Big Law. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

Fenwick & West's decision to seek equity in one of its tech startup clients is now, with the benefit of hindsight, looking like a stroke of genius. Figma Inc. last week had a blockbuster IPO and Fenwick made money not only advising its client on going public, but also through the firm's ownership of almost 900,000 shares in the design and collaboration software company, according to Bloomberg Law reporter Brian Baxter. The value of those shares more than tripled on July 31, Figma's first day of public trading. On this episode of our podcast, On The Merits, Baxter talks about why this type of non-traditional compensation model can make some law firms outside Silicon Valley a bit squeamish. He also talks about how, despite the huge potential upsides, there are financial and ethical risks when a firm owns a stake in its own clients. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

Susman Godfrey has shown it's willing to take on high-risk, high-reward lawsuits with unconventional fee structures. Its leaders say this risk appetite is ingrained in the firm's culture. "When we vote to take a case, it is a case of the firm," Kalpana Srinivasan, a managing partner at the firm, said on our podcast, On The Merits. "You hear sometimes there may be other places where there are a couple of partners who are trying to do contingent work or doing something that may be different from the traditional financial model of that firm, and then the success or failure of that matter can be very much tied to that partner. We want to take on risk as a firm." Srinivasan and her co-managing partner, Vineet Bhatia, spoke to Bloomberg Law editor Jessie Kokrda Kamens about their firm's unique culture that shies away from lateral hires, and also about why they bristle at being described as a "litigation boutique." This conversation is a part of our Leading Law Firms project, in which we score law firms using more than just traditional metrics like a firm’s bottom line. Throughout this month, we’ve been sharing interviews with the leaders of other firms like McDermott Will & Emery, Cahill Gordon & Reindel, and DLA Piper. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

Neal Katyal and Gurbir Grewal, lawyers who command well over $2,000 an hour for their services, are slashing their rates to defend two New Jersey municipalities against a Justice Department lawsuit over their "sancutary city" policies. This on its own would be noteworthy, but what makes it even more interesting is that their law firm—Manhattan-based Milbank LLP—reached a deal with the White House earlier this year, pledging $100 million in free legal services on shared focus areas to avoid getting hit with a punitive executive order. On this episode of On The Merits, Bloomberg Law reporter Alex Ebert talks about why the Justice Department is suing these cities, just how big of a discount they're getting from Milbank, and whether the work could prompt the White House to rip up its the deal with the firm. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

Junior lawyers can climb the ranks faster than ever before, according to DLA Piper leader Frank Ryan, but they also should think about checking their politics at the door. Associates "need to be mindful of over rotating into politics," Ryan, the firm's global co-chair, said in the latest edition of Bloomberg Law's On The Merits podcast. "We live in an overly partisan world. Yes, you have strongly held beliefs—and, yes, those are very important—but your job is to serve others. Whether you like that or don't like that, that is the nature of the profession." Ryan talked with Bloomberg Law editor Jessie Kokrda Kamens about why he thinks younger lawyers can stymie their career advancement by opining publicly on hot button issues. He also explained how his firm is looking to expand “in a much more thoughtful way" after growing to one of the largest in the world. This conversation is a part of our ⁠Leading Law Firms project⁠, in which we score law firms using more than just traditional metrics like a firm’s bottom line. Throughout this month, we’ve been sharing interviews with the leaders of other firms like McDermott Will & Emery and Cahill Gordon & Reindel. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

Former Davis Polk associate Ryan Powers started writing op-eds for local newspapers earlier this year criticizing the Trump administration's agenda. A few months later, the Wall Street firm he worked for fired him. Powers' story is one example of how some Big Law lawyers have had to make tough career choices since the president retook office. On this episode of our podcast, On The Merits, Powers speaks with Bloomberg Law reporter Tatyana Monnay about what happened and the purposefully ambiguous reason Davis Polk cited for his dismissal. The firm declined to comment for this podcast. Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.