A law firm is a business entity formed by one or more lawyers to engage in legal practice. The main services provided by law firms are to advise clients (individuals or companies) about their legal rights and responsibilities, and to represent clients in civil or criminal cases, business transactions, and other matters where legal advice and other assistance are sought.
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Law firms are organized in a variety of ways, depending on the jurisdiction of the company's practice. General settings include:
- sole proprietorship, where the lawyer is the law firm and is responsible for all profits, losses and liabilities;
- A general partnership, in which all attorneys who are members of a company share ownership, profits and liabilities;
- A professional company, issuing shares to an attorney in a manner similar to a business enterprise;
- Limited company, where the owner-lawyers are called "members" but not directly responsible to third party creditors of law firms (prohibited against public policy in many jurisdictions but permitted on the other hand in the form of "Limited Company Professional" or "PLLC");
- Professional associations, which operate in the same manner as professional companies or limited liability companies;
- A partnership with limited liability (LLP), in which proprietor-owner lawyers partner with each other, but no partner is liable for creditors of any law firm or any partner responsible for any partner's negligence others. LLP is taxed as a partnership while enjoying the protection of corporate responsibility.
Restrictions on ownership ownership
In many countries, including the United States, there are rules that only lawyers may have ownership interests in, or become managers, law firms. Thus, law firms can not quickly raise capital through an initial public offering on the stock market, like most companies. They should raise capital through additional capital contributions from existing or additional equity partners, or should take on debt, usually in the form of a line of credit secured by their receivables.
In the United States, the full bar for nonprofit ownership has been codified by the American Bar Association as a paragraph (d) of Rule 5.4 of the Rules of Professional Behavior Model and has been adopted in one form or another in all US jurisdictions, except the District of Columbia. However, the rule D.C. is narrowly adjusted to allow equity ownership only by non-lawyer partners who actively assist corporate lawyers in providing legal services, and not allow for the sale of shares of ownership to a passively non-nusak investor. Britain has a similar rule that prohibits non-lawyers ownership, but under the reforms implemented by the 2007 Legal Services Act, law firms have been able to take a number of non-lawyers and lawyers allowed to enter into various non-business relationships - lawyers and businesses owned by non-lawyers. This allows, for example, grocery stores, banks, and community organizations to hire lawyers to provide basic in-store and online legal services to customers.
The rules are controversial. This is justified by many people in the legal profession, especially the American Bar Association who reject the proposals to change the rules in the 20/20 Ethics reform, which is necessary to prevent conflicts of interest. In a hostile justice system, a lawyer has the duty to be an enthusiastic and loyal advocate on behalf of the client, and also has an obligation not to over-bundle clients. Also, as a court clerk, an attorney has an obligation to be honest and not to file reckless cases or increase frivolous defenses. Many in the legal profession believe that lawyers working as shareholders-employees of publicly traded law firms may be tempted to evaluate decisions in respect of their effects on share and stockholder prices, which will be directly contrary to the attorney's duties to clients and to the courts. However, the critics of the rule believe that it is an inappropriate way to protect clients' interests and that severely limits the potential for cheaper and higher quality legal service innovations that can benefit both the average consumer and the business.
Multinational law firms
Law firms operating in many countries often have complex structures involving many partnerships, especially in jurisdictions such as Hong Kong and Japan that limit the partnership between local and foreign lawyers. One structure that is largely unique to large multinational law firms is Swiss Verein, spearheaded by Baker & amp; McKenzie in 2004, where many national or regional partnerships form associations in which they share branding, administrative functions and operating costs, but maintain separate sources of income and often separate partner compensation structures. Other multinational law firms operate as a global partnership around the world, such as UK or US limited liability partnerships, in which partners also participate in local operations entities in different countries as required by local regulations.
Financial indicators
Three financial statistics are typically used to measure and assess the performance of law firms:
- Gain per partner (PPP): Net operating income divided by number of equity partners. High PPPs are often associated with corporate prestige and appeal to potential equity partners. However, this indicator is vulnerable to manipulation by reclassifying less beneficial partners as non-equity partners.
- Revenue per attorney (RPL): Gross revenue divided by number of lawyers. This statistic shows the ability to generate revenue from corporate attorneys in general, but does not take into account company costs such as office compensation and office costs.
- Average compensation from partners (ACP): The total amount paid to equity and non-existent partners (ie, net operating income plus uncompensated partner compensation) is divided by the total amount of equity and unlawful partners. This results in more inclusive statistics than PPP, but remains vulnerable to manipulation by changing cost policies and reclassifying unfavorable partners as partners.
Maps Law firm
Structure and promotion
Partnership
Law firms are usually organized around partners, who are co-owners and business directors of legal operations; partners, who are employees of the firm with prospects of becoming partners; and various staff employees, providing paralegal, clerical, and other support services. An employee may have to wait 11 years before a decision is made about whether the partner "makes partners." Many law firms have "up and out policies" (spearheaded around 1900 by partner Paul Cravath of Cravath, Swaine & Moore): partners who do not make partners obligate to resign and join other firms, do it themselves as solo practitioners, work within the company in the company's legal department, or changing professions (very high levels of saturation in the law).
Make partners very prestigious in large or medium-sized companies, because competition naturally results from a higher partner-to-partner ratio. Such companies may take advertisements in professional publications to announce who has become a partner. Traditionally, partners share directly in corporate profits, after paying salaried employees, owners, and the usual cost of furniture, office supplies, and books for law libraries (or database subscriptions). Partners in limited liability partnerships can mostly operate independently in terms of developing new businesses and serving clients existing in their business books.
Partner compensation methods vary widely among law firms. At major US law firms, the "compensation spread" (the ratio between the highest partner salary and the lowest partner salary) among firms that disclose information ranges from 3: 1 to 24: 1. Higher spreads are intended to promote individual performance, the lower is meant to promote teamwork and collegiality.
Many major law firms have moved into a two-tier partnership model, with equity and non-equity partners. Equity partners are deemed to own shares in the company, and share in the profits (and losses) of the company. Non-equity partners generally pay a fixed salary (albeit much higher than their counterparts), and they are often given certain limited voting rights in connection with the company's operations.
The oldest sustainable partnership in the United States is Cadwalader, Wickersham & amp; Taft, was founded in 1792 in New York City. The oldest law firm in sustainable practice in the United States is Rawle & amp; Henderson LLP, founded in 1783 in Philadelphia.
Termination of a partnership
It is very rare for couples to be forced out by fellow partners, although that can happen if a partner commits a crime or malpractice, suffers from a mental illness, or does not contribute to the overall profitability of the company. However, some large companies have written in their partnership agreement that forced retirement age for partners, which could be anywhere from ages 65 and over. In contrast, most corporate executives risk higher firing, even when the underlying cause is not their fault immediately, such as a decrease in the company's stock price. Around the world, partner retirement age can be difficult to estimate and often varies greatly, especially since in many countries it is illegal to mandate retirement age.
The role of "advice"
In the United States, Canada, and Japan, many large and medium-sized companies have lawyers with "lawyer" positions, "special advisers" or "advisers." As noted by the California Supreme Court, the title has obtained several related but different definitions that do not easily fit into traditional partner-partner structures. These lawyers are people who work for the company, like colleagues, although some companies have independent contractor relationships with their lawyers. But unlike colleagues, and more like partners, they generally have their own clients, managing their own cases, and overseeing employees. This relationship is structured to allow more senior lawyers to share resources and "brand name" companies without becoming part of management decisions or profit sharing. Titles are often seen among former colleagues who are not partners, or who are recruited laterally to other companies, or who work as internal advisors and then return to large corporate environments. In some companies, the title of "advice" is given to retired partners who maintain relationships with companies. Sometimes "advice" refers to senior or experienced lawyers, such as foreign legal consultants, with particular experience in certain aspects of law and practice. They are employed as independent contractors by large companies as special arrangements, which can yield favorable outcomes for partnerships. In certain situations "advice" may be considered a transitional status within the company.
Mergers and acquisitions between law firms
Mergers, acquisitions, shares and reorganizations take place between law firms as in other businesses. Business-specific books and attorney specialties as well as professional ethical structures around conflicts of interest may cause the company to split up to pursue different clients or practices, or merge or recruit experienced lawyers to acquire new clients or practice areas. Results often vary between companies that experience the transition. Companies that acquire new areas or departments of practice through more complex and demanding (and usually more profitable) recruits or mergers can see the company's focus, organization, and resources shift dramatically toward the new departments. In contrast, companies can be combined among experienced lawyers as partners for mutual funding and resources, while different departments and practice areas within the new company maintain a significant degree of autonomy.
The incorporation of law firms tends to be asortative, as only law firms operating in similar legal systems tend to join. For example, US companies often join British law firms, or law firms from other common law jurisdictions. The main exceptions are King & amp; Wood Mallesons, a multinational law firm that is the result of a merger between an Australian law firm and a Chinese law firm.
Although mergers are more common among better economies, slowed down slightly during the recession, big companies sometimes use mergers as a strategy to increase revenue during the recession. Nevertheless, data from Altman Weil show that only four companies joined in the first half of 2013, compared with eight in the same period in 2012, and this is taken by them as an indication of a moral decline related to the legal economy and the number of requests.
Size
Law firms can vary in size. The smallest law firm is a self-employed lawyer, who is the majority of lawyers in almost all countries.
Smaller companies tend to focus on specific legal specialties (eg patent law, labor law, tax laws, criminal defense, personal injury); Larger companies can consist of several special practice groups, allowing companies to diversify their client base and market, and to offer various services to their clients.
Large law firms usually have separate litigation and transactional departments. The transactional department advises clients and handles transactional legal work, such as drafting contracts, handling necessary applications and legal archiving, and evaluating and ensuring compliance with relevant laws; while the litigation department represents clients in court and handles the necessary matters (such as discovery and motion brought to justice) during the litigation process.
Anglo-American Development
boutique law firm
Lawyers in small towns and towns may still have ancient general practices, but most urban lawyers tend to be highly specialized because of the tremendous complexity of law today. Thus, some small firms in cities specialize in practicing just one type of law (such as employment, antitrust, intellectual property, investment funds, telecommunications or aviation) and are called boutique law firms.
Virtual Law Firm
The development of the 21st century is the rise of a virtual law firm, a company with a virtual business address but no bricks & amp; the location of the mortar office is open to the public, using modern telecommunications to operate from remote locations and provide its services to international clients, avoiding the cost of maintaining physical premises with a lower overhead than traditional law firms. This lower cost structure allows virtual law firms to charge clients on a contingency basis rather than by paid hours paid previously by a courtier.
"Megafirms" or Biglaw
The largest law firm has more than 1,000 lawyers. These companies, often called "megafirms" or "bigbaws ," typically have offices on multiple continents, charge US $ 750 per hour or higher, and have a high ratio of support staff per attorney. Due to the nature of local and regional firms, the relative size of firms varies.
"Full service"
The largest companies want to call themselves "Big-Law" companies because they have sections that specialize in every category of legal work, which in the US usually means merger and acquisition transactions, banking, and some types of high-risk corporate litigation. These companies rarely do personal plaintiff injury work. But the biggest law firm is not too big compared to other big business (or even other professional services companies). In 2008, the largest law firm in the world was the British company, Clifford Chance, which had revenues of more than $ 2 billion. This can be compared to $ 404 billion for the world's largest company with Exxon Mobil turnover and $ 28 billion for Deloitte's largest professional services company.
Worldwide
The largest law firm in the world is headquartered in the UK and the United States. However, large corporations more than 1,000 lawyers are also found in Australia (Minter Ellison (1,500 lawyers), Chinese (Dacheng 2,100 lawyers) and Spanish (Garrigues, 2,100 lawyers).The American licensing lawyers system on a state-by-state basis, the tradition has offices centers in a single US state and a close focus on per-partner profits (as opposed to large-scale) to date limit the size of most American law firms.So while the world's most profitable law firm remains in New York, four of the six largest companies in the London-based world of Britain, but the large size of the United States results in a large number of large corporations as a whole - a 2003 paper noted that the United States alone has 901 law firms with over 50 lawyers, while there are only 58 such companies in Canada , 44 in the UK, 14 in France, and 9 in Germany. There is an increasing trend towards the globalization of law firms.
Due to its size, law firms in the US and Britain are the most prestigious and powerful in the world, and they tend to dominate the international market for legal services. A 2007 research paper noted that companies from other countries only took their leftovers: "[M] uch of this competition is relatively orderly where Australian, New Zealand and Canadian firms mostly compete for businesses that are not required by UK law firms or America. "
Recession
As a result of the US recession in 2008 and 2009, many US law firms have significantly reduced staff, and some have closed. The Denver Post reported that the major law firms had slashed more than 10,000 jobs nationwide in 2009. On February 12, 2009, Bloomberg reported that 700 jobs were cut one day at law firms across the country. Among the closed companies included Heller Ehrman, a San Francisco-based company founded in 1890 and Halliwells of England. Among the survivors, the firm layoffs became so common that trade publications such as American Lawyers produced an ongoing "Current List" from a national law firm that cut jobs.
Salary
The legal company's pay structure usually depends on the size of the firm. Salaries of small companies vary in many countries and from one country to another, and are not often available to the public. Since most countries do not have a unified legal profession, there is often a significant income difference among the various legal professions in a particular country. Finally, the availability of salary data also depends on the existence of journalists and sociologists who are able to collect and analyze such data. The Association of Legal Administrators (ALA) produces an annual study on Compensation and Benefits of the Law Firm, and can be found at http://alanet.org/compsurvey
United States
The US is currently the only country with enough lawyers, as well as journalists and sociologists who specialize in learning it, to have widely available data on the pay structure at big law firms.
In 2006, the average salary of new graduates ranged from US $ 50,000 per year in small companies (2 to 10 lawyers) to US $ 160,000 per year in very large companies (over 501 lawyers). The salary distribution is very bimodal, with the majority of new lawyers earning high or low on the scale, and an average salary of US $ 62,000. In the summer of 2016, New York Cravath law firm, Swaine & amp; Moore raised his first year's associate salary to $ 180,000. Many big national law firms based in New York soon followed.
The traditional salary model for law firm associations is key compensation, in which the salary of the association goes up with a fixed amount each year from college's peer law graduation. However, many companies have switched to a level-based compensation system, where associations are divided into three (or sometimes four) levels based on a mastered skill. In 2013, the average salary for the three-tiered association was $ 152,500, $ 185,000 and $ 216,000 among major companies (over 700 attorneys), and $ 122,000, $ 143,500 and $ 160,000 among all companies.
Some of the leading law firms, such as Goodwin Procter and Paul Hastings, provide generous signing bonuses (eg, $ 20k) to first-year employees holding JD/MBA degrees.
Another way lawyers associations increase their earnings and/or improve their working conditions is through lateral steps to other law firms. A recent survey by LexisNexis, shows that over 95% of law firms consulted are meant to hire a lateral lawyer within the next two years. Although success for both lawyers and law firms in lateral recruitment has been questioned. The National Legal Review reports that the cost of hiring, compensating, and integrating lateral lawyers can reach $ 600,000 and that 60% of hiring lateral lawyers fail to flourish in their new law firm.
United Kingdom
British companies usually practice key compensation. In London, the entry-level solicitor's salary (NQ - Newly Qualified) typically: (i) Ã, Â £ 38,000-54,500 in niche and boutique (ii) Ã, Â £ 61,000-65,500 companies (iii) Ã, Â £ 65,000-105,000 in international companies.
A senior colleague with a six-year experience can make Ã, £ 68,000-120,000 in a national company or more than Ã, Â £ 160,000 in a global company. The pay rate is lower in areas outside of London.
Australia
Australia has regional variations in lawyer salaries, with the highest salary rates in Sydney, followed by Melbourne, Perth, Brisbane, then Adelaide. Salaries vary between top, middle, and small companies. At top-tier companies in Sydney, the salaries of attorneys who have been accepted for practice range from $ 75,000 to $ 92,000 and partners earned an average of $ 1,215,000. In Sydney, the initial salary for a recognized attorney ranges between $ 65,000 and $ 82,000 Most Australian lawyers are not accepted until 10 months into their time at their law firm, as the initial period involved supervised legal training before acceptance was given.
Usually in Australian law firms are in the key-step system for the first two years of practice, which follows a salary increase depending on the performance being assessed, in large measure, with the satisfaction of the billable targeted target.
Hong Kong
Qualified colleagues in leading companies in Hong Kong typically earn HK $ 840,000 to HK $ 948,000, with partners in HK $ 1.6 million to HK $ 4 million range; many companies pay New York salaries with cost of living adjustments.
Singapore
In local companies in Singapore, partners in the first three years usually earn $ 60,000 to $ 100,000, while mid-grade associates (4-7 years) earn $ 110,000 to $ 180,000 and senior employees (8 years) earn $ 160,000 or more. International companies pay far more, with senior colleagues often earning more than $ 250,000.
India
There is more information available for beginner level soups. First-year lawyers earn between INR 25,000 to INR 1,10,000 a month. The Tier 1 law firm provides the best payroll package, approximately INR 15,00,000 per year. There is a big difference in salary ranges in big cities like Chennai and Delhi compared to other cities like Mumbai and Kolkata.
Location
Most law firms are located in office buildings of various sizes, from simple one-story buildings to some of the world's tallest skyscrapers (although it was not until 2004 that Paul Hastings was the first company to put his name on a skyscraper).
At the end of 2001, it was widely publicized that the personal injury embezzlement company John C. Dearie in New York state had experimented with a bus-sized "mobile office". The company insisted it was not "chasing an ambulance." It claims that law firms on wheels are more comfortable for personal injury plaintiffs, who often recover from severe injuries and thus find it hard to travel far from their homes for intake interviews.
Ratings
Because legal practice is hostile, the ratings of law firms are highly relied upon by potential partners, lateral employees, and legal clients. Substantive ratings usually include areas of practice such as The American Corporate Scorecard and IP Top Companies. Workplace rankings are addressed to lawyers or law students, and cover topics such as quality of life, hours of work, family friendliness and salary. Finally, the statistics ratings generally include earnings-related data such as earnings per partner and earnings per attorney. Third-party attorney ratings services such as Chambers and Partners and Martindale-Hubbell are generally very competitive and can help improve the professional profile of individual lawyers, and to capture this marketing advantage, more than 1,200 lawyer and/or award ratings have sprung up in the US. the bar association has paid attention to the productive growth of award-winning attorneys and has determined that attorneys can refer to the award in advertisements "only when the basis for benchmarking can be verified" and the awarding organization "has made insufficient investigations into the fitness of individual lawyers.
In an October 2007 press conference reported in The Wall Street Journal and The New York Times, a group of law students Building a Better Law Profession released the first annual ranking of top law firms by average billable hours, pro bono participation, and demographic diversity. Most notably, the report ranked the percentage of women, African-Americans, Hispanics, Asian-Americans, and gay & amp; lesbian at America's top law firm. The group has sent information to top law schools across the country, encouraging students to take demographic data into account when choosing a place to work after graduation. As more and more students choose a place to work based on the company's diversity ratings, companies face increasing market pressure to attract top recruits.
In popular culture
A number of television shows, films and books have revolved around relationships at fictitious law firms, highlighting both public interest and misperceptions about the life of lawyers in high-power settings.
One of the popular American legal television drama series is called Suits. There is one popular American dramedy, also known as, a comedy-drama called Boston Legal created by David E. Kelley and produced in association with 20 th Century Fox Television for ABC. This is a spin-off from the long-running Kelly series, The Practice, following the exploits of former Alan Shore characters at Crane's law firm, Poole & Schmidt.
One of the most famous legal films is called The Firm, adapted from a book written by John Grisham.
See also
- Five big law firms (South Africa)
- Six big law firms (Australia)
- Bitter Lawyer
- Business (legal) books
- Network law firm
- List of the 100 biggest law firms
- The Magic Circle
- Multidisciplinary professional services network
- Offshore magic circle
- Seven Sisters (Canadian law firm)
- White shoe company
- Company law firm
References
External links
- The law firm in Curlie (based on DMOZ)
- Different types of law firms in the UK
Source of the article : Wikipedia
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