Am Law 100's New Metric: Value Per Lawyer
July 28, 2005
For 20 years, The American Lawyer has measured the economics of law firms, first with The Am Law 50 and 75, more recently with The Am Law 200. Throughout, we've kept to the same metrics: gross, revenue per lawyer, profits per partner, and the Am Law Profitability Index (API). These lists helped inform and change the profession. (Note that we didn't say ruin.) We published them again this month with one significant addition that we think reflects the changed nature of the business of law: Value Per Lawyer (VPL).
In the Spotlight: Being Gun-Shy ' Difficulties Surrounding the Trigger of Rights of First Refusal and First Offer
June 30, 2005
The right of first refusal ('ROFR') and its close cousin, the right of first offer ('ROFO'), collectively sometimes called pre-emptive rights, are devices used to afford the grantee a degree of flexibility in potentially buying or leasing the subject property at a future time. These rights can be considerably more troublesome, especially to grantors, than may be immediately apparent to many real estate deal makers. Many who have been 'burned' recognize that the problems include: 1) financial loss and delay in completing a transaction that arise from dampened interest in the subject property on the part of third-party potential bidders, and 2) disputes (sometimes resulting in litigation) that arise from issues surrounding the triggering, execution, and preservation of the right. This article focuses on the second problem, with special emphasis on disputes that revolve around the triggering of the pre-emptive rights. It also suggests certain drafting implications that follow from the analysis.
How To Improve Firm Profitability
June 29, 2005
Many lawyers measure their firm's profitability the way a company does ' as a percentage of sales. However, the correct way to measure the profitability of a law firm, whether it is a partnership or a professional corporation, is the net income per equity partner (NI/EP) (or shareholder).
Gephardt Joins DLA Piper
June 29, 2005
DLA Piper Rudnick Gray Cary has netted former House Minority Leader Richard Gephardt (D-MO), who retired from Congress in January.
Around the Firms
June 29, 2005
Tax Shelter Suit Against Sidley Austin, Deutsche Bank May Proceed <br>Brobeck Fight Turns to Venue Choice
USERRA Explained
June 29, 2005
What Is the Uniformed Services Employment and Reemployment Rights Act of 1994? The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA)…
IRS Modifies 'Use-It-Or-Lose-It' Rule For Section 125 Cafeteria Plans
June 29, 2005
The Internal Revenue Service has modified the rule prohibiting deferred compensation under a Section 125 cafeteria plan to allow a grace period of up to 2.5 months after the end of the plan year to use the benefits or contributions before those amounts are forfeited under the "use-it-or-lose-it" rule. Notice 2005-42, 2005-23 I.R.B. 1 (May 18, 2005) (the Notice) permits a 2.5- month grace period during which additional expenses can be incurred and which will be reimbursed from contributions made in the plan year preceding the grace period. An employer may adopt a grace period for the current cafeteria plan year by amending the plan before the end of the current plan year.
A Primer on Protecting Investments In Motion-Picture Productions
June 29, 2005
If not for the infusion of private capital, many independent films ' generally films produced outside the traditional studio system ' would probably never have been made. That's because banks are unlikely to loan money for such an uncertain and risky venture ' the success of which is greatly dependent on the fickle nature of audiences. But most independent film investors are either unaware of, or pay little attention to, the realities of the theatrical film market. Given the limited potential for widespread independent film success and other inherent investment risks, an entertainment attorney must be diligent and proactive to fully protect a client's film investment.
Perils Of Unfunded Obligations: 4 Key Questions
June 28, 2005
As summarized by <i>A&FP</i> Board member Bill Brennan of Altman Weil, Inc. an "unfunded retirement program" is essentially a promise to pay partners a retirement benefit in the future from the firm's future profits. About 24% of law firms have an unfunded retirement plan (down from 57% in 1990), according to the <i>2005 Retirement and Withdrawal Survey for Private Law Firms</i>, prepared by Altman Weil, Inc. In about 15 years over 30,000 lawyers will be retiring each year. To the extent these partners must be paid retirement benefits from the then-current profits of their respective law firms, those firms unprepared for this potentially huge financial liability will be at risk, and some may not survive.
Unfunded Plans: A More Upbeat View
June 28, 2005
Readers of the accompanying roundtable discussion may find themselves wondering if there's currently anything good to say about unfunded retirement plan obligations. About the only glimmer of hope was the allusion by one discussant (Bill Brennan) to "rare situations" where such plans might be required. <br>Here to speak up for such exceptional situations is Jeff Stevenson, Managing Director of Chicago Consulting Actuaries
