Feature Article |
The Last Days of the Philadelphia Lawyer
By Tom McGrath
In December 2006, press reports revealed that merger talks were under way between Mark Alderman’s firm, WolfBlock, and the Philadelphia firm of Cozen O’Connor. On one level, the discussions were eyebrow-raising, since the firms were so different. Wolf was a century old; in its heyday, it was known as the preeminent Jewish firm in the city, and its practice focused heavily on real estate and estate planning. Cozen, in contrast, was a relative upstart, having been created in the early 1970s by Steve Cozen; it was mainly a litigation firm.
Still, on another, more visceral level, the proposed pairing was understandable. Mergers among firms are now so commonplace, and are seen as such an integral part of where the legal industry is headed, that a strange psychology has taken hold — one that can only be compared to kids lining up dates for the junior prom. No one, it seems, wants to be left without a partner, so all sorts of odd pairings are imagined, if not executed. “Everybody is talking to everybody” is the phrase you hear, well, practically everybody uttering.
As it turned out, the differences between the Wolf and Cozen firms trumped the cultural pressure to merge — “There were some structural issues,” says Steve Cozen — and the talks fell apart. But just because this particular marriage couldn’t be arranged didn’t mean either party was resigning itself to the law-firm equivalent of spinsterhood.
In 2007, WolfBlock had gross revenues of $173 million, and average partner income of about $502,000. At the time of the proposed Cozen merger, WolfBlock was the ninth most profitable firm in Philadelphia, and the 145th in the country. That we actually know how much the lawyers at Wolf made is somewhat curious, since unlike public corporations, which have a fiduciary responsibility to their shareholders to track how well business is performing, Wolf is a private entity, owned by and operated solely for the lawyers at the firm. Telling the world how much they make is like your neighbor enclosing his tax return with his Christmas card: Peg and I were thrilled to pull in $133,000 — seven percent more than last year! Okay. Thanks for sharing. So why does Wolf — and nearly every other major firm in America — share its earnings? The answer to that question — and to the broader question of why the legal profession in America currently operates the way it does — can be traced back to changes that started in the 1980s. Actually, it can be traced back to the influence of one man.
In 1979, Steve Brill, an ambitious, aggressive young man four years out of Yale Law School, launched a publication called The American Lawyer. Whether Brill had much of a legal mind is tough to tell — he’s never really practiced much law — but there was no doubting his editorial chops. Like all brilliant editors, he had a knack for knowing what people really want to read, and for getting his reporters and editors to deliver it. When it came to covering the legal world, Brill’s genius was to approach it not as a musty, staid profession, but as a juicy, high-stakes club filled with power grabs, ego clashes and huge personalities.
The ultimate expression of Brill’s editorial approach came in 1986 with the introduction of an annual list called “The Am Law 100.” Other publications had ranked law firms before, but their lists had always been based on the number of lawyers the firms had. Brill’s genius was to rank the firms based on something juicier — indeed, on the thing attorneys had always wondered and whispered about but never really knew: what kind of money firms earned.
Still, on another, more visceral level, the proposed pairing was understandable. Mergers among firms are now so commonplace, and are seen as such an integral part of where the legal industry is headed, that a strange psychology has taken hold — one that can only be compared to kids lining up dates for the junior prom. No one, it seems, wants to be left without a partner, so all sorts of odd pairings are imagined, if not executed. “Everybody is talking to everybody” is the phrase you hear, well, practically everybody uttering.
As it turned out, the differences between the Wolf and Cozen firms trumped the cultural pressure to merge — “There were some structural issues,” says Steve Cozen — and the talks fell apart. But just because this particular marriage couldn’t be arranged didn’t mean either party was resigning itself to the law-firm equivalent of spinsterhood.
In 2007, WolfBlock had gross revenues of $173 million, and average partner income of about $502,000. At the time of the proposed Cozen merger, WolfBlock was the ninth most profitable firm in Philadelphia, and the 145th in the country. That we actually know how much the lawyers at Wolf made is somewhat curious, since unlike public corporations, which have a fiduciary responsibility to their shareholders to track how well business is performing, Wolf is a private entity, owned by and operated solely for the lawyers at the firm. Telling the world how much they make is like your neighbor enclosing his tax return with his Christmas card: Peg and I were thrilled to pull in $133,000 — seven percent more than last year! Okay. Thanks for sharing. So why does Wolf — and nearly every other major firm in America — share its earnings? The answer to that question — and to the broader question of why the legal profession in America currently operates the way it does — can be traced back to changes that started in the 1980s. Actually, it can be traced back to the influence of one man.
In 1979, Steve Brill, an ambitious, aggressive young man four years out of Yale Law School, launched a publication called The American Lawyer. Whether Brill had much of a legal mind is tough to tell — he’s never really practiced much law — but there was no doubting his editorial chops. Like all brilliant editors, he had a knack for knowing what people really want to read, and for getting his reporters and editors to deliver it. When it came to covering the legal world, Brill’s genius was to approach it not as a musty, staid profession, but as a juicy, high-stakes club filled with power grabs, ego clashes and huge personalities.
The ultimate expression of Brill’s editorial approach came in 1986 with the introduction of an annual list called “The Am Law 100.” Other publications had ranked law firms before, but their lists had always been based on the number of lawyers the firms had. Brill’s genius was to rank the firms based on something juicier — indeed, on the thing attorneys had always wondered and whispered about but never really knew: what kind of money firms earned.
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