Law Firms At the Top of GC Speed-Dial Lists

(Editor's note: It's interesting to compare the explanatory factors offered for these success stories with the much longer lists of factors law firms routinely worry about. Sheer effectiveness in getting critical jobs done is justifiably given major weight, as is efficiency. But do a law firm's professional integrity, billing practices and customer relationship management enter into GC discussions at all?)

For the past 5 years, Corporate Counsel has conducted a survey of Fortune 250 general counsel, asking them to list their 'primary' outside counsel. This year, 93 companies provided information on their top law firms for corporate transactions, litigation, labor and employment, and intellectual property. Those companies named a total of 380 law firms.

Staying Power of Winners

New York-based Skadden, Arps, Slate, Meagher & Flom has ranked as the No. 1 go-to firm for corporate transactions nearly every year. This year it was edged out by one mention by its rival at the top, Davis Polk & Wardwell. Over the same 5 years, Chicago-based Kirkland & Ellis has captured the No. 1 spot for litigation.

Chief legal officers readily offer a laundry list of positives to justify devotion to their top firms. William Barr, general counsel of New York-based Verizon Communications Inc., says that he uses more than 100 outside law firms, but that he turns to Kirkland & Ellis for 'big, important litigation,' as well as smaller cases, regulatory matters and, most recently, work for Verizon Wireless, the company's joint venture with Vodafone Group Plc. Aside from the results they've achieved, Barr says the Kirkland & Ellis litigation group has a lot of depth ' 'strength at every level.' Another plus, he says, is the firm's efficient handling of its cases: 'They don't throw unnecessary bodies at a matter to gin up the billables.'

Still, plenty of law firms have the same qualities. And with few exceptions, for the past 5 years, a remarkably stable group of firms has monopolized the top 10 spots in each practice area we survey. Six of the top corporate transactions firms this year showed up in 2002, the first year Corporate Counsel did the survey (Skadden; Davis Polk & Wardwell; Mayer, Brown, Rowe & Maw; Simpson Thacher & Bartlett; Jones Day; and Sidley Austin). In litigation, six firms appeared in both the 2006 and 2002 top 10 (Kirkland; Jones Day; O'Melveny & Myers; Mayer, Brown; King & Spalding; and McGuireWoods). What's keeping these firms on top? Size, skill, the strength of the brand name, the effect of convergence (more on this below) and a tendency to reach out to large, expensive firms when there's big, potentially costly legal business at hand.

Bet-the-Company Factor

While chief legal officers like to talk big about keeping a close eye on legal bills, when it comes down to a bet-the-company case, they typically say that they want the massive firepower of a large firm on their side ' no matter what the expense. According to the most recent AmLaw 100 survey, the top 10 litigation firms in the survey average 1186 lawyers, which is significantly larger than the average Am Law 100 firm.

Convergence Factor and Exceptions

Convergence (remember that?) also plays its part in the survey. While many companies have refined their roster of preferred providers in recent years, the big firms on Corporate Counsel's list haven't been among the casualties. Consultant Rees Morrison says he doesn't find this surprising. 'Convergence favors bigger firms,' since they are equipped to handle a wider array of matters, says Morrison, a principal at the Somerset, NJ-based legal consulting firm Hildebrandt International Inc.

But size isn't the whole story. Firms with a thousand-plus lawyers dot today's legal landscape like poppy seeds on a bagel. So what's the edge keeping the top firms on top? Their brand names, says Daniel DiLucchio Jr., a principal in the Newtown Square, PA, headquarters of legal consulting firm Altman Weil Inc. He says cost control, the one major factor that can cause GCs to shop around, just doesn't happen at this level. For example, Manly says that he uses local firms such as Robinson, Bradshaw & Hinson to handle small transactions ' 'they produce comparable work at half the price' ' but there comes a point when 'a transaction becomes so complicated it's worth paying the $800 or $900' an hour for a senior Skadden partner.

Even the poster child for convergence, E.I. du Pont de Nemours & Co., goes outside its network of 42 'primary law firms' for large, complicated M&A transactions, says associate general counsel Roger Arrington. In our survey, for the last 3 years, DuPont has listed both Cravath, Swaine & Moore and Skadden among its top outside counsel for corporate transactions ' but they don't appear on the company's official primary firm list. At DuPont, there's primary, and then there's primary.

Of the four practice areas surveyed, labor and employment shows the most consistency.

One Surprise

One interesting trend: the wholesale disappearance of Washington, DC, firms from the list of most-mentioned litigation firms. In the first surveys of this series, four DC firms ' Howrey; Akin Gump Strauss Hauer & Feld; Covington & Burling; and Williams & Connolly ' appeared in the top 10. Today, not a one. Morrison attributes this to the Bush administration. With the Federal Trade Commission and other agencies gone 'toothless,' he says, there's less regulatory enforcement ' hence, less need for Washington's heavy hitters.

But other than those probably temporary downturns, the big guys stay on top, buoyed by the semper fidelis disposition of corporate counsel. As Verizon's Barr says, 'Why shop around when you're successful with what you've got?'

(Editor's note: It's interesting to compare the explanatory factors offered for these success stories with the much longer lists of factors law firms routinely worry about. Sheer effectiveness in getting critical jobs done is justifiably given major weight, as is efficiency. But do a law firm's professional integrity, billing practices and customer relationship management enter into GC discussions at all?)

For the past 5 years, Corporate Counsel has conducted a survey of Fortune 250 general counsel, asking them to list their 'primary' outside counsel. This year, 93 companies provided information on their top law firms for corporate transactions, litigation, labor and employment, and intellectual property. Those companies named a total of 380 law firms.

Staying Power of Winners

New York-based Skadden, Arps, Slate, Meagher & Flom has ranked as the No. 1 go-to firm for corporate transactions nearly every year. This year it was edged out by one mention by its rival at the top, Davis Polk & Wardwell. Over the same 5 years, Chicago-based Kirkland & Ellis has captured the No. 1 spot for litigation.

Chief legal officers readily offer a laundry list of positives to justify devotion to their top firms. William Barr, general counsel of New York-based Verizon Communications Inc., says that he uses more than 100 outside law firms, but that he turns to Kirkland & Ellis for 'big, important litigation,' as well as smaller cases, regulatory matters and, most recently, work for Verizon Wireless, the company's joint venture with Vodafone Group Plc. Aside from the results they've achieved, Barr says the Kirkland & Ellis litigation group has a lot of depth ' 'strength at every level.' Another plus, he says, is the firm's efficient handling of its cases: 'They don't throw unnecessary bodies at a matter to gin up the billables.'

Still, plenty of law firms have the same qualities. And with few exceptions, for the past 5 years, a remarkably stable group of firms has monopolized the top 10 spots in each practice area we survey. Six of the top corporate transactions firms this year showed up in 2002, the first year Corporate Counsel did the survey (Skadden; Davis Polk & Wardwell; Mayer, Brown, Rowe & Maw; Simpson Thacher & Bartlett; Jones Day; and Sidley Austin). In litigation, six firms appeared in both the 2006 and 2002 top 10 (Kirkland; Jones Day; O'Melveny & Myers; Mayer, Brown; King & Spalding; and McGuireWoods). What's keeping these firms on top? Size, skill, the strength of the brand name, the effect of convergence (more on this below) and a tendency to reach out to large, expensive firms when there's big, potentially costly legal business at hand.

Bet-the-Company Factor

While chief legal officers like to talk big about keeping a close eye on legal bills, when it comes down to a bet-the-company case, they typically say that they want the massive firepower of a large firm on their side ' no matter what the expense. According to the most recent AmLaw 100 survey, the top 10 litigation firms in the survey average 1186 lawyers, which is significantly larger than the average Am Law 100 firm.

Convergence Factor and Exceptions

Convergence (remember that?) also plays its part in the survey. While many companies have refined their roster of preferred providers in recent years, the big firms on Corporate Counsel's list haven't been among the casualties. Consultant Rees Morrison says he doesn't find this surprising. 'Convergence favors bigger firms,' since they are equipped to handle a wider array of matters, says Morrison, a principal at the Somerset, NJ-based legal consulting firm Hildebrandt International Inc.

But size isn't the whole story. Firms with a thousand-plus lawyers dot today's legal landscape like poppy seeds on a bagel. So what's the edge keeping the top firms on top? Their brand names, says Daniel DiLucchio Jr., a principal in the Newtown Square, PA, headquarters of legal consulting firm Altman Weil Inc. He says cost control, the one major factor that can cause GCs to shop around, just doesn't happen at this level. For example, Manly says that he uses local firms such as Robinson, Bradshaw & Hinson to handle small transactions ' 'they produce comparable work at half the price' ' but there comes a point when 'a transaction becomes so complicated it's worth paying the $800 or $900' an hour for a senior Skadden partner.

Even the poster child for convergence, E.I. du Pont de Nemours & Co., goes outside its network of 42 'primary law firms' for large, complicated M&A transactions, says associate general counsel Roger Arrington. In our survey, for the last 3 years, DuPont has listed both Cravath, Swaine & Moore and Skadden among its top outside counsel for corporate transactions ' but they don't appear on the company's official primary firm list. At DuPont, there's primary, and then there's primary.

Of the four practice areas surveyed, labor and employment shows the most consistency.

One Surprise

One interesting trend: the wholesale disappearance of Washington, DC, firms from the list of most-mentioned litigation firms. In the first surveys of this series, four DC firms ' Howrey; Akin Gump Strauss Hauer & Feld; Covington & Burling; and Williams & Connolly ' appeared in the top 10. Today, not a one. Morrison attributes this to the Bush administration. With the Federal Trade Commission and other agencies gone 'toothless,' he says, there's less regulatory enforcement ' hence, less need for Washington's heavy hitters.

But other than those probably temporary downturns, the big guys stay on top, buoyed by the semper fidelis disposition of corporate counsel. As Verizon's Barr says, 'Why shop around when you're successful with what you've got?'