The number of attorneys employed full time by the largest private law offices in New York continues to decline, a trend that began with the 2008 financial crisis, according to data gathered for the New York Law Journal’s annual NYLJ 100 survey. Hiring is up, however, among regional and out-of-state firms.
This year’s NYLJ 100 ranks law firms by their total number of full-time equivalent lawyers in all of a firm’s New York state offices in 2013.
Among these 100 law offices, 53 saw a net loss of New York attorneys from 2012 to 2013; two saw no change and 43 had a net gain. (Year-to-year changes in two firms’ head count could not be calculated due to mergers.)
Collectively, the largest offices employed about 21,031 attorneys in 2013, about 229 fewer than 2012. Ten firms in the rankings saw their New York head count drop more than 10 percent last year, while only three had gains of more than 10 percent, according to numbers collected by the National Law Journal, a Law Journal affiliate. The Law Journal relies on National’s figures for its own survey of law firms.
The losses were at all levels, including equity partnership and associates.
Most of the growth among firms headquartered in New York has taken place in other offices to accommodate the rising number of cross-border capital markets and M&A deals that are handled in other countries, said Dan DiPietro, chairman of Citi Private Bank’s law firm group.
Also, annual incoming associate classes since 2008 at large firms have been considerably smaller, bringing down the total number of lawyers employed, he said.
Among the firms showing lower head counts in 2013 were Epstein Becker & Green, dropping 18 percent to 88 attorneys; King & Spalding, lowering about 17 percent to 92 attorneys; Linklaters, decreasing by about 16 percent to 112 attorneys, and Allen & Overy, shrinking 13 percent to 138 attorneys, according to survey results.
Several of those firms, however, disputed those figures and maintained that the drop in head count was lower, or due to the firm’s method of organizing its attorneys.
Carmine Iannaccone, managing director of Epstein Becker, said the firm’s head count last year was about 99, including a few who split their time between New Jersey and New York. Iannaccone said any slight head count decline in 2013 was due to a real estate group leaving the firm, as Epstein Becker focuses more on health care and life sciences, labor and employment and commercial litigation.
Iannaccone said the firm is seeing top-quality talent defect from larger firms, especially in labor and employment practices, due to push back from billing rate hikes, which provides his firm with the opportunity to “continue to add good people.”
King & Spalding spokesman Les Zuke said the firm’s full time equivalent head count last year was 104, leading to only a seven-person decline in New York. He also pointed out that the firm does not count full-time equivalent attorneys in each office but rather organizes its attorneys according to practice groups. This year, the firm brought on several prominent partners, including a white-collar defense group from Fried, Frank, Harris, Shriver & Jacobson.
A Linklaters spokeswoman said the 22-attorney net loss was partly due to attorneys relocating to other offices. “Our New York head count slightly decreased by about 10 people between 2012 and 2013 as we shifted our practice mix to reflect changing demand in the marketplace and as a result of several of our lawyers moving to our newly opened D.C. office and our Sao Paulo office in Brazil,” the spokeswoman said.
An Allen & Overy spokesman confirmed the survey figures for New York. After the firm conducted a U.S. practice review, including a change in U.S. office leadership, some partners and associates left the firm, while the firm also experienced natural attrition, the spokesman said.
After years of head count gains in New York, the survey results show Quinn Emanuel Urquhart & Sullivan dropping by about 12 percent to 246 attorneys. But Quinn Emanuel said in a statement that it recently stopped counting full-time contract attorneys, whose numbers can fluctuate significantly depending on case demands. The firms submitted revised full-time equivalent figures to the Law Journal that reflected a 27-attorney rise, but an overall full time head count of 224 for last year.
While many firms saw declines, several out-of-state firms took the lead in building up their New York offices. The firms include O’Melveny & Myers, which shot up by about 16 percent to 114 attorneys; Hunton & Williams, growing by 12 percent to 96 lawyers; Seyfarth & Shaw, rising by about 12 percent to 116 attorneys; Goldberg Segalla, surging by 10 percent to 133 attorneys; and Reed Smith by 9 percent to 159 attorneys.
O’Melveny, founded in Los Angeles, rebounded in Manhattan after a head count drop in 2011. Among its prominent hires last year were John Rapisardi and George Davis, former Cadwalader, Wickersham & Taft partners, joining with three associates and counsel; and Stuart Sarnoff, joining from investment firm Avenue Capital.
“We’ve been blessed lately to have grown some very strong institutional relationships, including financial service companies, which tend to have a lot more of their work in New York,” said Bradley Butwin, O’Melveny’s chair.
Edward Estrada, who leads the New York office of Pittsburgh-founded Reed Smith, echoed Butwin’s comments about his own firm. “As a lot of our clients are limiting the number of outside firms they’re working with, we’re finding ourselves part of a smaller number of firms” on the clients lists, Estrada said.
Lorie Almon and John Napoli, co-managing partners of Seyfarth Shaw’s New York office, said activity in transactional and real estate work, including finance, acquisitions and development, has led to a need to bulk up those departments. “Real estate has really heated up,” Napoli said. Seyfarth has roots in Chicago.
Lisa Sotto, who leads the New York office of Hunton, which was founded in Virginia, said the firm hired many associates last year, driven by activity in real estate, capital finance and structured finance work.
At Buffalo-based Goldberg Segalla, most of the growth was in the firm’s Manhattan office, which opened in 2012. Richard Cohen, the firm’s managing partner, said, “We have been growing more in Manhattan than we had anticipated,” largely due to client demands in business litigation, product liability, insurance regulatory and professional liability work.
Paul, Weiss, Rifkind, Wharton & Garrison is now No. 1 in the NYLJ 100 rankings. Its New York office head count rose by 6.2 percent to 716 attorneys from 2012 to 2013, overtaking the longtime lead of Skadden, Arps, Slate, Meagher & Flom.
Paul Weiss is one of the few New York-based firms showing a head count increase above 6 percent in its New York office. Much of the gain was in the associate ranks, according to survey results.
Brad Karp, the firm’s chairman, said in an email that head count has increased to accommodate client demand, especially in litigation, regulatory defense and transactional areas.
According to survey figures, Skadden, now ranked No. 2, has gradually reduced its New York ranks, including a nearly 7 percent decrease to 629 last year. Among the Skadden departures was a group of about 15 lawyers, including partners Sheila Birnbaum and Mark Cheffo, joining Quinn Emanuel last year. A Skadden spokeswoman declined to comment.
Among other changes, three firms in the rankings are the result of mergers last year: global Swiss verein firms Dentons and Norton Rose Fulbright.
The third merged firm, Woods Oviatt Gilman with 86 attorneys, is new to the NYLJ 100, after two Rochester firms combined. Long Island-based Farrell Fritz, with 86 attorneys in four offices, is also new to the rankings.
Meanwhile, K&L Gates and Martin Clearwater & Bell fell out of the NYLJ 100 rankings this year.
Some government offices saw gains in attorney head count, including the New York City Law Department, which reported an 11 percent rise to 756 lawyers by the end of last year. Law Department spokesman Nicholas Paolucci said the department has increased hiring for new initiatives to address e-discovery issues, cases brought against the police in federal court and a rising number of tort cases brought against the police in the Bronx.
In New York City, almost all district attorney offices stayed steady or rose in head count last year, according to a survey by the NYLJ. Head count rose by about 7 percent to 422 in the Bronx; by about 6 percent to 549 in Manhattan; and the head count in the Queens D.A.’s office rose by 8 percent to 303.
In Brooklyn, the D.A.’s office remained around 511, while the number of Staten Island prosecutors dropped by two to 46 last year.
The number of female prosecutors in D.A. offices rose by about 3 percent, but those additions were made largely in New York City. Women made up more than half of the number of assistant district attorneys in New York City, except in Staten Island, where male and female attorneys were evenly divided.
D.A. offices in the Bronx, Manhattan, Brooklyn and Queens all reported increases in the number of minority attorneys, while Staten Island reported two fewer minorities. But across the state, 44 D.A. offices, about the same number as 2012, reported no minority attorneys.
Three of the four U.S. Attorney offices in New York saw losses in their head count by December 2013, especially in the Northern District, falling by 20 percent to 36 lawyers. The number of prosecutors dropped by 5 percent to 216 in the Southern District and by 5 percent in the Western District to 52. The Eastern District held steady, with around 158 prosecutors.
The New York Attorney General’s office reported a slight decline of attorney ranks to 642.