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With 2003 nearing conclusion, venerable law firm consultant Robert Denney has released his 15th annual year-end report, “What’s Hot and What’s Not in the Legal Profession.” The report cites bankruptcy, litigation and mutual fund investigations as the three red-hot practice areas, while associate attrition and compensation are down, summer associate programs have been reduced in size, profits per equity partner have increased and the trend toward multitier partnerships continues to grow. Denney, of Wayne, Pa.-based Robert Denney & Associates, said that bankruptcy was “still as hot as the Sahara in July” and that litigation concerning securities, construction, intellectual property and products liability is especially busy. Denney said that products liability filings had more than doubled in the last four years, with leading claims being asbestos, pharmaceuticals and health care. The mutual fund investigation begun by New York Attorney General Eliot Spitzer after Labor Day and picked up by the U.S. Securities and Exchange Commission has kept both 40 Act and white-collar defense lawyers extremely busy. Denney said white-collar lawyers had already been busy with the continuation of the post-Enron fallout. He cited Pepper Hamilton and litigation boutique Vaira & Riley as firms that are extremely busy. “Enron and Sarbanes-Oxley brought attention to it, but they were not the only causes,” Vaira & Riley’s Peter Vaira said. “It’s something that had to come. Businesses go through cycles, and this is just one of them.” Other hot practice areas cited by Denney include corporate governance, employment, public finance, intellectual property, real estate, immigration, education, land use and contingency fee litigation. Denney said IPOs and transactional work for privately held companies are getting hot, while mediation and alternative dispute resolution and mergers and acquisitions are up and down. “I think IPOs are heating up real slowly,” Wolf Block Schorr & Solis-Cohen chairman Mark Alderman said. “But you have to remember that they’ve been in the ice age for the past few years. It’s still a long way from the late ’90s.” In employment trends, Denney said that lateral partner hires are still “red hot” but that interest in lateral associates had cooled. Several managing partners agreed with that assessment and said it probably is due to the still slow economy creating a lack of need for depth in many of the transactional practice areas. “We’ve added partners and associates,” Duane Morris chairman Sheldon Bonovitz said. “But it’s much less efficient getting associates than partners.” In associate compensation, Denney said few firms are increasing starting salaries, many have reduced year-end bonuses and some have even been eliminated for all but the top performers. Summer associate hiring is also down, Denney said, and some firms have eliminated the programs altogether. Philadelphia firm managing partners said that while they agree that lateral associate hiring is generally down, they claim associate bonuses either are the same or are enhanced this year. And they said summer hiring might actually increase slightly or stay the same after reviewing their notes from the recently completed hiring season. Denney said that profits per equity partner had increased by 5 to 10 percent in most firms, regardless of size. He said the reasons are cost-cutting, paying more attention to collecting receivables and, in some cases, having fewer slices of the partnership pie. The reason for the smaller number of equity partners is that the number of non-equity partners is increasing faster than the number of equity partners. “A number of firms have even trimmed their equity partnership ranks so that there are fewer partners to dine on the profit pie,” Denney said. Another trend Denney cites is the continued proliferation of ancillary businesses. He said one of the more intriguing ones is PlayMaker, a subsidiary of Pepper Hamilton that aims at offering a wide array of business services to professional sports teams. Several other local firms have opened or expanded their government relations ancillary businesses. Copies of the report may be obtained by e-mailing Robert Denney & Associates at [email protected] .

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