On The Merits

A new study from Chambers and Partners reveals that the most elite, fastest-growing law firms, such as Kirkland & Ellis and Latham & Watkins, are seeing a compounding of their success — and the window is narrowing for other firms to catch up.

On this episode of On the Merits, Chambers CEO Tim Noble and Chief Product & Innovation Officer Lisa Hart Shepherd discuss this first ever report crunching the millions of data points Chambers has collected over the past decade about the top 100 law firms.

“So, we found that there was a huge disparity in performance,” Shepherd said. “You’ve got firms that are growing well over a hundred percent over the period, and we’ve got a few that are declining and everything in between.”

Shepherd said the top performers excelled in premium practices and offered a distinctive client experience.

READ MORE: Chambers Advantage Index

Firms that were growing quickly but don’t have the scale or reputation of the top firms — firms such as Polsinelli and McGuireWoods — need to find an advantage to compete, Noble said. “Targeting talent” is a possible path for these firms to reach the top tier, he said, but these firms are going to need to make “transformational moves” to catch up.

"Culture" is a popular buzzword for law firm leaders describing in vague terms what sets them apart from their rivals. For Winston Taylor's Steve D'Amore, it's a key part of melding the two firms that combined in June in Big Law's latest transatlantic merger.

"We put culture at the top of the list of things that were important to make sure we had right," D'Amore said on Bloomberg Law’s podcast, On The Merits. That includes blending US and European approaches to consensus building and urgency to attain "urgent collaboration" across the newly minted $1.75 billion firm, he said.

Chicago's Winston & Strawn and UK firm Taylor Wessing hired BDO Global to analyze cultural compatibility before the merger was announced and brought the consultants back to look at pain points after completing the tie-up, D'Amore told Bloomberg Law reporter Roy Strom. Winston Taylor's leaders are also trying to bridge gaps on lawyer pay, client conflicts, practice group structures and AI tools.

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AI is changing the way the legal profession operates and everyone — lawyers, law firms, and especially clients — needs to look past the institution that is the billable hour, according to Baker McKenzie global chair Sunny Mann.

“We all need to collectively move on in our thinking to get alternative fee arrangements working in the right way," he said on Bloomberg Law's On The Merits podcast.

Mann spoke to Bloomberg Law reporter Roy Strom about how his firm is using AI to change its relationship with its clients, the role AI played in its recent layoffs of professional staff, and what it's like for him to lead a global law firm during a time when globalization may be on the wane.

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Sidley Austin LLP crossed $3.74 billion in revenue last year and has its sights set on $4 billion — but according to its top leader, the number is a byproduct, not the goal. The real question is whether the firm is built for what comes next.

Today on On the Merits: Yvette Ostolaza, chair of Sidley's management committee, sits down with Bloomberg Law reporter Meghan Tribe to discuss strategic lateral hiring, formal integration plans, and a willingness to pull back from practices and geographies that aren't growing.

"There are no sacred cows," Ostolaza said. "We need to continue to evaluate how the industry is changing."

She also weighed in on how Sidley is treating AI: not as a pilot project, but as core leadership infrastructure deployed across the firm with dedicated governance, training, and practice-group liaisons.

"It doesn't replace judgment, it sharpens it," Ostolaza said.

When it comes to winning the legal industry talent wars, the best defense is a good offense, according to K&L Gates' global managing partner, Stacy Ackermann.

Her firm is "going out into the market" rather than "being in a reactionary mode of 'Let's see what comes to us and what the headhunters bring to us,'" Ackermann said.

She spoke to Bloomberg Law editor Chris Opfer on our podcast, On The Merits, about how competitive the market for legal talent has gotten, even in secondary markets like her home base of Charlotte, N.C. She also talked about why K&L Gates is continuing to push its attorneys to use AI, even after some of its attorneys got reprimanded last year for using hallucinated citations in a court case.

"I remember not so long ago that clients would say to me 'Please tell me you're not using AI,'" Ackermann said. "And now they're saying to me 'Please tell me you are using AI.'"

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For a long time, the top dozen or so law schools in US News & World Report's annual rankings stayed remarkably consistent, with Yale for example holding the top spot every year since the rankings debuted in 1990. But not this year.

Yale is now no longer at the very top of the highly influential rankings, which were unveiled earlier this week, having slid down to number two. While this may seem insignificant, Bloomberg Law columnist David Lat said even dropping one spot can tangibly affect a law school's brand.

Lat spoke about this with Bloomberg Law editor Jessie Kokrda Kamens for our podcast, On The Merits. He said recent changes in the methodology for compiling these rankings means we should expect more movement in and out of the top spots in years to come. Lat also talks about why the rankings matter for Big Law talent recruitment and beyond.

Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

Law firms bringing in outside investors is one of the hottest topics in the legal industry right now. John Quinn, founder and chairman of Quinn Emanuel Urquhart & Sullivan, says firms that want to take the cash need to figure out how to avoid alienating their younger attorneys.

Non-lawyer investment isn't common yet in the US, but some firms are experimenting with different ownership models—especially as they consider the price tags on AI tools. Bringing in outside investment can help raise capital. It can also dilute the pool of profits that associates and younger partners were hoping they'd one day get to enjoy, Quinn said on our podcast, On The Merits.

"They have to be persuaded that that's in the long-term interest of the firm," he told Bloomberg Law reporter Roy Strom. "But these are some awkward conversations. And it's a generational conversation."

Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

The chair of law firm Polsinelli says he doesn't want his attorneys—and especially not his junior attorneys—to use AI legal tools grudgingly. But the firm will not be giving associates billable-hour credit for learning how to use the technology.

"They need to be very, very good at utilizing these tools and investing in themselves," Chase Simmons said on Bloomberg Law's podcast, On The Merits. "If you need motivation to learn how to use AI in your career right now, we probably have other things that we should be concerned about with you."

"This should just be every day you wake up and have breakfast and think about how to incorporate this into your career," Simmons added.

Simmons, who leads one of the fastest growing firms in the country, talked about how Polsinelli is adopting AI across the firm. He also explained Polsinelli's focus on being a "daily and weekly law firm" for its clients and discussed his views on the Trump administration's attacks on the legal industry.

Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

Outside investors circling law firms may help some shoulder the growing costs of artificial intelligence, according to Mayer Brown's Jon Van Gorp.

"I could see private capital providing specific funding for AI with a use agreement between the firm and the AI vehicle where it's tailored, just like litigation funding," Van Gorp, the firm's chairman, said on Bloomberg Law's On The Merits podcast.

Still, the unique aspects of the legal services business pose challenges for broader outside investment in large firms, Van Gorp said. The "practice of law is still a profession, and lawyers still have their way of doing things," he said.

Van Gorp spoke to Bloomberg Law reporter Roy Strom about AI's "big question that everybody's talking about." He also discussed his firm's focus on servicing energy markets, the turbulent times for private credit markets, and the impact of President Donald Trump's war on the legal industry.

Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.

The Trump administration surprised everyone last week when it first dropped an appeal in its fight against four law firms and then, less than 24 hours later, reversed itself and declared the case to be back on.

The White House and Justice Department have yet to explain what prompted the dizzying two-day stretch. Late last week, a DOJ lawyer instead pressed an appeals court to overturn four separate rulings striking down Trump's executive orders against the firms last year.

The about-face has highlighted questions about the legal rationale behind Trump's orders, targeting firms over ties to lawyers and causes the president sees as threats to his administration. But even if Trump ends up losing the appeal, he's already gained a significant amount of leverage from the legal industry in hard-to-quantify ways, according to Bloomberg Law reporters Meghan Tribe and Justin Henry.

On this episode of our podcast, On The Merits, they speak with host Jessie Kokrda Kamens about the chaotic events of last week and where the president's battles against the legal industry may be heading next.

Do you have feedback on this episode of On The Merits? Give us a call and leave a voicemail at 703-341-3690.