Nearly a year after an Australian law firm went public, many in the legal profession are still tittering over whether any American players would follow suit.
By necessity, law firms are fairly tight-lipped about much of the work they do. That would have to change if any were to become a publicly traded company, what with the disclosure requirements and the probing questions of shareholders.
In the midst of earnings season, Above the Law’s David Lat pens a mostly tongue-in-cheek piece for The New York Observer speculating on what a quarterly earnings report by an American firm would look like. (A hint: It wouldn’t say much.)
Mr. Lat, a former corporate lawyer himself, gently jabs the pampered-partners culture of Big Law, which may take a hit as corporate profits slide. Niceties like $160,000 starting salaries for first-year associates, 18 weeks of paid parental leave and Friday Swedish massages, he imagines, would go out the window.
And how would the firm describe secrecy-shrouded practices like mergers and acquisitions work or criminal defense? Perhaps thusly:
The M&A department spent a significant amount of time on several potential transactions for a client in the energy sector that were never consummated. Unfortunately, the firm was unable to bill for most of this time …
The firm cannot provide additional details about this representation, due to client confidentiality rules.
As a point of comparison, consider the semiannual disclosures of Slater & Gordon, the personal injuries firm that now resides on the Australian stock exchange. Its recent annual report (PDF) resembles virtually any other public firm’s, with general income statements and descriptions of its business.
Which is not to say that public law firms would ever fully open their kimonos, much as representatives of another industry tend to play their cards close to the vest. Alternative asset managers — including private equity firm Blackstone Group, buyout- and hedge-fund manager Fortress Investment Group and hedge fund Och-Ziff Capital Management — have been criticized by some analysts and investors as presenting opaque looks into their businesses.