Tuesday, February 12, 2013

Trusts & Estates Downsized

Word has rustled through the lawyer grapevine for several years that a number of large law firms are down-sizing (or eliminating altogether) their trusts and estates practices. 

The explanation is that T&E work does not generate revenue commensurate with other "big firm" specialties, in particular corporate transactions and litigation.


Now comes evidence of the trend in last week's New York Times.

Peter Lattman reports (here) that Debevoise & Plimpton is eliminating its entire T&E department. Previously, Weil, Gotshal and Gibson Dunn did the same.

Here is Lattman's explanation:
There are problems with trusts and estates within a big law firm model. The practice, to use the law firm management parlance, is not as leverageable as other areas. Corporate and litigation partners generate big fees by assigning armies of junior lawyers to megamergers and complex lawsuits. By comparison, trusts and estates work requires far less manpower, which mean far less profit. 
Another issue in sustaining these departments is that individual clients bristle at billable rates that now reach more than $1,000 an hour. While big corporations grudgingly pay those rates, wealthy families often resist them. 
As a result of these dynamics, firms’ trusts and estates practices have remained small and, in many cases, decreased. At the same time, firms have aggressively built up their corporate and litigation practices across the globe. They have also embraced hot, moneymaking practice areas like patent law and white-collar criminal defense. 
Richmond & Fishburne does a great deal of T&E work, and we think it's some of the most satisfying legal work there is. Helping families plan for the future may not be leverageable from a management perspective, but it is absolutely valuable from a people perspective.

Now let's go cheer for Joe Harris and those surprising Wahoos as they take on the Hokies at the JPJ this evening!