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WHAT WE'RE WATCHING

PLAYING FOR KEEPS -  Let's kick this Monday morning off with some good news (assuming you work at an elite law firm, know someone who does or happen to just be a big fan of Big Law): a look at the early reports of Am Law 200 financials shows many law firms posting eye-popping profit per partner hikes of more than 20%, including at Sidley Austin, Dechert, McDermott Will & Emery, Hogan Lovells and Alston & Bird, among others. In fact, many firms' profit gains were higher than their revenue growth. And unlike 2020, the profit surges up and down the Am Law 200 were not uniquely tied to expense cuts.  As Law.com's Andrew Maloney and Patrick Smith report, a confluence of events led to these sky-high profits across the industry last year, including high demand; a practice mix that became more transactional; billing rate increases that were applied in the right areas; a change in leverage; and dips in head count at some firms—all events that firms could try to apply this year to replicate the financial success. "The easiest way to think about it is if you're able to increase revenue without increasing costs, it's going to result in more profit," said Kristin Stark, a legal consultant and principal at Fairfax Associates. "A lot of these firms are raising rates pretty substantially. A lot of clients saw pretty solid rate jumps in 2020, but especially in 2021. And they [firms] were able to increase rates without adding a lot of additional costs."

OVERRATED? - Financial institutions are paying the highest hourly rates for outside counsel, according to a new analysis of the 2021 Real Rate Report from Wolters Kluwer. Part of the reason for that is legal work in the highly regulated financial industry often calls for regulatory and compliance specialists who are in high demand and charge high rates. But the report's author, Nathan Cemenska, director of legal operations and industry insights at Wolters' enterprise legal management solutions, told Law.com's Phillip Bantz that he believes there's another driver: "snobbery." Cemenska said banks tend to hire the largest, highest-priced law firms because of their prestige, geographic reach and intimidation factor—even when the work is relatively commonplace and could be handled at a smaller firm for a lower price. "If you think that a person who didn't go to a top 20 law school can't do quality legal work and you refuse to hire a person or work with a person like that, or you refuse to pay them a rate that they're willing to work for, then you're creating artificial scarcity," Cemenska said. Still, give the poor banks a break: according to the report, they're actually doing a decent job of tamping down big rate hikes from their law firms.

WHO GOT THE WORK?℠ - Churchill Downs Inc., parent company to Kentucky Derby horse racing complex Churchill Downs, has agreed to acquire considerably all of gaming operator Peninsula Pacific Entertainment's assets for approximately $2.5 billion. The transaction, announced Feb. 22, is expected to close by the end of 2022. Louisville, Kentucky-based Churchill Downs is advised by a Sidley Austin team including partners Brian Fahrney and Brent Steele. Peninsula Pacific, which is based in Richmond, Virginia, is represented by a Latham & Watkins team led by partners Trina Chandler, Brett Rosenblatt and Caroline Phillips.  >> Read the press release on Law.com Radar and check out the most recent edition of Law.com's Who Got the Work?℠ column to find out which law firms and lawyers are being brought in to handle key cases and close major deals for their clients.

DIRTY DOLLAR - Discount store operator Dollar Tree and subsidiary Family Dollar Services were slapped with a class action Friday in Virginia Eastern District Court on behalf of consumers who claim to have purchased products stored in a contaminated distribution center in West Memphis, Arkansas. The suit follows an FDA warning related to products purchased from Family Dollar stores in six states since Jan. 2021. The putative class is represented by Wise Law Firm; Mason Lietz & Klinger and Wampler, Carrol, Wilson & Sanderson. Counsel have not yet appeared for the defendants. The case is 1:22-cv-00208, Smith et al v. Family Dollar Services, LLC et al. Stay up on the latest deals and litigation with the new Law.com Radar.  

EDITOR'S PICKS

WHILE YOU WERE SLEEPING

'STOP THE RUSSIAN MONSTER!' - Having endured day one of the incursion of Russian troops into the city, Kyiv's legal community on Friday began urging the international legal industry to make itself heard as safety concerns grow, Law.com International's Krishnan Nair reports. While many lawyers have said that they are safe for the time being, several are setting out measures to protect staff and client data while calling upon the rest of the world to assist.  Arzinger, one of Ukraine's elite firms with 80 lawyers in Ukraine, said in a post on LinkedIn: "We are safe and sound and have successfully sustained the first day of the most recent Russian invasion, which started yesterday early in the morning." But the firm's founder and managing partner, Timur Bondaryev, added in a statement to Law.com International: "But we don't know how the situation will develop on the ground and cannot exclude some communication interruptions should infrastructure fail. We ask for your understanding, that for obvious reasons our priorities have shifted at the moment and responses on business matters may take some time." He also reminded that the invasion "is not only about our country but about world security" and that "while Ukraine is doing its best to be the strong shield on European grounds we expect other countries to finally wake up and face the reality to stop the Russian monster!"

WHAT YOU SAID

"My biggest challenge was accepting that my career would not follow a linear, well-lit, directionally signed path to bring me where I am today."