Law Firms Are Drowning In Cash. Trump's PAC Is Drowning In Legal Bills.

0:11Welcome to another edition of Thinking Like a Lawyer. I'm Joe Patrice from Above the Law. I'm joined by others of the Above the Law team. I've got Catherine Rubino here. Hey. And Chris Williams. Merry Christmas. Yeah. And we are here to talk about the big stories from the week that was in legal. But we begin, as we always do, with a little bit of small talk. Yeah. Yeah. So spring sprung and then sprung back. Yeah, we can talk about the weather if you would really like. It is very cold. That was more seasonal than weather, but yeah. Well, I mean, you know, those are not unrelated phenomena. I guess they are related phenomena.

0:52Yeah. But I'm not sure what else is going on in the world. You know, I'm surprised. We had a little talk about this before the show that Joe opted to talk about the weather instead of talking about eating ass. Well, there you go. Well, yes, and that is what we were talking about. we were talking about specifically donkey meat was how. Yeah. Okay. I've been watching a lot of Winnie the Pooh with my toddler. So Eeyore is top of mind, but I'm not sure donkey meat is. Oh, we were just, just chatting about chatting about libertarianism. It's how great it is in practice. Yeah. So beef. Well, this has come up because I was talking about how beef is reached an all time high.

1:34Going through the roof. Yeah. It is. Yeah. Yeah, nice reference. I think it's meat in the Mr. Show, but yeah. But yeah, no, so it's reached an all-time high and that led Chris to bring up the donkey meat point, which is, for anyone who's not following Argentina, they're now eating donkey meat there. So not safe to be Eeyore, another thing for him to be depressed about. It's a how it started, how it's going about libertarian government policies. Yeah, and it's funny because whenever you bring up, like, and this might be more of a debate thing, but I'm sure it happens in the real world if the real world exists.

2:09Shout out to Boutry Art. But it's like, if somebody's like, hey, capitalism is bad, and they're like, well, what about all these other places whenever they try something different? It's just good to see the try something different stories from the left. I remember the story of the town that tried libertarianism and then the bears came because nobody was taking out the trash and now they're eating donkey meat in Argentina. It's like, oh, if only there was something other than, you know, hyper capitalism to save us. But yeah, well, what was the big big box company that like went out of? Well, basically went out of business because of it was it.

2:44It's either Sears or JCPenney. I can't remember, but they brought in an Ayn Rand acolyte who is like restructured the whole business to work that way. And it promptly ran itself out of business. Also, Ayn Rand, big benefactor of welfare. Yeah, that's true. Yeah. Well, so the donkey meat situation, the way that it ties a little bit into legal is there's a big ALM on Litigation Daily has a big article by Bob Jiffra from Sullivan Cromwell. You might remember him as the person who negotiated all of the law firms. At least the initial ones. the initial ones of surrendering to Trump. He wrote a big piece about how the Second Circuit got it right when they wouldn't allow a lawsuit to recover.

3:34Investors who'd invested in Argentina wanted their money back from, you know, defaulting, bad financial dealings, whatever. And they, Solomon Cromwell, successfully helped the Argentine government not have to pay that money. and in Jeff's article, he talks about like, you know, it would have threatened Argentina's ongoing recovery. And I was like, the ongoing recovery that is now donkey meat apparently. So, you know, it's a form of recovery. It does speak a little bit, though, to the bubble that that exists for some folks, because like Argentina, I think, comes up a lot like it came up a lot during the Doge conversations like these, the Musks and the Trumps and the Jeffra being part of that kind of universe, all talk about how great Argentina's doing.

4:21And then you hear from people who actually are on the ground and turning to Mule that it's not going all that great. Isn't Mule technically horse plus donkey? It is. Yeah, it's across. It's slightly different. Yeah. And then what's the other way? It's a Jenny is the other way, right? Yeah, I think so. I was going to say, and it kind of reminds me of home because I'll see the reports that are like, oh, Americans are struggling to afford increasing cost of living. And then, you know, Trump cabinet face B is like, oh, they might say that, but they're really feeling like they're doing better than ever.

4:59It's like, eh. Yeah. I don't think anybody's feeling like 2026 is, you know, eight plus. Yeah. Like, I mean, I don't. Certainly if they buy gasoline at any point. It's going real bad. But that's the fun thing about appealing to a silent majority. You can say they feel whatever you want them to feel in the moment. Because they're silent by definition. If we never ask them how they feel, they must agree with you. All right. Well, let's close off there and start talking about topics of the week. The first topic, which is a couple of stories just kind of like all rolled together from big stories of last week.

5:36We had the ALM numbers come out. We now have – we also had the vault rankings before that. We're kind of like really in the heat of ranking law firms by money. And we had the super rich ranking came out last week, which is an ALM ranking where they take revenue per lawyer and profits per lawyer, and they create a list of like which law firms are super rich. They changed their definition this year because so many were meeting their old ones. Sure. So they have to, his super has to change. But, you know, so we've got among the super rich, Wachtell leading the pack. I think that's driven largely by the partner numbers.

6:20And I mean, they make a lot of money, but, you know, we all see how Kirkland and Ellis is making way more money than everybody, you know, nominally, but they obviously have more people. So the per lawyer part is doing a lot of work there. But Wachtell, Seussman, Davis, Poe, Kirkland, Robeson Gray, that's your list. Not a super surprising list. The per lawyer piece, I think, is particularly interesting, right? Because the one and two on the list are significantly smaller. They are under 300 lawyers, both of those firms. And that is, you know, that is teeny tiny. That is less than a high school graduating class kind of tiny.

7:02and you know I think that that's really interesting especially when you're considering something like you know Kirkland which is makes the most money right they take in the largest amount of money I think they were what 11 billion this year or 10 over 10 and a half billion something like that oh at that rate like yeah who cares who's counting who cares and you know they are significantly ahead of everybody when it comes to overall revenue numbers. But a lot of that is because they got more bodies doing the things. Yeah. Question about the bodies doing the things. I know that law schools get accused of doing this to manipulate U.S.

7:39news war rankings where they try to game the system. Do boy golf firms ever do layoffs right before information cutoffs so they have the same amount of profits but less heads to where they're like, oh, we have more profits per a lawyer, but they don't taste because they lay people off. That's an interesting point, whether they like they time layoffs to come out ahead on this. I don't believe that we've ever heard accusations of that. And part of that is that these numbers are, you know, a little janky. I remember there was a fight several years ago that was kind of public where a friend of the friend of the publication, Bruce McEwen, was making the point that like these rankings are all kind of nonsense because they're all self-reported, right?

8:22Like because law firms are not publicly treated entities, they're just kind of telling us what their numbers are. We don't really have any confirmable way of doing it other than what they say. And so because of that, it is a little janky. And these per lawyer numbers I think are interesting. But really I think the rankings that tend to get the most play tend to be the most procedures, the ones people care about the most are the overall revenue number. even though we kind of know that, you know, Wachtell is not going to be number one, but really they are doing just fine. And the per equity partner number, which those are the people who are making those decisions about who gets laid off.

9:03And so they're not going to necessarily cut their own ranks to jury Raga ranking. But this actually does lead to a transition here internally to the story about law firm economics. Sure. Speaking of Wachtell and Kirkland, we had an issue where Kirkland needed a new lead for their kind of distressed debt practice. And they got one. They went and got one. And they got one by taking someone from Wachtell. Yeah, which is kind of a weird story in the sense that not many people leave Wachtell because they are super profitable. You know, tiny or firm, you know, as these things go, as we just talked about, but wildly successful.

9:42But, you know, you can do that when you promise, when you guarantee the person that you're taking away$80 million. $80 million. Yeah. That is right. It is guaranteed$80 million three-year package. $80 million over three years. Now, it sounds like, and now if you just tuned into this show in the middle, you might assume you're listening to an NFL show. We're talking about free agency, but that is not the case. Joshua Feltman just joined Kirkland and Ellis from Wachtell based on that$80 million deal or package that we're talking about. But Kirkland needed somebody, right? Because they had recently lost their own head of that group to Simpson Thatcher.

10:23So and especially this is part of the story, I think, as well, which is that in 2026, you're going to need somebody who does some distressed debt work in this economy. You're going to need that. Well, what I was thinking of when I saw it was I think it was Chris who covered this story back in the day. There was a I think it originally was maybe The Times or somebody was talking about basket. Like it's getting to the point where some of these lawyers are making basketball player salaries. Right. Yeah. Yeah. Yeah. My thing is, you know, you know, that that cliche about delegation, like if you find a person that can do the job 80 percent as well, you delegate the task.

11:00They're paying this guy 80 million over three years, like twenty six point seven over a year for like three years. They couldn't find a guy who's like the second or third best and give him like 60. Like, why? Why? I don't know if he's the best. It's because of their book of business. Right. It's who they bring in. It's the clients that they're going to bring, the rest of the team potentially that they're bringing in. And I think it's also really important to note that it's not just the three firms that we've already mentioned, Wachtell, Kirkland and Simpson Thatcher that have done this. Bloomberg tracked, I think, nine partner moves over the last year in the in the distressed debt kind of restructuring space, because I think everyone knows we're on we're standing on the edge of some real bad economic shit.

11:49And if you want to be counter cyclical, if you want to have your law firm be profitable, even when the economy is in the shitter, you're going to need some of this counter cyclical work. That's why I think you're seeing these over-the-top numbers in this space in particular, and you're seeing so many lateral moves as anybody who has a decent book in this space is looking to secure themselves the best guaranteed money before the economy takes a real fall. Yeah. Yeah. It seems like building data centers and preparing for bankruptcy are the two potentially related practice areas that everybody feels they need to stockpile legal talent in right now.

12:30So but anyway, that's that's what's going on. But I mean, it underscores the super rich argument, right? Like these are the firms in the super rich and they're now starting to toss around 80 million dollar guaranteed sorts of figures, which is wild. But it is signed of where we are. Let's take a break here and we'll be back in a second.

12:58You like legal podcasts because you're curious and want to be the best attorney you can be. I'm Dave Scriven-Young, host of Litigation Radio, produced by ABA's Litigation Section with Legal Talk Network. Searching your favorite podcast player for Litigation Radio to join me and my guests as we examine hot topics in litigation and topics that will help you to develop your litigation skills and build your practice. I hope you'll check out Litigation Radio and join the ABA litigation section for access to all of the resources, relationships, and referrals you need to thrive as a litigator.

13:32All right. Well, speaking of billing, there's another way that you can be a practicing lawyer, and that is to bill and then not get paid. It is a less successful way, arguably, to be a lawyer, But that is a that is a path that some law firms go down and mostly law firms who decide to represent Donald Trump when you do that. So we learned that the PAC that he has currently been using to pay his personal lawyers is because they have to file the FEC filings because they are a political action committee. They are half a million dollars in the red row row. Oh, while they still owe somewhere in the neighborhood of one point six million to a bunch of lawyers.

14:22Yeah, that's not the color numbers are supposed to be. No, they should not be read. And the lawyers like. Yeah. But also like buyer beware on the part of the lawyers. Yeah. But that's a thing. So like this necklace is owed something like six hundred and sixty grand for the Stormy Daniels case that she worked on. Another firm involved in that case is owed one hundred and twelve grand. Sullivan Cromwell, we've already kind of mentioned in passing. They're owed around four hundred grand. But yeah, I think you're right that this isn't like a surprise. I mean, dating back for years, we know that this is a like the 80s.

14:58He's been stiffing lawyers. Yeah, we've I heard a story. I heard an off the record story, but so I can't say who it was. But somebody told me that as a lawyer in the 80s, they won a case for Trump. He came into the party where they were all celebrating the case to tell them he's never going to pay them. And like that's just the thing that kind of happens. Ultimately, he paid some amount of it, but they had to negotiate down. And like this is kind of how he operates and has for years. There's tons of lawsuits against him for failure to pay contractors that he's hired. And this is just another part of it.

15:35Now, that's and like you say, buyer beware. Like, yeah, when you take on, you've got to know this is your client. Like, do you look at the bare amount of due deal? And it's not even like these people know. Of course, they know. Of course, they've heard the stories. Of course, they think that either they'll be different and it's OK. or they think that the notoriety that they're going to get from representing the president and the sort of cult following that he has will translate into other work that long term will be to their benefit. Well, then there's one other option, which is the option that several of these folks have managed to capitalize on, which is the in-kind payment.

16:10Sullivan Cromwell obviously owed a lot of money, but, you know, Sullivan Cromwell people get appointed to the Second Circuit and stuff. Yeah. Personal lawyers like Emil Boe was a personal lawyer. He got to work to the Justice Department just long enough to have them engage in what to everybody except Trump judges on the D.C. Circuit looks like criminal contempt. And then he jumped from that into the Third Circuit. Like a lot of these folks, other another personal lawyer of Trump's is now up in the eighth. This is this is what happened. Todd Blanche runs the Justice Department at this point. So you can get paid so long as you want to get paid in government work.

16:49And if you're a veteran, very highly acclaimed criminal defense lawyer like Susan Necklace, you are and are not interested in working for this regime. You're probably going to get stiffed on the back end. Yeah. Quick story tidbit. I don't know if law professors are still teaching caveat emptor. So, and again, this wouldn't be relevant because these are people that I've already been through law school and should have experience. But as I was, I was at WashU, had my contract professor. His name was Greenfield. It's been teaching since it feels like the school was opened. but there was one point we were in contract and i mentioned it wasn't in the reading but i would just like in my mind it was like buyer beware but i was like so like i raised a hand in class because surprise surprise i so i spoke in class and i was like what about caveat emptor and he looked at me as if i said well you know i'm all for the second amendment um and he looked at me like i struck god in the face he was like what did you just say and i'm like you've been taking in contact for decades you know what i said i didn't say that i felt it in my soul and he basically looked at me he was like we don't talk about that here so i don't know what the new what the what the what the youngins are learning now but it may not be uh buyer beware no like it it it is a bad time to try to uh represent the uh you know donald trump uh and by bad time i mean all times have been bad for that for years it's true that some law firms that have worked with him do not appear on this list as being owed money.

18:23So some people managed to come out of it. But also those people include folks who work in the administration. I mean, Habba's firm, like Harvey Dillon's firm, like they seem to be doing better than others as far as what they were owed for their time. Yeah. So it's very interesting. Very sad. I framed my story around the arrested development meme where - There's always money in the banana stand? No, where they talk, where Tobias and Lindsey talk about having an open marriage to deal with their marital friction. And Tobias is like, she's like, oh, Lindsey's like, does that work for those people?

19:04And he's like, no, no, no, it never does. They delude themselves into thinking it will, but it always fails. But it might work for us. And that is basically every lawyer who takes on a Trump representation expecting to get paid. Yes. Tobias Funke is the only anal rapist I'm happy to see people vote. An all rapist. An all rapist. I'm half analyst, half therapist. It's an all rapist. Yeah. That's what's going on. If you don't want to get paid, by all means, feel free to represent the administration. I think, is there anything else on this? I think we should come back after the break to do our final story.

19:45Ooh, that's a good idea. Yay. So our final talk, I figure let's just kind of talk about the Supreme Court. There's a few things going on there. Yeah. So Senate Majority Leader John Thune had some interesting comments about the court, namely that the Senate would be prepared to confirm any new nominee for the Supreme Court. Now, there's no vacancies on the court at the moment. Correct. Let's be very clear. Speculation has been speculating that Sam Alito is on his way out the door. Right. So, yeah, let's step back and talk about that first. Then we'll talk about this. So, Alito, obviously Thomas also could potentially retire, but there's no real buzz around that right now.

20:31Yeah, and people seem to, the speculation on Thomas is that he's going to, wanting to stay until he sets all the records for length on the court. At this point, why not? Whereas Alito, the argument is that he is a not really a judge as much as a Republican politician at this juncture. He understands how to read the polls, understands that the midterms are going to not look great and that he might choose to leave his position to allow the Senate to ramrod a replacement. Now, remember, when Scalia died, we were told that being within a year and a half of an election means you can't do that. But apparently that rule no longer exists.

21:12Well, I mean, they obviously quickly broke that rule when Ruth Bader Ginsburg passed away. But again, to the Alito point, his wife, Martha Ann, has been fairly vocal that she can't wait for him to leave the public life. So there's that kind of element to it as well. And then there's his book. Right. And so this brings this that gets to the what I was going to say was there are two camps on this one by our old host of this show. Ellie Vestal points to the fact that Alito now has a book that's going to drop right before the October term begins. He argues that that might be a sign that Alito is certainly not expecting to be sitting in oral argument when he should be out on a book tour.

21:54The flip side, our colleague from above the law, former colleague from above the law, David Latt, argues that he's probably not going to do that. There are some reasons why we have now, I guess it's CBS reporting that they have heard from their sources that Alito's hired his full complement of clerks and does not expect for next term and doesn't expect to retire. Now, that seems to suggest somebody's not going to retire. That said, Kennedy had hired clerks, too. So and then turned around. But who knows? So there's a chance that he may retire, but probably not now. You said that the Senate is talking about replacements.

22:34Did they give any indication of who they would want in that seat? They didn't give any indication just that whoever be nominated, they were going to immediately kind of ram through the process. But there is speculation out there about who a potential nominee would be, something that even Donald Trump has mentioned. And that is a potential Supreme Court Justice Ted Cruz. Oh, get a Canadian on the court. Well, I think the biggest the biggest issue is based off of his time is a time in Texas is that as soon as a major case hits the court, he's going to fly out. Yeah, because whenever there's crisis, he's on airlines.

23:10Can you hear oral arguments from Cancun? Because, yeah. So Cruz and I've also heard Mike Lee, I think both of them have been discussed. They both obviously have experience with the Supreme Court, but it's more that I think that nobody really likes them in the Senate and would love to get rid of them. Well, that is what Trump actually said about potentially nominating Cruz is that he would get unanimous support in the Senate because, quote, they want to get him out of there. Yeah. And I mean, it's not it's it's smarter on another level, too, because like we're now looking at what's going on in the Texas Senate race for the seat that is not Cruz's.

23:52And if you've monitored this for any length of time, the Republicans dominate that seat historically winning by large margins. And Ted Cruz's seat is always a bit of a nail biter because even in Texas, people don't really like him. That said, now we're looking at that supposedly safe seat is in real danger. I think they probably hold on to it, but the numbers do not look great. It looks like a real nail-biter for that seat, which would suggest that Cruz is very vulnerable going forward. So lock him up and try to get a more friendly and likable candidate. Yeah, and do it while Republicans still have 53 seats so they don't need his vote to get the nominee through.

24:37Yeah, that would seem. And I also think that the lesson of the last few weeks, whether or not it's justified amongst Republicans, they they have taken the stance that they don't. And Trump has fanned these flames that Gorsuch and Barrett are not to be trusted. I don't think that's necessarily a fair assessment on Republicans parts. I think they're very reliable votes for them. But, you know, they didn't they didn't believe in this tariff case. So therefore, they are not to be trusted. And I think it has sowed a lot of cynicism and distrust among Trump folks for the idea of filling that seat with an actual judge who knows what they're doing.

25:19I think they want to pick somebody who is a actual politician in robes. Right. Very clearly because they feel betrayed by the ones who have been, you know, jurists. Who are trying to be judges. Even tangentially trying to be judges, I guess. I don't want to give them a ton of credit. That is fair. But anyone even trying. And so they there, I think, given that that's the state of play right now. And we also see this with Trump's increasing attacks on Leonard Leo occasionally where he calls him a sleazebag and all like it seems like the and Leo, of course, was the controller of the pipeline of actual legally educated people into judgeships.

26:00so it would lean towards it being somebody more political now would it be Cruz or would Trump elect to do something like try to get Bove moved up because Bove just got confirmed so he knows he can get through that probably with the same voters that would be another person that would be a loyal hack that he could put up there and who is young far younger than you would think if you actually looked at a picture of him. Because his picture looks like he's like, like Roy Cohn has been thought out. But as it turns out, he's actually reasonably young. He's a very rough 32. I don't, he's not 32, but he is not.

26:42Yeah, he is, he's like, he's what, 45. But yeah, he's one of those folks that when you, when you look at, you ever look at old pictures from like the 60s and 70s and they're like, These people are all 40 and they all look like they're on their deathbed. Yeah. People just aged badly. Well, before we knew what skincare was. I will say the only position of authority I think Ted Cruz should be in is Walmart greeter. But if he does make the court, it is going to be hilarious. Because whenever there's a historical moment, there's a nod to it. Like, oh, Justice Jackson was the first public defender on the court.

27:22If Ted Cruz, shame be upon him, is sits on the court, he'll be like the first the first mass murderer. Remember when everybody thought he was a Zodiac killer? Oh, because he was a Zodiac killer. Yeah, we could finally get that case fully closed if we're on there. And also like I don't know why, but it seems like there's a there's a tendency for judges to be clean shaven when they're on the court. But his face is so punchable. He has to keep that beard. That's a good question. who's the last Supreme Court justice with a beard, do we think? Yeah. It's a less Canadian. Well, right. Which he disputes, but I mean.