Orrick Herrington & Sutcliffe LLP

Published June 2011

2011 Vault Ranking: 39

Overview

Once merely a strong regional firm in California, Orrick, Herrington & Sutcliffe has since molded itself into an impressive global firm. Though it has a strong intellectual property department, the firm is well rounded, featuring a strong litigation group in addition to being known for its finance work.

The oldest privately held company in San Francisco is Levi Strauss & Co. The second oldest is Orrick. The firm can trace its roots to attorney John R. Jarboe in 1863, though the eponymous William Horsley Orrick did not join the firm until 1910. By the early twentieth century, Orrick was already a serious player in the San Francisco legal market, where it played a major role in obtaining the financing for the Golden Gate Bridge, and defended the validity of the bonds when challenged by those opposed to construction. Later local projects involving the firm would include the municipal projects such as the Bay Area Rapid Transit and Candlestick Park.

By the middle of the century, the firm had successfully expanded to New York City and Washington, D.C. The firm aggressively acquired talent from other firms, such as when it lured away forty litigators from Donovan, Leisure, Newton & Irvine in 1998, a move that ultimately led to the dissolution of that firm. The firm expanded internationally in part by absorbing a significant portion of the law firm Coudert Brothers in 2005, just before that firm also went under.

Though some might characterize the growth as predatory, it is hard to argue with the results. The firm has reached a total of over 1,100 attorneys in twenty-two offices scattered across North America, Europe, and Asia. In the process, the firm managed to retain high marks on both The American Lawyer’s A-List, AveryIndex’s Top 25 Prestigious Law Firms to Work For, and a perfect score in the Human Rights Campaign’s Corporate Equality Index.

However, the economy hit the firm just as hard as everyone else. In 2008, the firm was continuing to aggressively expand, adding partners from other firms that were faltering, as well as promoting from within. While the firm experienced a growth in gross revenue of 8%, this could not keep up with the additions, and profits per partner plummeted 20%. In response, the firm engaged in immediate layoffs, cutting 140 attorneys and a similar number of staffers in two rounds between November 2008 and March 2009. However since then, the firm has publicly stated that they are still committed to expanding the size and reach of the firm.

Practice Areas

Orrick is a fairly well rounded firm. Both historically and today it has a reputation for its work in public finance and projects work, but that is not where the firm’s expertise ends. Like most Northern California firms, Orrick has a strong Intellectual Property team whose growth has mirrored the growth of Silicon Valley. This is all rounded out by a very strong litigation group.

The firm’s reputation in public finance started early in the twentieth century, with its work on the financing for the Golden Gate Bridge. In addition to the previously mentioned work for BART and Candlestick, the firm also has been instrumental in large projects financing on both a national and international stage, including the $1.9 billion Capital Beltway High Occupancy Toll Lane in Virginia, and the nearly $700 million financing of a new fleet of container ships for the world’s third largest shipping fleet.

Many people in the intellectual property field are familiar with Orrick’s team. Though it is not among the handful of truly elite in the field, it is still a very strong group. The firm represents a wide variety of clients in disputes, with recent work including representing Dow AgroSciences in a patent dispute over a gene in transgenetic corn and cotton, and representing Facebook in an international dispute over foreign corporations copying its graphical interface.

Orrick’s litigation group is a strong, but often overlooked portion of the firm. It is well ranked both regionally and nationally, with respected litigators in White Collar Defense, Antitrust, and Securities Litigation. Similarly, the Labor and Employment group led by Firm Chairman Ralph Baxter, though small, has high national rankings.

Orrick is ranked number thirty-nine overall by Vault, though number four overall in the firm’s home region of Northern California. The firm has top ten rankings in Clean Tech/Renewable Energy and Labor & Employment, as well as top twenty rankings in Intellectual Property, IP Litigation, and Securities Litigation.

Chambers and Partners ranks Orrick in Band 1 or 2 nationally for the following practices: Capital Markets (Securitization), Native American Law, Projects (PPP), and Projects (Renewable & Alternative Energy). In California it has Band 1 or 2 rankings in Employee Benefits, Energy Regulation and Litigation, Intellectual Property, Labor & Employment, and White Collar Defense.

Employment

A junior associate advises that as an applicant “you don’t want to be branded as the quiet one during recruiting.” Like most top firms, Orrick attends the on campus interview programs at twenty or so top schools. While academics certainly matter, the firm is very up front about looking for people who fit the firm’s culture. They want someone who is capable of doing the work, but also “plays nice with others.” Creativity and unique talents and interests are valued, though admittedly not at the expense of credentials.

Orrick runs its summer program in five California offices, plus New York and Washington D.C. Summer associates are not assigned to any particular department, and are encouraged to work with any practice group with which they have an interest.

2009 was a rough year for Orrick, having just come off significant layoffs of nearly 15% of its attorneys. Only 70% of the 2009 summer class was given offers. Incoming 2009 associates were given the option of taking a $75,000 deferral stipend to work in public interest for a year, or take $18,500 to just go away for good. The firm delayed recruiting its 2010 summer class until March of 2010, and by then it had decided to reduce the size by more than one half.

Compensation and Benefits

Orrick was on the lockstep model until early 2010. Prior to that point, the firm was one of the first in Northern California to move to the $160,000 base pay for starting associates, forcing other firms to follow suit. However the firm now uses what they call a “Talent Model.” In effect, the firm has a three-tier compensation structure for associates, where associates are divided into the categories of associate, managing associate, and senior associate. Movement between the categories is not based on class year, but instead some measure of merit. In practice, first year associates still receive $160,000, but in later years base salary is almost always less than at those firms with the standard lockstep system. Further, the firm announced a pay freeze from 2008 until 2011.

Bonuses at Orrick are entirely discretionary, and in theory merit-based. There is no minimum billable hour number required for bonuses, though presumably it is taken into account when determining amounts. The firm has announced that it will continue to use the market bonus amounts announced by Cravath as a baseline for its own bonuses, and then adjust them as necessary. There is a concern among associates that the combination of the new salary structure and opaque bonus system will result in lower overall compensation where partners’ favorites get rewarded at the expense of others.

While there is no minimum billable hour total required for bonuses, associates are expected to bill a minimum of 1,950 hours regardless. The firm culture at Orrick does not heavily emphasize face time, but most associates try to be in the office during normal working hours. Given the compensation system, it is important to understand your relationship with the partners you work for, and base your decisions off of that. Associates working for different partners, or even different associates working for the same partner, may be under very different pressures.

The firm gives associates four weeks of vacation per year, and on average associates use about three weeks of it. These are both right in line with most of the industry. Though associates should expect to be available at least electronically during vacations, weekend work at Orrick is fairly uncommon compared to many of its peer firms.

Other benefits at Orrick include a subsidized cafeteria in the larger offices, on-site gyms in both San Francisco and Washington D.C., emergency childcare, and month social gatherings. New associates receive a $10,000 stipend and $5,000 reimbursement for relocation costs.

Partnership

Orrick uses a two-tier structure, with both equity and non-equity partners. The partnership track averages between eight to ten years to eligibility. In the past, the firm has promoted associates to partnership who have been on a reduced-hours schedule. Associates who are not promoted on their first try are reconsidered the following year. It should be noted that the firm has a history of aggressively pursuing partners as lateral hires, which may hurt the chances of promotion for associates. Despite this, a significant portion of associates believe partnership to be a reachable, if difficult, goal.

Culture

Orrick has suffered some significant blows to morale in recent years. The firm has endured layoffs and pay freezes at the associate level, and dips in profitability for partners. Despite this, the firm has remained as upbeat as possible, with many associates happy that the firm was at least transparent about the layoffs. With the roughest waters apparently behind them, firm management is again looking to expand.

Firm CEO Ralph Baxter has been quoted as saying that Orrick’s culture is the most important characteristic of the firm. Attorneys and staff are known as “a quirky bunch” who are warm and respectful. Attorneys with experience in other firms have mentioned that the firm “feels smaller” than other big firms, and Orrick’s New York office is far more laid back than New York in general. This isn’t to say that skill and productivity takes a back seat, but the firm is committed to maintaining a culture that is conducive to sanity. It is likely that the importance of this culture will be part of what allows the firm to successfully navigate the recession.