Paul Hastings Janofsky & Walker LLP

Published June 2011

2011 Vault Ranking: 33

Overview

Over the past twenty years, Paul Hastings has transformed from a California upstart to an international giant. Best known for a world-renowned employment practice and real estate work, the firm is a full service shop with offices around the world. It has had a rapid rate of growth, merging with smaller firms twice in the twenty-first century, and adding a dozen offices in that span. The firm now hosts over a thousand attorneys in eighteen offices around the world.

The firm is relatively young by large firm standards. It was founded in 1951 by a trio of Harvard graduates working in Los Angeles. For the first quarter century of its existence, it was solely a Los Angeles shop, only beginning to expand eastward with Atlanta and Washington D.C. offices in the late seventies. Over the last part of the twentieth century, the firm continued to expand, opening offices in Tokyo and London.

With the turn of the century, the firm engaged in key mergers with the Chinese firm Koo and partners in 2002, and Frankfurt based Smeets Haas Wolff in 2008. Paul Hastings also opened three additional offices in the same time span. The firm now has one of the largest Asian presences of any American firm, as well as featuring a strong European practice that advises on various national and EU legal issues.

The firm’s growth can be quantified in many ways. Profits per partner have doubled since 2002, and annual revenue has seen growth as high as twenty percent at times. The Financial Times has ranked the firm in the top twenty of the “FT Law 50 2010” and ranked number ten on The American Lawyer’s A-List of the twenty most successful law firms in America. The firm is one of only two U.S. firms founded after 1950 to reach the top 15 of any meaningful rankings.

However the firm has not been immune from the economic downturn. In 2009, revenue dropped almost ten percent, with profits sliding only 1.3 percent. The firm controlled costs by laying off a reported forty-four attorneys in 2009, and engaging in a salary freeze in some offices. However since then, the firm has again begun increasing in size once more, thanks to a number of partners defecting from peer firms.

Practice Areas

The firm organizes its associates into five distinct departments: corporate, litigation, labor and employment, real estate, and taxation. The fact that a firm of this size dedicates entire groups to both employment and real estate should alone be a clue that these practices are very important to the firm and high profile, but it is very strong in the other areas as well.

The employment department is arguably one of, if not the best in the country. It has long been a staple of the firm’s practice in California, and has successfully expanded along with the rest of the firm. It has had the same prominent clients that one would expect to see on the client list of any top department at a major firm. It has represented such organizations as Bank of America, AID, GlaxoSmithKline, and even the American National Red Cross.

The corporate group makes up approximately one third of the associates at the firm, and is involved in a number of high profile deals. It assisted in the $450 million restructuring of Wells Fargo, and represented Marvel Comics in its $4 billion takeover by Disney. The litigation team meanwhile more than holds its own, serving as lead counsel of UBS and Morgan Stanley.

Ranked number 33 overall by Vault, the firm has two very highly ranked practices. It holds the number two spot for Labor & Employment Disputes (as well as number three for Labor and Employment in general). It also has the number five ranked Real Estate practice. The firm holds top ten regional rankings in Atlanta and both Northern and Southern California.

Chambers and Partners ranks Paul Hastings nationally in Band 1 or 2 for the following practices: Investment Funds, Labor & Employment, and Leisure & Hospitality. The firm also has Band 1 or 2 rankings for a number of practices in major markets. In New York this includes Corporate/M&A, Labor & Employment, and Real Estate. In California the list includes Banking & Finance, Employee Benefits, Labor & Employment, Real Estate, and Tax.

Employment

Like most firms, Paul Hasting starts by looking for applicants with stellar academic records. After that, the firm wants to see well-rounded individuals with interesting backgrounds. Ideally candidates would have some work experience involving substantive responsibility in an area related to their prospect practice area. This may mean a CPA going into tax practice, or a finance background if joining the corporate group. If someone doesn’t have this, then the applicant would be best off if they could show leadership and communication skills through participation in debate teams, political internships, or the like.

Paul Hastings runs a ten week long summer program in nine domestic offices. Splitting with an international office can be done, but only for summer associates with appropriate language skills. Workload at Paul Hastings is somewhat higher than peer firms during the summer programs. Summer associates are expected to complete more than fifteen assignments during the program. Work is generally of a substantive nature, and can be challenging. Summer associates are out of the office by 6:30 PM most days, but should plan to have weekend work at least a couple times over the course of the summer.

The firm holds one or two training sessions each week. In addition, associates may attend an unlimited number of attorney lunches, with budgets varying by office. There are generally multiple social events each week, ranging from concerts and baseball games to wine tastings and cooking classes.

In 2009, the firm made offers to only 70% of summer associates, and cut the size of its summer class in half for 2010. The firm deferred some incoming associates of both the class of 2009 and 2010, but none were deferred longer than January of the following year.

Compensation and Benefits

Compensation at Paul Hastings uses a lockstep system for salaries. All associates begin at $160,000, with the exception of the Atlanta office, which begins at $150,000. The firm has had no firm wide salary freezes. The firm is a follower in terms of bonus amounts, but tends to match the market leader. Bonuses tend to be standardized, but are based on “economic contributions” and “exceptional non-economic efforts.” This means that in rare instances the firm has rewarded associates who have made “significant” contributions to the firm with above average bonuses.

The firm has an annual target of 2,000 billable hours, with most associates averaging somewhere between 1,950 and 2,100 hours. Generally 1,950 hours are required to qualify for a full bonus. Associates who fall significantly short of the hour target may face a variety of consequences, including a reduction or denial of a bonus. Given that the firm has engaged in layoffs, this should be considered a reasonably likely outcome for a severe under performer.

The firm has no formal face time policy. Historically, the firm has been relatively relaxed about it as long as work was getting done. But in recent economic times, associates have felt pressure to keep regular hours. Those who do tend to get better work, and from that get better bonuses. The firm also has no actual vacation policy. As long as work is getting done and hour targets are being met, associates in theory can have unlimited time off. In practice, associates rarely take more than three weeks off a year, fairly consistent with that at peer firms.

Other benefits at Paul Hastings include annual retreats, happy hours, and subsidized gym memberships. The firm also provides weekly breakfasts, subsidized cellular phone service, and backup childcare. Incoming intellectual property associates who have a relevant Ph.D. or patent agent experience may receive class year credit.

Partnership

Paul Hastings has a single partnership track, theoretically leading to eligibility at eight and a half years. In practice most associates do not get considered until their tenth year. Associates who are not successful on their first attempt are automatically reconsidered the following year. However, most associates are pessimistic about the chances of making partner at the firm, though not significantly more so than at peer firms. Common complaints include that the path to partnership is vague, and that there are simply very few partners promoted for a firm of this size.

Culture

Paul Hastings, though it has grown to an international megafirm, still shows its California roots in the firm culture. It is relatively casual, laid back, and informal. This is not to say that the firm is full of people without drive or work ethic. To the contrary, the work is just as difficult and demanding as other firms, but there is an expectation that everyone is an adult, and will get their work done without being constantly monitored and having their hand held. There is no need to impose artificial structures and rules. Consider the vacation time policy, or lack thereof: there is no reason to tell an associate how many exact days she can or cannot take off, as long as she is still getting her work done.

The firm tends to be a very social place, and associates often meet and spend time together outside the office and at non-firm sponsored events. Though events have been scaled back for budgetary reasons in the current downturn, they are still occurring. Admittedly there have been some morale hits due to layoffs and the like, but the firm is generally weathering the storm as well as any other firm.