In the News Corporate Counsel

Who Represents America's Biggest Companies

September 2007

Plus Ça Change . . .

Familiar faces show up on our annual survey of the most-used outside firms—even though we changed our methodology.

It's easy to get stuck in a rut: Just do the same thing over and over again. Every spring we conduct a survey of the go-to law firms for America's biggest corporations, feeling a bit like the characters in the Bill Murray movie Groundhog Day. For the past six years, the same marquee firms have topped the list with reassuring regularity.

But there were a few problems. For one thing, we realized that our methodology needed a tune-up. For the past few years, we've asked law departments to name their seven top firms in four different practice areas. But some departments didn't want to offend their firms, or had trouble playing favorites by limiting their top picks.

So this year, in the hopes of getting more comprehensive data, we tried a more objective approach. We combed through public records—court papers, filings, etc.—to tally which law firms were being used by the Fortune 250. And guess what? Despite the change in methodology, the same Am Law 200 law firms topped our lists of the most-mentioned.

This might bother some people—all these changes for nothing?—but not us. It actually proves our thesis. For all their talk of convergence, for all the time, ink, and computing power lavished on RFPs, for all the beauty contests and, well, you get the idea, there's one essential truth at big law departments. Reputation and firepower matter most when something's really important. Just as a cardiac patient will seek the best doctor, companies in litigation or seeking protection of their IP will hire the best, and they won't sweat the hourly rate.

The Usual Suspects

Public records helped us track down the go-to firms for America's biggest companies.

When the results of our sixth annual Who Represents America's Biggest Companies survey came in this summer, many of the same names landed on top. Take the San Jose–based networking giant Cisco Systems, Inc. In 2005 its most-used corporate transaction firm was Fenwick & West. In 2006? Fenwick & West. What about defense contractor Lockheed Martin Corporation? In 2005 the Bethesda, Maryland–based company named King & Spalding as the transactions firm that it turns to most. And in 2006? King & Spalding was still number one.

In a way, the similarity in the results came as no surprise. What struck us in the past was the consistency of our "most mentions" from year to year. "There's no real reason to move elsewhere, and there's risk involved with moving on" to other firms, says Rees Morrison, a law department consultant at Hildebrandt International in Somerset, New Jersey. Companies, he adds, "need these relationships, [and] most law departments stick with the partner and the firm they trust."

Still, we were intrigued by the findings. We changed the methodology for the survey this year and were curious to see how this new approach would affect the results. In the past, we asked general counsel at the Fortune 250 to list the seven firms that they rely on most for litigation, corporate transactions, labor and employment, and intellectual property. But corporate counsel are a discreet group, and many were reticent to name the firms that top their speed-dial menu.

This year, in search of a more complete data set, we combed through state and federal records to see which law firms corporations were actually using when it came to commercial law and contracts litigation, corporate transactions, employment and labor litigation, and IP litigation and patent prosecution. We tallied the number of mentions each firm received and compiled our new list. Keep in mind that, in order to appear on the charts in commercial law and contract litigation, and labor and employment litigation, firms needed to appear in at least two lawsuits. But because fewer firms appeared when we examined documents for corporate transactions and patent filings, we included every firm named in those areas. (For more on how we conducted the survey, turn to "Running the Numbers," page 80.)

Our new system, though improved, isn't bulletproof. We realize that much of what goes on in legal departments never sees the inside of a courtroom, so our emphasis on litigation and court filings inevitably limits how many times certain firms appear. Our data sources, which survey all federal courts, don't cover every state. And we don't make any distinctions between firms that may have been hired repeatedly and firms that are preferred providers. But as a trade-off, we have more data for more companies—and hence, a more complete picture of corporate America's go-to law firms.

Despite all of that, familiar faces dominate our listings. Chicago-based Kirkland & Ellis tops the commercial law and contracts litigation chart, and New York–based Skadden, Arps, Slate, Meagher & Flom, which has appeared among the top two corporate transaction firms from day one, led the pack again this year. Davis Polk & Wardwell and Sullivan & Cromwell tied for second. Littler Mendelson won the nod when it came to handling the most employment and labor matters, with Ogletree, Deakins, Nash, Smoak & Stewart and Morgan, Lewis & Bockius tied for number two. Fish & Richardson, Banner & Witcoff, and Hogan & Hartson tied for the top spot for intellectual property.

There's a good reason for this consistency, say consultants and in-house lawyers at blue-chip companies. When it comes to high-profile matters, it's all about outside counsel's track record and the firm's relationship with the law department.

At General Electric Company, for example, vice president and senior counsel of litigation and legal policy Alexander Dimitrief says his team relies on the same select group of law firms and partners. "It's more than just familiarity with the company. The lawyer demonstrates a certain grasp of strategy and the image you want to project," Dimitrief says. "They know what makes [us] tick." (For employment and labor litigation, for example, GE uses Dins-more & Shohl; McCarter & English; Ogletree, Deakins; Quarles & Brady; and Spencer Fane Britt & Browne.)

While GE may be sticking with the firms it knows, some companies don't automatically hire the firms that everyone else relies on. Take, for example, Pfizer Inc. Our data show that the New York-based pharmaceutical company uses a lean roster of firms for corporate transactions that don't appear at the top of our charts—Cadwalader, Wickersham & Taft; Dechert; and Fiddler, González and Rodríguez.

General counsel Allen Waxman says he doesn't necessarily look for big names—he looks for big ideas, and firms that might go against the grain. "Will [a firm] bring a unique perspective on a new matter?" Waxman asks. "To say, 'I've done this a million times and here's a model' is great. But I'm interested in how you're going to handle this particular matter."

METHODOLOGY:

Running the Numbers

How did we find out which law firms represent America's largest corporations? We did the research. In prior years, we asked the general counsel at the Fortune 250 to list up to seven primary law firms for each significant practice area: litigation, corporate transactions, labor and employment, and intellectual property work. But this year, seeking more complete data, we turned to public records to determine which outside counsel were used by America's biggest companies in 2006. We looked at the areas of commercial law and contracts litigation, corporate transactions, labor and employment litigation, and intellectual property.

To find the most widely used firms for litigation involving commercial law and contracts, employment and labor, and intellectual property (which also included firms involved in trademark and copyright suits), we turned to Thomson West's Litigation Monitor, which compiles information about lawyers, law firms, roles, representation, and parties from Westlaw documents. Cases and opinions include federal circuit court dockets filed in the U.S. Court of Appeals; federal district court dockets on active and inactive civil and criminal cases; and federal case law decisions from the U.S. Supreme Court, courts of appeals, former circuit courts, district courts, bankruptcy courts, former Court of Claims, Court of Federal Claims, Tax Court, related federal courts, and military courts. At the time of our research this past spring, the database also contained information on 24 state dockets, although law firms are identified in only 14 of those states. Of those, nine did not cover all counties in the state.

We searched patent and trademark filings at the Patent and Trademark Office to find which firms represented the Fortune 250 for patent prosecution. (Firms used for IP litigation and patent prosecution are combined in the IP column.) For corporate transactions, we turned to Thomson West's Deal Monitor, which contains legal representation data for registrations, mergers, and acquisitions. Thomson West compiles information about securities transactions, issuers, underwriters, lawyers, law firms, and their respective roles.

Firms had to pass a minimum threshold to earn a spot on our chart. They had to be mentioned in at least two suits in 2006 to get a spot in commercial law and contracts, employment and labor, and intellectual property litigation. For corporate transactions or intellectual property patent prosecution, we included every firm named in the records we searched.

We collected data for 220 companies in at least one practice area. Where we do not have data for a company, we noted "N/A" to explain that the data was not available or not applicable. Law firm names have been shortened for space.

Playing Favorites

We researched which outside law firms the Fortune 250 used in 2006 for commercial law and contracts litigation, corporate transactions, labor and employment litigation, and intellectual property. These are the firms that appeared most often in the companies' public filings. We also added up all the mentions in each practice area to determine the overall winner — Skadden takes the cake.

The Upper Crust

Skadden is number one this year in overall mentions.

Firm	Number of Mentions
Skadden	26
Littler Mendelson	20
Ogletree, Deakins	18
Sullivan & Cromwell	18
Davis Polk	17
Morgan, Lewis	17
Sidley Austin	16
Cleary, Gottlieb	14
Jones Day	13
Paul, Hastings	13
Sheannan & Sterling	13
Richards, Layton	12
Seyfarth Shaw	12
Kirkland & Ellis	11
Cravath	10
Hogan & Hartson	10

Down to Business

Kirkland & Ellis inches to the top of the commercial law and contracts litigation list.

Firm	Number of Mentions
Kirkland & Ellis	4
DLA Piper	3
Adomo & Yoss	2
Baker & Daniels	2
Bowman and Brooke	2
Drinker, Biddle	2
Greenberg Traung	2
Hogan & Hartson	2
Howard Lee Schiff	2
Hunton & Williams	2
King & Spalding	2
Morrison & Forester	2
Ogletree, Deakins	2
Paul, Hastings	2
Quinn, Emanuel	2
Schnader, Harrison	2
Shook Hardy	2
Stroock & Stroock	2

Battle for the Minds

Three firms tie for the lead in the IP category this year.

Firm	Number of Mentions
Banner & Witcoff	4
Fish & Richardson	4
Hogan & Hartson	4
Baker Botts	3
Blakely, Sokoloff	3
Foley & Lardner	3
Harness, Dickey	3
Keker & Van Nest	3
Kirkpatrick & Lockhart	3
Perkins Cole	3

Job Well Done

Littler Mendelson's hard work pays off in labor and employment litigation.

Firm	Number of Mentions
Littler Mendelson	19
Ogletree, Deakins	16
Morgan, Lewis	16
Seyfarth Shaw	12
Paul, Hastings	9
Jackson Lewis	7
McGuireWoods	7
Akin Gump	5
Ballard, Spahr	5
Fisher & Phillips	5
Ford & Harrison	5
Quarles & Brady	5
Reed Smith	5

Transaction Packed

Twenty-three mentions in corporate transactions helped Skadden take the lead.

Firm	Number of Mentions
Skadden	23
Davis Polk	17
Sullivan & Cromwell	17
Cleary & Gottlieb	13
Richards, Layton	12
Shearman & Sterling	11
Simpson, Thacher	11
Cravath	10
Sidley Austin	10
Weil, Gotshal	8
Debevoise & Plimpton	7
Dewey Ballantine	7
Jones Day	7
Mayer, Brown	7
Osler Hoskin	7
Wachtell	7

Practices