US firm Akin Gump expands cash reserves
Akin Gump Strauss Hauer & Feld is moving to expand its cash reserves by requiring more lawyers to take an equity stake.
Leading US law firms are increasingly calling on capital contributions to wrestle down debt: according to a survey of 171 law firms by Citi Private Bank’s Law Firm Group, partner capital contributions jumped 32 percent between 2007 and 2011, from an average of $229,000 to $303,000. Meanwhile, debt levels have been dropping steadily.
“As banks have begun to tighten up lending requirements for law firms, it’s putting pressure on law firms to have capital or not borrow as much,” said Tom Clay of the legal consulting firm Altman Weil. “You’ll see more of this happening over the next year or so.”