💰 Big Loans for BigLaw
When the federal government passed the PPP, the forgivable loans were intended to be a lifeline for struggling small and midsize businesses. But plenty of bigger, well-connected fish quickly realized they could capitalize, too, and their familiarity with banks and complex paperwork gave them an advantage to securing these loans that mom-and-pop shops lacked.
Among those big fish? Several major law firms.
More than three dozen big firms received loans from the PPP: That includes five Am Law 200 firms that received at least $2 million.
Above The Law has the full list of firms: But some of the highlights include Boies Schiller Flexner, which has represented Harvey Weinstein, receiving between $5 million to $10 million. Kasowitz Benson Torres, which has represented Donald Trump, also received between $5 million to $10 million.
The estimated large firm payout
The Wall Street Journal estimated the total loan value to 45 top law firms, which each made at least $100 million in revenue last year, to be between $210 and $425 million. That’s an average of $4.7 million per firm at the low estimate and over $9 million at the high estimate.
But didn’t Big Law have to save jobs, too? Yes. Several firms have resorted to pay cuts and layoffs over the last several months. Still, a Wells Fargo survey revealed that while legal demand for large firms was down 1.4% the first few months of 2020 compared to last year, cash collections were up 3%.
A managing partner at Robbins Geller Rudman & Dowd LLP, which didn’t apply for a loan, was disappointed at other firms. He said the PPP was for companies that lacked reasonable alternatives for staying afloat during the pandemic -- an unlikely situation for large firms. “Our entire business model has been based on knowing you have peaks and valleys,” he told the WSJ.
Smaller firms, likely in much greater need than their highly-capitalized brethren, also received funding from the government. In all, some 14,000 law firms borrowed about $5 billion, for an average of $357,000 per firm.