šŸ’° 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. ā€œOur entire business model has been based on knowing you have peaks and valleys,ā€ he told the WSJ.

The Verdict 

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.