Movement is a feature of civilisation: from one country to another, one home to the next, people have always moved, constantly in search of opportunity. And any market watcher will tell you it’s very much a feature of the legal industry. Partners switching allegiances in a heartbeat.
Gone are the days when a partner would remain at the same firm for the entirety of their 30 or 40 year career. A few exceptions might include, say, Slaughter and May in the U.K. or Wachtell Lipton Rosen & Katz in the U.S.
It’s a phenomenon that has heightened competition and put law firm leaders on edge. When will their next star partner leave, along with the business they’ve cultivated, the relationships gained and revenue generated?
The finest example of this in recent times has been the much written-about transatlantic hires made by Paul Weiss Rifkind Wharton & Garrison over the past 12 months. Significant for the money involved—more than $100 million for a single hiring spree—and for the impact it’s having on the market.
It has precipitated events that are likely to have ramifications for the top end of the industry for years to come. And they have manifested in the hiring market. We all know by this point that Kirkland & Ellis, the highest grossing law firm in the world, was the primary (but not only) target in Paul Weiss’ crosshairs.
Now, Kirkland, the industry’s apex predator known for its own raids on rival firms, has had to install defences of its own.
Last week, the firm changed its policy on departing equity partners to give the firm the option to withhold the partners’ accrued compensation.
More precisely, while equity partners at the firm already have 55% of their annual compensation deferred until the following year, the new policy allows Kirkland to keep the accrued compensation at the firm’s discretion.
It’s a cold tactic designed to disincentivise departures.
But when Kirkland does something of this magnitude, it never happens in isolation. Others follow closely behind...
