We are going to need to continue to be extremely circumspect in making new partners … In an environment in which net income is falling and the point is falling, point dilution compounds the negative impact.
The sentiment is so perfectly focused on the ultimate bottom line. Effort, talent, commitment, paying your dues? Bah! When the chips are down and people are getting squeezed, “point dilution compounds the negative impact.” It’s a business, don’t let anybody tell you otherwise.
So really, I’m not at all surprised about the latest news coming out of Cravath. Am Law Daily reports:
And now the year’s grand finale: Cravath, Swaine & Moore has just confirmed that it will be making no new partners. That’s right: Zero.
It’s always been notoriously hard to break into the partnership at Cravath, but we can’t remember the last time the firm completely nailed shut the doors to its innermost sanctum (nor could Cravath, or at least the firm declined to say). The firm made three partners in both 2007 and 2008. Could it be that the economic meltdown has hit Cravath harder than other firms?
Of course, according to Cravath, these high level business concerns didn’t play a part in the firm’s decision to not make any new partners. Instead, it appears that everybody that was up for partner this year just kind of stunk.
Details after the jump.
The recession rolls on, this year’s bonus was half of what it was last year, but Cravath wants you to believe that economic factors didn’t play a role in its partnership decisions. Instead, the firm would rather say that all of its senior level associates kind of suck:
Allen Parker, Cravath’s deputy presiding partner, says the economy is not to blame for the absence of new partners this year. “For our firm, whether to make someone a partner is a thirty-year decision,” he says, noting that Cravath’s remains a single-tier partnership. “We never let the decision be influenced by short-term economic considerations.”
In fact, says one senior Cravath partner, the firm is on an upswing, with business picking up 10 percent this year. Finance, M&A, and litigation all report an uptick, this partner says.
The reason Cravath didn’t elevate anyone this year, says this partner, is that the pickings were slim: “We want to make partners even in bad economic times. But this year, no one met our standards.” The same source says that very few–less than a handful–of the 80 associates that started in the law school class of 2002 (the class up for partnership this year) remain at the firm at all; some promising associates went into investment banking when the going was hot. In sum, no associate was put up or had the expectation of being anointed partner.
So Cravath’s superstars got out while the going was good, and all the ones who are left are chopped liver? Imagine being a senior associate at Cravath and trying to generate business in a crappy economy after that ringing “no one met our standards” endorsement from the firm.
We already know that the classes of 2009, 2010, and 2011 picked a terrible time to go to law school. But people in the classes of 2002 and 2001 who wanted to make partner don’t have the best timing either.
And Then There Were None [Am Law Daily]
Earlier: New Partner Watch: The Jones Day 36
New Partner Watch: No Partnership for You!
More Internal Documents from Simpson Thacher