Biglaw firms have a problem. They can’t get their senior partners to retire. Or to pass along their clients to younger partners fast enough.
The reasons for this unwelcome phenomenon are straightforward. First, today’s Biglaw senior partners are making too much money. Would you retire if you were making seven figures and billing 1200 to 1500 hours a year? Of course not. Especially if you are helping to support your children. Or in this age of the 70-year-old rainmaker, a grandchild’s “education” as a communications major at the top party school in this year’s rankings.
Kidding aside, I know that many senior partners have very valid reasons for continuing to maintain their Biglaw practices. But that does not mean that what works for them at an individual level is what is good for Biglaw as a whole. In fact, I think the “sticky senior” issue is the greatest long-term threat to the continued viability of many Biglaw firms….
In fact, many of the non-lockstep global behemoth (modern?) Biglaw firms already treat their senior attorneys with the same level of consideration as they give their junior partners. As a partner in those firms, you are welcome as long as you are producing, and unwelcome within two or three quarters of you not producing. Simple. In contrast, the uber-prestigious lockstep firms have done the best job of holding the line on enforcing mandatory retirement ages, even in the absence of hard and fast rules on the issue. It is a lot easier to get your partners to retire early when you have been paying them very well throughout the duration of their partner careers. (Remember how much better partners at lockstep firms do than at closed-compensation shops. The primary beneficiaries under the lockstep system are service partners, who tend to be either new-ish or old-ish partners in firms that follow that model.) It is much harder to get a rainmaker to retire at 55 when you made him wait until he was 50 with a solid $3 million dollar book before you started paying him anything close to the firm’s “reported” profits-per-partner figure.
Like many things in Biglaw, things are murkiest for firms in the middle of the pack. Particularly if the firm’s partnership is diffuse, and decisions are primarily made through some form of centralized management. In such a “culture,” especially in this “Leaden Age” of Biglaw, any arguments about preserving the long-term viability of the firm that even smell of being anti-rainmaker (senior or not, but at many firms seniority and rainmaking go hand-in-hand) are anathema. Simply put, the idea of doing anything that would convince a senior rainmaker that they would be more “appreciated” at another firm is a toxic one. But that fact does not make the conversation any less necessary for Biglaw firms to have with their partnerships. Nor does it provide a wholesale excuse to the senior Biglaw partners of today, for the betrayal of trust they have perpetrated on some level to the profession as a whole.
And a betrayal of trust it is. Many of the senior denizens of Biglaw today have achieved their positions thanks to precisely the sort of institution-sustaining behavior that they are now turning their back on. They have benefited from senior partners who preceded them at the firm turning over the reins of client relationships, in addition to the mentoring that was part and parcel of the partner experience perhaps just a generation ago. Firms today ignore the cost of this betrayal of trust at their peril. For many firms, it is fair to say there exists an inverse relationship between the “stickiness” (in terms of addiction to compensation and hoarding of clients) of its senior partners and the “stickiness” (in terms of loyalty to the firm as an institution) of its largest clients.
Put another way, a good way to assess the long-term viability of a firm or practice group is to analyze the depth of the relationship that firm or group has with its largest clients. Barring a well-thought-out and executed succession plan, the more those client relationships are dominated by senior partners, the more susceptible those relationships are to being lost. We could learn a lot from firms just by getting some disclosure regarding the age distribution of the firm’s equity partnership. (The fact that such information is not readily available speaks volumes about how Biglaw truly operates when it comes to disclosure.)
Perhaps the problem is not the presence of senior (55+, but even drawing the line at particular age can surely spur serious debate) attorneys at firms, but rather the fact that they tend to dominate the equity partnership ranks. As a litigator, I have personally benefited from the training of older lawyers, and continue to enjoy watching (usually with envy, but in a healthy inspiring sense) masterful senior litigators practice their craft in open court. But as much as we have to respect the contributions of the older Biglaw generation, and search for ways to allow them to serve their firms with dignity and while being compensated fairly, we also need to seek out ways to give the next generation of partners its chance.
Many Biglaw firms are grappling with this issue, with varying success. What I find interesting it that while many firms are caught in a bit of inertia when it comes to a real strategic plan that looks at what the firm will be even five years hence, some firms are trying to write their futures for themselves. In this group I put firms like Orrick and Dentons, which may not share much in common other than a lot of lawyers under management and being the subject of ongoing merger talk. They also, however, share something else in common: firm leaders who are young by Biglaw standards, with horizons for their own careers that are forcing them to take near-term steps to ensure the viability of the enterprises they run. Their dissatisfaction with the status quo is undoubtedly shared by a lot of younger Biglaw partners.
The heads of Orrick and Dentons are now in a position to act, and they are doing so. Biglaw firms need to get more serious about addressing the sclerotic effects of failing to transition senior partners, and their clients, out of their equity partner roles so that the younger generation can advance. If they don’t, they can expect to see more younger partners look for alternatives to practicing in Biglaw, just as they can expect clients to look for alternatives to their current Biglaw firms. The firms that get this issue right, with appropriate sensitivity for all involved, will be in a much stronger position as Biglaw tries to exit this leaden age for a new golden one.
What incentives should be offered to senior partners to encourage them to pass along their clients? Let me know by email or in the comments.
Anonymous Partner is a partner at a major law firm. You can reach him by email at [email protected].