Biglaw, Lateral Moves, Musical Chairs, Partner Issues, Partner Profits

Musical Chairs: Kirkland Snags A Skadden Partner, But A Simpson Partner Stays Put

Kirkland continues to raid rivals, offering eye-popping pay packages.

By  
on

When it comes to exciting lateral moves in the legal profession, Kirkland & Ellis is where it’s at right now. The #2 firm in the ATL Power 100 — and the #1 firm in Chicago, by a country mile — is picking up and shedding prominent partners at a breakneck pace.

Today we’ll tell you about K&E’s successful raid on Skadden Arps — and its unsuccessful attempt to pry a partner away from Simpson Thacher…

Congrats to Kirkland on successfully luring corporate finance partner Richard Aftanas away from Skadden in New York (as just reported by Susan Beck over at Am Law Daily). Maybe Aftanas didn’t want to work in Skadden’s sketchy new neighborhood.

Even more interesting, however, is the deal that Kirkland was unable to close:

The Am Law Daily has learned that Simpson Thacher & Bartlett, which lost two top partners to Kirkland over the past year, lured back initial public offering specialist Joshua Bonnie this summer, ahead of his planned departure for Kirkland. According to three people familiar with the move, Simpson Thacher decided to break its lockstep-based compensation system to keep Bonnie, who joined the firm in 1996 as an associate. One person says Simpson Thacher gave him a $2.5 million raise, making Bonnie one of the top-paid partners at the firm.

Interesting — so it seems like STB has had it up to here with losing partners to K&E. Because Bonnie is a relatively young partner (a 1995 graduate of UVA Law), coming up with cash to compete with Kirkland required Simpson to pay above his seniority-based pay grade. It’s accurate, however, to refer to STB’s partner pay system as “lockstep-based” rather than strictly lockstep (like Cravath or Cleary or Debevoise). It’s our understanding that Simpson’s system could be described as “modified lockstep” (in which underperforming partners sometimes get docked points in the compensation review, for example).

Sponsored

What kind of numbers might we be talking about? Am Law offers some averages:

It’s not clear how much Bonnie is currently making, but Simpson Thacher’s average profits per partner last year were $3.125 million, according to our reporting. Kirkland’s PPP came in at $3.28 million. Simpson Thacher also agreed to accelerate Bonnie’s retirement date by five years, according to a person knowledgeable of the matter.

Accelerating retirement is one way of improving Bonnie’s package without doing too much violence to the Simpson lockstep-based structure. Leave it to transactional lawyers to come up with smart solutions and clever workarounds.

We enjoy reporting on lateral partner moves before they’re officially announced. If you have a hire to tell us about before it happens, just drop us a line.

Kirkland’s Latest Raid Targets Skadden, But Simpson Partner Slips Away [Am Law Daily]

Sponsored

Earlier: Musical Chairs: A Recent Lateral Partner’s Mysterious Departure

Topics

, , , , , , , , , ,