Cravath partners enjoy discounts at Subway, among other perquisites.
It’s rare for partners to leave Cravath, given the prestige, pay, and perks associated with partnership at the firm. And it’s especially rare for a Cravath partner to leave for a rival firm, as opposed to a Wall Street investment bank or major corporation.
Cravath has a very specific system for running itself, and that system has served Cravath very well over the years. As its competitors expend increasing amounts of effort to climb the prestige hierarchy and expand across the globe, Cravath remains at the top, serenely servicing its clients — and printing money for its partners. Part of the reason why Cravath so rarely loses partners to other firms is that it’s so profitable overall that even a partner being paid under Cravath’s lockstep system still does better than a “star” partner at many other firms.
So that’s why today’s news is so notable. A prominent young partner at Cravath has decided to leave Worldwide Plaza and take his talents across town.
Who is the partner in question, and where is he headed?
Is this just my weird perception, or are law firm managing partners being surveyed constantly? It seems that every other week, some law firm lender or consultancy or recruiting firm is touting the results of a managing partners survey. Managing partners have things to do other than respond to surveys — like, well, managing law firms.
Despite the proliferation of such surveys, we do appreciate the information and insight they contain. So let’s check out the recently released results of one of the most prominent surveys, the American Lawyer’s annual Law Firm Leaders survey….
* Since Obamacare’s here to stay, states are scurrying to meet the health care law’s deadlines. Better hurry up, they’ve only got a week left to make a decision on insurance exchanges. [New York Times]
* “It’s been an interesting and tough four years. I just really don’t know. I don’t know at this point.” Two days after the election, it looks like Barack Obama may have to replace Eric Holder after all. [Blog of Legal Times]
* Managing partners at midsize firms are feeling good about about business in the coming fiscal year, and they’re even projecting higher profits per partner. And unicorns, too! [National Law Journal (reg. req.)]
* Where did a portion of the money behind Harvard Law professor and Senator-elect Elizabeth Warren’s Massachusetts race come from? Biglaw firms like Nixon Peabody and Mintz Levin. [Corporate Counsel]
* Apparently a convicted abortion doctor killer is trying to intervene in Paul Ceglia’s ownership case against Facebook via kooky letter. Sorry pal, but there can be only one Jonathan Lee Riches. [Wall Street Journal]
Now is the time on ATL when we dance — around the subject of money. With just two months left in the year, law firms are focused on collections, associates are focused on bonuses, and partners are focused on profits. Even though money is not the be-all and end-all of law practice, as we have emphasized in these pages before, it’s a topic that people follow — and a topic that we will therefore be covering closely in what remains of 2012.
Earlier this week, the American Lawyer magazine touched upon a topic that doesn’t get as much attention as it should in the world of Biglaw: compensation for non-equity partners. Let’s take a look at Am Law’s findings….
I like talking about partner compensation so much, I wrote a three-partseries on the topic. It was nice to hear from Jeffrey Lowe, the Global Practice Leader of Major, Lindsey & Africa’s Law Firm Practice Group and the brains behind the MLA partner compensation survey, who graciously expressed both his enjoyment of my treatment regarding the survey results and an invitation to contact him directly with follow-up questions.
In response, I proposed a written email interview, which you can read below. Thanks again to Jeffrey for his yeoman’s work on the survey, and his willingness to offer some additional commentary on the always scintillating subject of partner pay….
Every firm has them. And partners dutifully show up. Mostly for the free lunch. This month we are serving Tex-Mex. One percenters’s loading up on the free food like a Soviet-era pensioner given the keys to the potato warehouse. It can be a gruesome scene.
So what happens at these monthly gatherings of Biglaw’s barons and baronesses? Nothing important. (You want important stuff, you need to crash an Executive Committee meeting. Or for the increasingly common Biglaw dictatorships, you need to bug Chairman Mao’s office.) At least at the scheduled monthly partner meetings. “Special” partner meetings are a different story. You want those to be boring, like calling for a vote on a group of laterals. “Exciting” special meetings, while good for Lat, are not good news for the average partner usually. Stability is one of the biggest draws of a Biglaw partnership. Stability means no shocking announcements, over which you have no control.
Anyway, here is how the typical monthly partner meeting goes….
The most shocking result of the recent survey on partner compensation conducted by Major, Lindsey & Africa was how much better the average partner does in firms with open compensation systems — almost $350,000 better on average, year in and year out. To me, that is the difference between retiring at 55 or 65. A big deal.
Have some fun. Tell your average law student that the average compensation for Biglaw partners at closed compensation shops (irrespective of equity status and seniority) was only $465,000, and see the reaction. Or pop an associate’s bubble. And realize that with demand for Biglaw services trending down, there is only so much time left before partner compensation generally starts to take a hit. I always knew about the disparity between open and closed firms, and I had heard about it anecdotally (I think Lat mentioned in an article a few years ago a personal friend who saw his comp climb dramatically after lateraling away from a closed comp firm). But I never really appreciated the scale until this survey came out.
I would think that anyone (especially younger partners with growing books) who could get out of such a firm would at least be trying to (ergo the need for a growing book). Even if your numbers are stellar, and your book is growing along with your traditional working collections, it is too easy for a closed comp chieftain to declare that you need to repeat the performance to make sure its sustainable. Whereas in a open system, you have leverage right away, and can convincingly argue to the compensation committee that failing to reward you would risk discouraging other potential achievers. And that you will leave — but one needs to be subtle on that front. Threaten to leave a closed comp place, and if they really like you, they’ll offer to match whatever new offer you get (thereby confirming they have been skimping on you all along)….
The recent survey on partner compensation conducted by Major, Lindsey & Africa, which I discussed last week, is full of interesting information. First off, I never really knew how many Biglaw partners there are. The answer? Around 75,000, which includes partners from all firms ranked on the Am Law 200, NLJ 350, or Global 100 in the last five years. Throw in another 1,000 or so partners who were Biglaw partners but left to form high-end boutiques — not included in the survey, but I consider them Biglaw partners since they typically work for similar clients — and you still have a pretty small number relative to the number of lawyers in the world. The figure of 75,000 amounts to less than two years’ worth of new U.S. law school graduates.
Very interesting, especially considering the forty-year-or-so age spread between active partners. Seriously, how realistic is it for any one law graduate (irrespective of pedigree) to think they will beat the odds and eventually make partner? So many things need to go right — it is amazing.
The world keeps getting smaller, but the law firms keep getting bigger. The American Lawyer magazine just announced its Global 100, the world’s 100 largest law firms in terms of total revenue, and Biglaw seems bigger than ever.
Despite the challenging economic climate, law firms continue to grow. In three key categories — revenue, profits per partner, and attorney headcount — the top firm for 2012 boasts a bigger number than last year’s #1 firm….
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We currently have a number of active openings for associate roles at US and UK firms in HK / China, Singapore and two new in-house openings. As always, please feel free to reach out to us at firstname.lastname@example.org in order to get details of current openings in Asia, as well as to discuss the Asia markets in general and what we expect for openings later this year. Our Evan Jowers and Robert Kinney will be in Beijing the week of March 25 and Evan Jowers will be in Hong Kong the week of April 1, if you would like to meet them in person.
The US associate openings we have in law firms are in the usual areas of M&A, cap markets, FCPA / white collar litigation, finance, and project finance. The most urgent of our top tier (top 15 US or magic circle) law firm openings in Asia (among many other firm openings that we have in Asia) are as follows:
• 2nd to 5th year mandarin fluent M&A associates needed in Beijing and Hong Kong at several firms;
• Korean fluent 2nd to 4th year cap markets associate needed in Hong Kong;
• 2nd to 5th year Japanese fluent M&A associates needed in Tokyo;
• 4th to 6th year mandarin fluent cap markets associate needed in Hong Kong;
• 2nd to 4th year M&A / cap markets mix associate needed in Singapore.
The last time I flapped my wings your way, I tried to make at least enough noise about your mobile phone to make you more than a little bit uncomfortable. I hope I did. If enough of us become anxious enough about the known and unknown unknowns and knowns in our mobile phones, then we can start making wise decisions about how to manage that information and its resultant investigations.
Today, I’d like to put a finer point on the last installment’s topic by asking a question that seemed to catch most attendees off-guard at a conference panel that I moderated last week: is there discoverable personal information in a mobile app? Our panelists’ answer was a uniform “yes” with one stating that, if he had to choose only one type of data that he could discover from a mobile phone, he’d choose app data. Why? Because there’s simply so much of it and because almost all of it is objective – not just user-created like an email – but machine-tracked like GPS, usage duration, log in and log out times, browsed web addresses, browsed actual addresses. Also, most of us seem to have the idea that data doesn’t actually “stick” to our mobile devices the way it “sticks” to our hard drives. Maybe there’s a disconnect based on the fact that our phones are mobile so we assume the data is mobile to?
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