Christine Simmons and Andrew Maloney from the American Lawyer write in response to a recent lateral from Cravath to Davis Polk:
"As law firm culture inevitably changes as a result of compensation shifts, firms can expect more lateral movement, recruiters said, even if firms revised their pay system to retain partners.
“We’re going to see a little fallout from the firms that recently changed lockstep. As they begin to use the tools to pay people more from others, the others may push back and be resentful or not like what [happens to the culture],” said New York-based Alisa Levin of recruiting firm Greene-Levin-Snyder. “There is no doubt the culture is significantly shaped from the compensation system, and when you change something as dramatic as the comp system, there is going to be fallout.”
Traditional lockstep firms are having to modify their compensation systems to stay competitive in the hot lateral market, which isn't likely to slow down at the beginning of 2022. Whether it's the rise in private equity as a driver or the general decrease in loyalty partners and clients feel toward firms, the talent wars seem to only be gaining speed and intensity.
As we consult partners and managing partners across the nation, we regularly sense the growing pressure to add profitable groups while holding the existing partnership together. The pressure reveals cracks in the foundation, while also providing unprecedented opportunity for those open to new and creative solutions. If you would like a free consultation with one of our recruiting professionals, please contact us today. We look forward to hearing from you.