So, What to Make of Baker McKenzie Raid of Munger?



 "Baker McKenzie is picking up a 17-lawyer corporate group from Munger, Tolles & Olson in Los Angeles, the latest move to expand its deals roster." - Bloomberg Law, April 24, 2024

That includes 11 partners and six associates, decimating Munger's corporate practice. This is just-in-time for the global turnaround in M&A. And it follows earlier poaching this year by Baker McKenzie from Latham and Paul Hastings.

Massive raids like this and the Paul, Weiss one of Kirkland & Ellis which stunned the legal sector could become standard as competition among firms intensifies. 

To navigate the current environment, documented the 2024  Power Ranking of Am Law 100: Flash Points, large law firms have to keep reinvesting and renewing. Usually that is done by hiring lateral talent, not growing a practice within organically. It can also take off through mergers with other firms. All that takes money, of course. 

In the Fortune 100, for decades there has also been the growth strategy of acquiring what it needs instead of starting internally from scratch to build a new business or beef up/turn around an existing one. 

But it was way back in an interview with Bloomberg Law in October 7, 2021 that Paul, Weiss chair Brad Karp essentially articulated that reality for large law firms. Karp hammered that law firms without the financial resources to hire star talent wouldn't be able to make it. The stars can demand the $10 million to $20 million annual compensation. The takeaway: Your future will be determined by your war ches. 

Those stars' brandnames on the marquee, not the brandname of the firm per se, are what bring in the business and allow the pricing increases. About the latter, according to CounselLink Trend Report, on the average partners increased their billing rate 5.4% last year. 

So, the dynamic that is portrayed in the expose "Servants of the Damned" by David Enrich as greed is really about brute survival. That's the way the game now goes. To be in, a firm needs the big bucks.

Incidentally, during the current white-collar recession, much of the labor market has become binary. Either you have and hold onto the blockbuster job or you're out of the game. More of my coaching clients fear being forced into the abyss. There may be no way back as so much change, including the impact of generative AI, resets business-as-usual.

Limiting beliefs? Self-defeating? Stuck? Complimentary consultation with Coach Jane Genova (text/phone 203-468-8579, janegenova374@gmail.com) 



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