Poaching in Law Firm Sector Potentially Catastrophic When Clients Exit with Partners

" ... when clients refuse to follow partners out of the firm ..." - Brad Karp, chair of Paul, Weiss, cites how that can mitigate the risks, ranging from branding to business development, associated with the massive poaching of law-firm stars. This observation by Karp is extracted from the panel's comments at the International Bar Association, May 15, 2024 and published in Law.com. 

The panel of leaders focused on internal law-firm strategies to reduce partner flight. Essentially their consensus was this solution: creating a partner culture of belonging, purpose and equality. About the latter, too many junior partners have an identity of being very senior associates. 

However, come on, stars come and stars go. Soon enough law firms with war chests/powerhouse brandnames have the financial resources and the prestige to replace them. And the business goes on. Kirkland & Ellis is still doing well after James Sprayregen left for financial services holding firm Hilco Global.  

The moving parts, though, get truly gummed up when the client or clients go with that partner to another firm. Note that Sprayregen didn't lateral to another law firm.

Client exits represent 1) a direct loss of business and 2) possible reduction of brand equity since that client was part of the firm's identity. 

An example could be the recent departure of partners from Paul, Weiss associated with major account Apollo. Among them has been Taurie Zeitzer to White & Case. Her assignments included managing the $5.2 billion acquisition of Arconic.

In response to those partner exits, will Apollo diversify its use of law firms? I have encountered that question in scrolling through the professional anonymous networks focused on large law firms. 

It is likely no coincidence that Paul, Weiss recently is diversifying its client accounts. It has reached into the London, Brussels and Latin American markets to create a presence. 

Yesterday's panel at the International Bar Association took an optimistic tone in its approach to preventing the fox from raiding the hen house. But, given the confluence of factors impacting the business of law firms - with generative AI at the top of list - much of that may be magical thinking. Partners face so much risk to their compensation, power, influence and, yes, the job itself. 

As a coach, I pick up that the old-fashioned value of loyalty across most sectors has become an anachronism. The dominant meme is not to settle into the warm-bath feeling of "belonging." Capitalism is at a very raw phase in its history in developed nations.

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