Paul Weiss - Moving into M&A Big Time through Risk-Taking

 What differentiates law firm Paul Weiss from other players in M&A practices? During the past decade it has moved into the 5th place in the Bloomberg Law League Tables. Last year it handled $261 billion in deals. That mean it pulled ahead of Cravath, Wachtell and Simpson. 

Those watching Paul Weiss since Brad Karp became chair in 2008 cite factors such as acquiring Apollo as a client that year and in 2016 poaching the major brandname in M&A Scott Barshay. Of course, those developments have been important. 

But, there's also something else. And in a Bloomberg Law interview Michelle Fivel fingers it. She is a partner in search firm Hatch Henderson Fivel:

"[Paul Weiss is] not afraid of making big investments and big plays. It’s clearly paid off for them, as far as deal flow is concerned.”

More recently some of those big plays include pricey poaching of stars from Kirkland & Ellis to create a presence in the London legal market. Paul Weiss is also experimenting with the non-equity partner (NEP) tier. 

Research proves out how the mindset of risk-taking is a platform for building success in new business development. That circles back to the study on decision-making by psychologists Daniel Kahneman and Amos Tversky in 1979. Called "Prospect Theory" (or risk aversion theory), it found that humans tend to be predisposed to overestimate risk and underestimate possible reward. Therefore, there would be the preference to avoid loss rather than take a risk to achieve a lucrative goal. They are frozen in inaction.

For example, the law firm partners assume pitching to a current client for added business would alienate, so they don't focus on that opportunity. Recently, BTI Consulting resurrected that Prospect Theory research to discuss how the legal sector should transcend risk aversion to boost rainmaking results.

From the get-go in his leadership back in 2008 Karp has been a risk-taker. In the Law, Disrupted interview with John Quinn Karp recounts how he transformed the firm being primarily in Wall Street litigation to one which also became known for its transactional practices. He mitigated that risk by starting out with a handful of high-demand practices. 

In intuitive coaching during these chaotic times I warn clients that not taking a risk can be more a risk than the assumption that they should play it safe. In O'Dwyer Public Relations I published an article on how to break the rules. 

As an intuitive career coach/tarot reader I uncover the opportunities/obstacles in your earning power that others miss. Free confidential consultation. If we work together, fees are custom-made for your budget. For an appointment: contact Jane Genova (text/phone 203-468-8579, janegenova374@gmail.com). In-person and remote.