Legal industry news, trends and reflections (August - October 2024)
Commercial Law Academy
Comprehensive e-learning platform for aspiring commercial lawyers
As well as our monthly LinkedIn newsletter dedicated to summarising a few topical legal current affairs each month, we're now also publishing regular reflections on legal industry news and developments (via this same newsletter, as well as our free blog).
These reflections are offered by Luke Mitchinson, who worked for years as a transactional lawyer at both a Magic Circle and an elite US law firm, before leaving to work as a headhunter. He now helps lawyers from NQs through to partners secure roles at a broad range of commercial law firms, via ARMA Search.
As a thanks for Luke's time, I would really appreciate it if you could follow the LinkedIn page for Luke's brand new recruitment firm.
Today's newsletter covers Latham & Watkins, non-equity partnerships, Manchester City, Sidley Austin, time to partnership, and more.
But first...
1. Pretty please... I'll give you a £5 voucher
We would hugely appreciate you taking 3-4 minutes of your time to fill out a very short survey about Commercial Law Academy. Your insights will help us to understand what's working well, and what else we could do to improve your experience.
Anyone who fills this out before the deadline will instantly receive a £5 voucher for our handbooks.
2. Brand new webinar format - legal industry trends
YOU ASKED, AND WE'VE DELIVERED
This will be the first webinar we've ever hosted focusing on topical legal industry news, trends and developments.
This event will be hosted by ex-Magic Circle lawyers Jake Schogger and Luke Mitchinson.
We'll be looking at the Magic Circle, Paul Weiss, pay rises, partnership trends, practice area trends, and more!
Legal industry news, trends and reflections from August - November 2024
Please note that these articles do not constitute legal advice and should not be relied upon. They simply reflect the author's research and opinion.
Over to you Luke...
Is Latham & Watkins ok?
October 2024
Latham have now lost seven Finance Partners in the past three months - five of whom headed to Sidley Austin (with the other two heading to Milbank). Clickbait titles aside, this is a big issue for Latham.
The concern won't just be the millions and millions of revenue and key clients walking out the door, but it's also who these partners are leaving Bishopsgate for i.e. some of its biggest competitors. More concerning too with the latest two exits to Sidley (debt capital markets partners Scott Colwell and Patrick Kwak) is that this marks a reunion of Latham's former joint LevFin & DCM & HY finance offering with Colwell and Kwak set to work reunite with, in particular, Jayanthi Sadanandan (the former head of Latham’s London office) and Sam Hamilton Sadanandan on the LevFin side of things - offering a joint offering to their (and Sidley's) clients.
11 Finance Partners Exit in Two Years
Let's also not forget this 'follows' the four partner leveraged finance team move from Latham to Paul Hastings two summers ago - so doing a quick bit of maths, that makes 11 finance partners that Latham have lost in c.two years... and all the exits were split between its Lender side practice and its Sponsor side practice - plus now its DCM and HY practice. So again I'll ask, are Latham - or should I say, is Latham's finance practice, OK?
The positive news for Latham is that it's Lender side practice that walked out to Paul Hastings was replaced by the Cahill team hire - so they plugged the hole there. However, its Sponsor side practice remains depleted (albeit with a couple of more junior partners remaining - which could be a huge opportunity for them just FYI), as well as its DCM & HY offering.
However - and to start to answer my own question - yes, I think Latham are just fine. Latham aren't going to struggle to attract top tier talent are they? They right at the top of the legal food chain, and have the fire power, brand, and clients to woo almost anyone they like. Latham, like many of the top outfits out there are just taking their turn on the 'exit-side' of the Partner Merry-Go-Round, opposed to the 'entrance side' that they're used to being on. Would it surprise anyone if over the next little while Latham announce a waive of Partners / team-hires into its finance team? Nope.
🎠 The London Partner Merry-Go-Round 🎠
10 years ago the Magic Circle were essentially the top dogs in any area. STB didn't have an R&I team three years ago. Two years ago Latham had one of the strongest Finance practices going. A year ago Paul Weiss were all but a satellite office who almost exclusively hired US associates in London (and now offer training contracts). And seven months ago we saw the completion of a Magic Circle and Wall St firm merger.
As an ex-Magic Circle and US firm lawyer turned headhunter, the amount (and the speed) of change I've witnessed over the past few years has been extraordinary - especially in a typically 'slow to adapt' industry. Do I think things are going to slow down? Nope. There are a finite amount of top Partners / teams in the market, and when one (or several) move, those firms left dealing with the aftermath of an exit, will need to refill and replenish ASAP. Which results in... you guessed it... another spin on the Partner Merry-Go-Round.
So as always, watch this space!
Is non-equity partnership a bad thing?
October 2024
In truth, I struggled how to start this article because I couldn’t decide in my mind if the majority of lawyers out there still think that full equity partnerships are more common than they actually are – spoiler alert, they are VERY rare and getting even rarer.
With Cleary’s move into the NEP game, by my count there are now less than 10 firms globally in ‘Big Law’ that remain a full equity partnership. And my bet is that this number is much smaller than a lot of you probably thought - in particular for those of you who are associates in the remaining 10 firms.
Given the overwhelming majority of firms now have (at least) a two-tier partnership – I say at least because arguably some firms have three tiers if you count ‘super equity’ – is it finally time to say that the ‘stigma’ of ‘just’ being a non-equity partner is being eroded before our eyes?
Recommended by LinkedIn
Now, when we all typically think of a NEP, one firm comes to mind doesn’t it… but what about A&O, Latham, Simpson, Travers, Milbank… the list goes on and on and on… Is there an inherent issue or problem with being promoted to partner if you’re not immediately given equity? If your firm said you could be promoted to partner tomorrow, but we can’t give you equity, my guess is that you’d still snap that hand off! Which is the exact scenario for associates at the above firms and nearly all other firms.
The truth is, in today’s world of Big Law, getting promoted to partner is taking longer and longer. All-equity firms in particular are very aware of this and the associated frustrations and retention problems that come with ‘waiting too long’ to get promoted. So these firms got on the front foot and created a tier of partnership that you can get promoted into faster – how terrible of them! And yes, if at the same time this also leaves additional equity points for the rainmakers in the firm, which in turn keeps them there, then can you really blame them?!
I’m sure there will be some out there who can’t stand the thought of not being an equity partner right away (no judgement here) – I wonder though if these same associates also can’t stand the thought of their peers becoming partners 5,6,7 years earlier than them at other top firms?
Manchester City v the Premier League
October 2024
I don't think I would have ever expected to share a Paddy Power instagram post onto my LinkedIn, but this is too good not to! As always, absolutely genius from their social media team on the first day of Man City's hearing regarding 115 charges for alleged breaches of the Premier League's financial rules.
From Latham to Sidley...
September 2024
😵 A tough old day for Latham last week thanks to Sidley & Milbank 😵
Five leveraged finance partners from Latham exited the firm for Sidley, shortly after the news of a separate finance team move was announced from Latham to Milbank.
This 'follows' the four partner leveraged finance team move from Latham to Paul Hastings two summers ago. The exit two summers ago saw the near loss of Latham's lender side practice (which was recently replaced with the Cahill team hire), but yesterdays move sees the exit of the majority of Latham's sponsor side practice (albeit with a couple of more junior partners remaining).
Now I know typically with these posts you've all come to expect me to reference the monster packages these Partners / teams have moved for, but this time I'm going for a slightly different angle; the 'Partner Merry-Go-Round'.
Between these moves, and the countless other team moves we've already seen in 2024 (and recent years of course), not least of all Paul Weiss snapping up some of London's biggest rainmakers (on reportedly $20m/year packages - sorry I couldn't help myself!), creating a serious player in the London market almost overnight, I think makes for a really interesting scenario in London; an ever-changing landscape of what firm has the best team (or a team for that matter) for any given discipline.
10 years ago the Magic Circle were essentially the top dogs in any area. STB didn't have an R&I team three years ago. Two years ago Latham had one of the strongest Finance practices going. A year ago Paul Weiss were all but a satellite office who almost exclusively hired US associates in London (and now offer training contracts). And five months ago we saw the completion of a Magic Circle and Wall St firm merger.
As an ex-Magic Circle and US firm lawyer turned headhunter, the amount (and the speed) of change I've witnessed over the past few years has been extraordinary - especially in a typically 'slow to adapt' industry. Do I think things are going to slow down? Nope.
There are a finite amount of top Partners / teams in the market, and when one (or several) move, those firms left dealing with the aftermath of an exit, will surely need to refill and replenish ASAP.
Which results in... you guessed it... another spin on the Partner Merry-Go-Round
How long does it take to become a law firm partner?
August 2024
👀 PARTNERSHIP POLL RESULTS 👀
Last week I asked you all how long, at your current firm, does it take to make Partner? The options were less than 7 years, 7-9 years, 9-11 years, and 11 years plus.
1. Gender Disparity
76% of you said it would take 9-11 years plus to make Partner - with the biggest group (40%), saying it would take 11 years or more.
What I found interesting here was that people from the same firm, and often in the same team had different expectations when it came to their promotion, and in particular, female respondents (associates and Partners to be clear), felt it would take them longer compared to their male colleagues' view.
2. Team Disparity
There were clear differences in responses based on team/practice area. In other words, those in the traditional transactional teams Vs contentious teams, believe that their Promotion would come sooner.
3. Basis of Decision.
The difference in responses from those at the same firm, were in some cases, at opposite ends of the spectrum i.e. some believe it takes less than 7 years while others in the same firm believe it would take at least 11 years. Factor in the gender split from (1) and the team split from (2) above, leads me to query what these answers were based on? Track record of promotions? Gaps in the seniority? Perceived favouritism / 'shoulder taps'? Gut feeling? If Mercury is in retrograde? Something I'd like to dive a little deeper into.
The flip side to all of this disparity however is that, at all firms, the 'time' to get made up is clearly not set in stone, and for the right associate, at the right time, in the right team, promotion could be extremely quick by modern standards. And it's perhaps exactly this which keeps so many going at the end of the day... who said lawyers weren't optimistic!?
Results:
If you want to access more regular reflections such as these:
As a reminder, Commercial Law Academy offers 23 in-depth courses, covering: insights into legal careers, firm profiles and interview insights, expert advice on writing applications and tackling psychometric tests, dozens of example (verified) successful cover letters and applications, resources to help you prepare for interviews and internships, example interview case studies, M&A and private equity, practical content to help you understand and confidently discuss commercial concepts and current affairs, plus tips on how to network, negotiate, deliver presentations and write professionally. Check out this animated explainer video for more information.