Having worked with US Law Firms for nine years I am often asked about the role of remuneration in determining a Lawyers decision to move firm. It is often assumed that the higher levels of compensation on offer at US Firms is the primary attraction for prospective candidates and consequently the reason why, in a period when many US firms have enjoyed unprecedented levels of growth, they have been so successful at hiring some of the markets most talented Lawyers.
Whilst money is certainly important, I have often wondered what specific role remuneration really plays when a Lawyer is considering a potential move to a US Firm. Is remuneration a primary motivator or a subsidiary attraction? Is the ‘cash’ narrative credible or merely a clumsy expedient used by recruiters when trying to sell these firms? Or is it a convenient excuse on the part of those firms losing lawyers to divert attention from some of their other more fundamental shortcomings?
Certainly the disparity in remuneration between US Firms and UK Firms has been a powerful factor behind the flow of candidates in recent years. However if money is the primary motivator why is it that some of the lower paying US Firms are as successful (if not more so) than some of the highest paying US Firms when it comes to attracting talent? I often see candidates reject higher paying offers for lower paying ones, and regularly see candidates walk away from sizeable amounts of money in search of ‘something else’.
When I sit down with candidates I rarely find myself being grilled on the nuances within the ‘Cravath’ scale, the exchange rate that US Firm X uses vs US Firm Y, or even the bonus structure at any these firms. This isn’t the behaviour of a generation of Lawyers solely focused on their future bank balance. Instead, I tend to find that most candidates are more interested in learning about the below;
- Responsibility levels – US Firms are well known for running lean deal teams. This means associates are often afforded higher levels of responsibility on deals than many of their peers at other types of firm. Candidates I speak to therefore want to know, if they were to join a US Firm, how their role might compare with their current firm, and how increased exposure on transactions can help them develop their technical skills faster as well as levels of direct client contact. When going through a CV with a candidate I often ask them to point out which deal they most enjoyed working on and am often struck by how often candidates from larger more traditional UK firms don’t pick the ‘headline’ grabbing deals on their CV, but instead gravitate towards the smaller less ‘stand out’ deals. This is because the headline grabbing deals are often staffed in ways where associates feel removed from the process, and it’s frequently only on the smaller deals where they might be given scope to push themselves and ‘run the process’. As such these candidates ask me if they can replicate the high levels of responsibility they enjoyed on the smaller deals but apply that at a US Firm on the bigger deals. The answer in the majority of cases is yes. For a junior corporate lawyer this could mean transitioning away from a role primarily focused on DD and NDA’s towards a role with increased exposure to high level documents such as the SPA.
- Quality of work – US Firms are increasingly beginning to dominate certain practice areas. If you are a Lawyer looking to progress your career within a certain field US Firms can offer you better (or at the very least equivalent) quality of work than many of the larger more traditional firms. In transactional areas like Private Equity, Funds, Leveraged Finance, Capital Markets and Restructuring US Firms have invested heavily in recent years and now effectively operate some of the best known teams in London. In contentious areas like Arbitration and White Collar Crime US Firms have also done well and can offer ambitious candidates an alternative career path. One of the reasons for this success is the nature of the client base and how this overlaps with the US market. PE houses, Funds and global Investment Banks want to instruct firms who can offer expertise across borders and multiple markets. Whilst many traditional UK Firms are international in scope they have not been able (despite many attempts) to replicate their UK/Asian/European success in the US. As such US Firms are uniquely positioned to offer clients a layer of service which other firms simply can’t provide. This may in turn also partly explain why in recent years many of London’s leading practitioners in each of the areas listed above now resides at a US Firm. In Private Equity 20 (of the 30) ranked leading individuals are at US Firms having previously practiced at Magic/Silver Circle/Top UK Firms. This is not to say US Firms ubiquitously offer superior quality work to traditional London law firms. You could for example argue that US Firms still have some way to go in areas like Public M&A, Energy, Real Estate and Commercial Litigation. The key point is that in certain practice areas US Firms have done very well and will continue to do so, and much of this success will increasingly be at the expense of more traditional UK firms. To illustrate this you could consider which firms a junior Funds associate would want to consider if they were singularly focused on quality of work. It is becoming increasingly hard to steer that candidate in other direction than Kirkland & Ellis, Simpson Thacher, Proskauer, Weil Gotshal or Goodwin.
- Progression – US Firms have less of a ‘glass ceiling’ compared to many of their UK peers. Whilst partnership is hard at any firm (UK and US) the benefits of a US Firm often reside in the momentum behind their expansion and the meritocratic nature of their culture. Naturally, a lot will vary from firm to firm as there are some US Firms with truly abysmal records of internal promotion and some with excellent records of internal promotion. However, if you are a senior associate joining a firm as they expand in a certain practice area you are undoubtedly well positioned to capitalise on that growth longer term (as many mid/senior associates already have). There is also increasing evidence that the ‘branding’ of some of these firms on a CV can position a Lawyer for partnership at various UK firms longer term. In the last 18 months, the market has seen numerous instances of senior associates/counsels moving from prestigious US Firms into UK firms as partners.
If you would like to discuss any of the above, or US Firms in general, please don’t hesitate to contact Jamesberry@taylorroot.com