What's with all the partner departures at
Latham this year? 😮
There's an interesting Law.com article (which you can access
here) arguing that
Latham is struggling with a lack of clear strategy. Essentially, over the last couple of years the firm has struggled in keeping up with the increased profit margins of rivals like Kirkland and
Skadden. The firm's equity partnership has actually shrunk over this period. Simultaneously, the firm's average partner compensation (so accounting for non-equity partner compensation figures as well) has also decreased.
Some commentators argue that this is in due to: (i) insufficient concentration on its core New York office, as the firm was slow to keep up with the superstar 20+ million compensation packages offered by its rivals to attract and retain top partners - which is particularly concerning since NY is by a distance the most profitable legal market in the world; and (ii) lack of a clear vision for its European offices, as the firm is neither focusing solely on the highly profitable PE/cap markets niche, nor is it fully committing to offering a Magic Circle-like full service offering. This could be a worst of both worlds scenario, as it puts the firm in a worst position both when pitching against its more focused US and UK rivals.
However, my personal opinion is that while these worries are sensible, they are also slightly exaggerated. A number of different leading partners at global firms and many commentators have argued this is a transformative period for the world of big law, which is naturally accompanied by an increased number high profile lateral hires. Simply because of its size, the firm is a natural target for rivals who look to poach top partners. To the point, Kirkland has arguably had a worse year in terms of partner departures, with over 20 partners (including Neel Sachdev, one of the architects of its growth) leaving for Paul, Weiss. Since some of the elite New York firms with historically smaller London offices have started looking to expand and are ready to invest significant sums, it is not at all unexpected for bigger players to suffer as a result.
Nonetheless, the lateral hiring wars are still ongoing and there is a lot of movement in between firms. Kirkland went on its own hiring spree after the Paul, Weiss raid and poached some star partners in a number of practice areas which had seen recent departures.
Sidley Austin, one of the firms which recently hit
Latham, was just a few days ago itself targeted by
Davis Polk and consequently lost the co heads of its European restructuring practice. The point is, things are quite fluid on the lateral hiring scene at the moment and the poaching firms often become poaching targets and vice versa. Personally, I would be surprised if
Latham will not seek to respond to the current headwinds in a manner similar to Kirkland's.
