Is Cravath good? Forum

[Sackboy]

All those people who picked Cravath over Debevoise in shambles now. Idenitcal PPP and now poor Cravath is no longer lockstep while Debevoise is. Feel free to DM me your addresses poor Cravath associates. Happy to send flowers to commemorate your mourning.

Other than delusional Cravath associates, this should have been no surprise to anyone. The firm's PPP numbers are now on the verge of dropping to roughly top 15 while Kirkland, Sidley, Freshfields, etc. are picking off the high earning partners with packages that probably blow away the top of the current Cravath compensation spectrum. If the firm had figured out how to keep PPP numbers at insane levels like WLRK, it could have kept the model without losing many folks, but their PPP is closer to Milbank than WLRK now.

[Anonymous User]

All those people who picked Cravath over Debevoise in shambles now. Idenitcal PPP and now poor Cravath is no longer lockstep while Debevoise is. Feel free to DM me your addresses poor Cravath associates. Happy to send flowers to commemorate your mourning.

Other than delusional Cravath associates, this should have been no surprise to anyone. The firm's PPP numbers are now on the verge of dropping to roughly top 15 while Kirkland, Sidley, Freshfields, etc. are picking off the high earning partners with packages that probably blow away the top of the current Cravath compensation spectrum. If the firm had figured out how to keep PPP numbers at insane levels like WLRK, it could have kept the model without losing many folks, but their PPP is closer to Milbank than WLRK now.

There's an obvious way to increase PPP--hire more associates and keep partner levels the same in order to increase profitability. But fundamentally it is difficult for Cravath to raise PPP that much even if its associates work a little more than DPW or whatever. WLRK has a different billing model and so isn't comparable.

[Anonymous User]

What are the implications of Debevoise and WLRK being the only two lockstep firms left (now that Cravath has decided to move away from that model)?

[Anonymous User]

What are the implications of Debevoise and WLRK being the only two lockstep firms left (now that Cravath has decided to move away from that model)?

Nothing other than Cravath stops getting its best partners poached.

[Sackboy]

There's an obvious way to increase PPP--hire more associates and keep partner levels the same in order to increase profitability. But fundamentally it is difficult for Cravath to raise PPP that much even if its associates work a little more than DPW or whatever. WLRK has a different billing model and so isn't comparable.

You can't really do that if you refuse to hire laterals (beyond a few specialist hires).

Re implications, the other poster is spot on. Cravath will keep its highest earning (lol @ "best") partners, but it might start to struggle to keep its very good tax or exec comp specialists, who make considerably more under a lockstep model than a EWYK. The T&E folks aren't going anywhere (other than maybe McDermott), as biglaw T&E is dead. I don't even know how Cravath sustains the practices they have.

[Anonymous User]

There's an obvious way to increase PPP--hire more associates and keep partner levels the same in order to increase profitability. But fundamentally it is difficult for Cravath to raise PPP that much even if its associates work a little more than DPW or whatever. WLRK has a different billing model and so isn't comparable.

You can't really do that if you refuse to hire laterals (beyond a few specialist hires).

Re implications, the other poster is spot on. Cravath will keep its highest earning (lol @ "best") partners, but it might start to struggle to keep its very good tax or exec comp specialists, who make considerably more under a lockstep model than a EWYK. The T&E folks aren't going anywhere (other than maybe McDermott), as biglaw T&E is dead. I don't even know how Cravath sustains the practices they have.

Yeah, even under lockstep, Cravath recently lost Kara Mungovan (tax partner). My guess is that the younger specialist partners will have much more incentive to leave after today.

[Anonymous User]

What are the implications of Debevoise and WLRK being the only two lockstep firms left (now that Cravath has decided to move away from that model)?

Nothing other than Cravath stops getting its best partners poached.

I wonder what’s next though. Non-equity tier? Lateral hiring? I feel like Cravath doesn’t want to hire laterals on a consistent basis because they don’t want to deal with keeping a lot of 8th year associates around and want puny partnership classes (though recent years have admittedly seen relatively big classes). If they are open to creating NSP roles, that would probably help them boost profits significantly and also incentivize them to hire more laterals who can graduate to a limbo position before equity, which will in turn increase revenue, etc., etc. But watch them deny reality on this front and be late to the game again lol.

[Anonymous User]

STB is still the PE king (though Kirkland is nipping at its heals)

huh? by what metric?

STB had the largest total M&A deal value for one, even ahead of Wachtell. KE rather thrives in the middle market.

And to the other previous poster, no way skadden goes above STB if your going to break it out like that. For corp WLRK is clear on top, most would put CSM/SC next and then if not already in that grouping STB/DPW/Skadden, followed by KE/LW and maybe PW.

[Anonymous User]

What are the implications of Debevoise and WLRK being the only two lockstep firms left (now that Cravath has decided to move away from that model)?

Nothing other than Cravath stops getting its best partners poached.

I wonder what’s next though. Non-equity tier? Lateral hiring? I feel like Cravath doesn’t want to hire laterals on a consistent basis because they don’t want to deal with keeping a lot of 8th year associates around and want puny partnership classes (though recent years have admittedly seen relatively big classes). If they are open to creating NSP roles, that would probably help them boost profits significantly and also incentivize them to hire more laterals who can graduate to a limbo position before equity, which will in turn increase revenue, etc., etc. But watch them deny reality on this front and be late to the game again lol.

Are they doing something a bit like that with their "Senior Attorney" designation? From what I can tell these are folks who often started at Cravath/a similar firm, have gone and done other things, and have now taken on an execution kind of role. Plus there are the practice group specialists who run deals but aren't and won't make partner - in exec comp, that kind of thing. Not sure about now, but a few years ago many of them were getting more than counsel at other V10 firms.

This is to say: this isn't about getting more bodies in (at least at senior associate/junior counsel level) - but about keeping high billers in corporate and litigation. Barshay, Jebejian, Davis, and recently Zoubek have gone to firms that Cravath wouldn't have regarded as peers ten years ago. That has to hurt. (S&C has avoided too many major defections by having a slush fund ready to raise the salaries of big billers who are about to defect, but clearly even that wasn't enough to keep Veeraraghavan away from Paul Weiss. I'd be interested in how Cravath's bonus pool looks.) Also query what this means for the pension system (and what the changes and laterals at STB have meant for pensions there). One of the ways Cravath and STB kept something close to lockstep for so long was with the promise of gold-plated pensions. I wonder if that's still the case in this messy new world.

[anymouseqwerty]

What are the implications of Debevoise and WLRK being the only two lockstep firms left (now that Cravath has decided to move away from that model)?

Nothing other than Cravath stops getting its best partners poached.

I wonder what’s next though. Non-equity tier? Lateral hiring? I feel like Cravath doesn’t want to hire laterals on a consistent basis because they don’t want to deal with keeping a lot of 8th year associates around and want puny partnership classes (though recent years have admittedly seen relatively big classes). If they are open to creating NSP roles, that would probably help them boost profits significantly and also incentivize them to hire more laterals who can graduate to a limbo position before equity, which will in turn increase revenue, etc., etc. But watch them deny reality on this front and be late to the game again lol.

I think you are right. Post-crisis, Cravath's revenue per lawyer and profits per partner have dropped out of the top 5 and into the top 10. It doesn't have to be like this. Wachtell and S&C have had a stranglehold on first and second place for revenue per lawyer for the last two decades. If Cravath's numbers do not improve they might have to take on associate laterals to continue being perceived as a king of the hill. Everyone is doing it. Wachtell took 17 associate laterals over this last year according to ALM legal compass. Skadden took 26 NYC associate laterals and Debevoise took 31 in NYC.

Firm desirability and reputation are likely overwhelmingly based on financial performance as opposed to lockstep/no associate laterals cultural considerations. Bringing on laterals doesn't seem to hurt chambers or vault rankings and it can certainly help the AmLaw financials. DPW reversed its financial crisis-era decline in PPP by ramping up leverage from 3:1 to 5:1 and taking on laterals. This year DPW brought on a massive 151 lateral associates to just the NYC office. Weil (143 NYC associate laterals), Kirkland (127 NYC associate laterals), and DPW are in a league of their own in shear numbers, although S&C (94) comes close in the percentage of joining lateral associates.

One other consideration: It's not guaranteed that Cravath holds onto more partners by eliminating lock-step. How many other firms eliminated lock-step and still lose partners? If anything, partner defection may increase due to greater social acceptability for leaving among the Cravath partners. So, sad to say, there may be more changes coming.

[Anonymous User]

This year DPW brought on a massive 151 lateral associates to just the NYC office.

Jesus what.

-DPW alum

[Ultramar vistas]

This year DPW brought on a massive 151 lateral associates to just the NYC office.

Jesus what.

-DPW alum

DPW’s attrition has been beyond insane during COVID. They had to go hard on the lateral market.

[Anonymous User]

I am at DPW and that does not sound right to me. Where do these numbers come from?

[anymouseqwerty]

The DPW and other lateral numbers came from the ALM legal compass lateral movement tracker. They list the names of each lateral and link to their firm bio, so it seems legit.

[Anonymous User]

What are the implications of Debevoise and WLRK being the only two lockstep firms left (now that Cravath has decided to move away from that model)?

Nothing other than Cravath stops getting its best partners poached.

I wonder what’s next though. Non-equity tier? Lateral hiring? I feel like Cravath doesn’t want to hire laterals on a consistent basis because they don’t want to deal with keeping a lot of 8th year associates around and want puny partnership classes (though recent years have admittedly seen relatively big classes). If they are open to creating NSP roles, that would probably help them boost profits significantly and also incentivize them to hire more laterals who can graduate to a limbo position before equity, which will in turn increase revenue, etc., etc. But watch them deny reality on this front and be late to the game again lol.

I think you are right. Post-crisis, Cravath's revenue per lawyer and profits per partner have dropped out of the top 5 and into the top 10. It doesn't have to be like this. Wachtell and S&C have had a stranglehold on first and second place for revenue per lawyer for the last two decades. If Cravath's numbers do not improve they might have to take on associate laterals to continue being perceived as a king of the hill. Everyone is doing it. Wachtell took 17 associate laterals over this last year according to ALM legal compass. Skadden took 26 NYC associate laterals and Debevoise took 31 in NYC.

Firm desirability and reputation are likely overwhelmingly based on financial performance as opposed to lockstep/no associate laterals cultural considerations. Bringing on laterals doesn't seem to hurt chambers or vault rankings and it can certainly help the AmLaw financials. DPW reversed its financial crisis-era decline in PPP by ramping up leverage from 3:1 to 5:1 and taking on laterals. This year DPW brought on a massive 151 lateral associates to just the NYC office. Weil (143 NYC associate laterals), Kirkland (127 NYC associate laterals), and DPW are in a league of their own in shear numbers, although S&C (94) comes close in the percentage of joining lateral associates.

One other consideration: It's not guaranteed that Cravath holds onto more partners by eliminating lock-step. How many other firms eliminated lock-step and still lose partners? If anything, partner defection may increase due to greater social acceptability for leaving among the Cravath partners. So, sad to say, there may be more changes coming.

These numbers seem off.

[anymouseqwerty]

Well, shit. I just double-checked the DPW ALM lateral list using LinkedIn and the numbers ARE off.

Checked about eight DPW "lateral" names on LinkedIn and three of those summered at DPW and one was a 3L hire. ALM probably automates the joiners name list using website data and there must be some glitch. Cravath had three joiners listed, so at least that seems accurate. The departing numbers are probably accurate because if someone disappears from the website that would mean they are gone. But, I guess the system has a hard time understanding who is a lateral v. a summer associate for certain firm websites.

Thanks for the heads-up folks. I guess the only way to really get real lateral numbers is to go name by name on the internet, and that's just not worth it.

[Anonymous User]

Well, shit. I just double-checked the DPW ALM lateral list using LinkedIn and the numbers ARE off.

Checked about eight DPW "lateral" names on LinkedIn and three of those summered at DPW and one was a 3L hire. ALM probably automates the joiners name list using website data and there must be some glitch. Cravath had three joiners listed, so at least that seems accurate. The departing numbers are probably accurate because if someone disappears from the website that would mean they are gone. But, I guess the system has a hard time understanding who is a lateral v. a summer associate for certain firm websites.

Thanks for the heads-up folks. I guess the only way to really get real lateral numbers is to go name by name on the internet, and that's just not worth it.

N.b. if the ALM tracker is (as you surmise) based on website-monitoring software — DPW completely overhauled its website, including bio pages, in June. Mainly cosmetic, I think, but perhaps enough structural things changed that it threw off the ALM tracker.

[Anonymous User]

There are lots of firms that do particular things better than Cravath does them, and a number of firms that make more money than Cravath. For example, plenty of peers have better appellate litigators or finance groups or patent prosecution experts or international arbitration specialists or tax and estate planning. And many other V20s and boutiques are now more lucrative (on either an RPL or overall PPP basis).

However, few firms are as consistently strong in everything they do as Cravath. Cravath is at least fairly highly regarded in capital markets, commercial litigation, exec comp, tax, ect., and superlative in areas like public M&A.

For 2Ls who “strive for excellence” (for better or worse) and are comfortable with a high intensity environment but do not have a grasp of what kind of law they want to practice, one could do worse than Cravath. The firm offers a platform to try a couple different practices, each at an elite level, and then lateral as a mid level to a firm that specializes or has partners with particular strengths in the chosen field (or to go in house to a bank or blue chip client). I’m not suggesting you can’t do the same thing from S&C (you can), only that Cravath has some staying power in this industry because of these features, which appeal to certain types of law students who are more focused on generalist professionalism and pedigree than the substance of what they are actually working on (or achieving work / life balance).

[Anonymous User]

There are lots of firms that do particular things better than Cravath does them, and a number of firms that make more money than Cravath. For example, plenty of peers have better appellate litigators or finance groups or patent prosecution experts or international arbitration specialists or tax and estate planning. And many other V20s and boutiques are now more lucrative (on either an RPL or overall PPP basis).

However, few firms are as consistently strong in everything they do as Cravath. Cravath is at least fairly highly regarded in capital markets, commercial litigation, exec comp, tax, ect., and superlative in areas like public M&A.

For 2Ls who “strive for excellence” (for better or worse) and are comfortable with a high intensity environment but do not have a grasp of what kind of law they want to practice, one could do worse than Cravath. The firm offers a platform to try a couple different practices, each at an elite level, and then lateral as a mid level to a firm that specializes or has partners with particular strengths in the chosen field (or to go in house to a bank or blue chip client). I’m not suggesting you can’t do the same thing from S&C (you can), only that Cravath has some staying power in this industry because of these features, which appeal to certain types of law students who are more focused on generalist professionalism and pedigree than the substance of what they are actually working on (or achieving work / life balance).

I don't work at Cravath, but it’s people who make our firm. Whatever your background, whether you think differently, laterally, logically or practically, we look for talented people, driven by excellence. As a firm we believe collaboration makes us stronger, and so we want team players too. All we ask is that you share the values that make us Cravath, wherever we are in the world: respecting and being open with each other, supporting one another, and being positive role models. We’re international but very much one firm. We share our expertise to ensure the best outcome for our clients. We’re connected globally, working in cross-border, cross-functional teams, giving you the chance to experience new cultures, places and ideas.

At Cravath, we value difference and it’s our diversity that powers us. We’re absolutely committed to building an inclusive environment where everyone achieves their potential. We want everyone to feel they can belong, engage and excel. We still have more to do, and we work closely with external partners to support our goals. We’ve a wide range of initiatives and objectives across disability, gender, LGBTQ+, mental health and wellbeing, race and ethnicity, and social mobility. We’re proud of our extensive pro bono work too, because we believe everyone deserves justice and opportunity. Wherever you work, you’ll have the chance to get involved.

Challenge. At Cravath, we thrive on it. Challenging ideas, challenging you, challenging ourselves. We want you to be a part of our journey. Don’t think, “I’ll do it tomorrow”. Do it today. Challenge today.

[Joachim2017]

There are lots of firms that do particular things better than Cravath does them, and a number of firms that make more money than Cravath. For example, plenty of peers have better appellate litigators or finance groups or patent prosecution experts or international arbitration specialists or tax and estate planning. And many other V20s and boutiques are now more lucrative (on either an RPL or overall PPP basis).

However, few firms are as consistently strong in everything they do as Cravath. Cravath is at least fairly highly regarded in capital markets, commercial litigation, exec comp, tax, ect., and superlative in areas like public M&A.

For 2Ls who “strive for excellence” (for better or worse) and are comfortable with a high intensity environment but do not have a grasp of what kind of law they want to practice, one could do worse than Cravath. The firm offers a platform to try a couple different practices, each at an elite level, and then lateral as a mid level to a firm that specializes or has partners with particular strengths in the chosen field (or to go in house to a bank or blue chip client). I’m not suggesting you can’t do the same thing from S&C (you can), only that Cravath has some staying power in this industry because of these features, which appeal to certain types of law students who are more focused on generalist professionalism and pedigree than the substance of what they are actually working on (or achieving work / life balance).

This is wrong or misleading in some important respects. Among peers, Cravath is much LESS willing to let juniors try out different types of work if they "do not have a grasp of what kind of law they want to practice" because of how the rotation system works. You get locked in with a partner group for a significant amount of time. Relative to peers, it's much more restrictive and constrictive (and, arguably, outdated).

Also, the whole "one could do worse" claim is damning with faint praise. I mean yeah, you could go to a mid-market firm and struggle to get market bonus. If that's your comparison class, you're in bad shape.

Other firms have just as much "staying power" while treating juniors as adults, letting them have more control over their work, and paying them commensurate to their actual work.

The Cravath brand had power and prestige a few decades ago. It's been steadily eroding, and it's now no more distinguished than a handful of firms across the market.

[Anonymous User]

Jennifer Conway (Exec Comp) leaves for DPW. Cue more partner departures??

[Anonymous User]

I know it’s not remotely going to happen, and I would genuinely feel bad for associates there, but some small part of me would be amused to see Cravath just abruptly collapse à la Dewey & LeBoeuf. Just given the self-seriousness of the partnership and their whole brand image.

[Anonymous User]

Jennifer Conway (Exec Comp) leaves for DPW. Cue more partner departures??

At cravath. Found this surprising given that Conway was the second most senior exec comp partner. If this has anything to do with changing the comp structure, I would guess that at least the specialist groups will lose more partners.

[Anonymous User]

Jennifer Conway (Exec Comp) leaves for DPW. Cue more partner departures??

At cravath. Found this surprising given that Conway was the second most senior exec comp partner. If this has anything to do with changing the comp structure, I would guess that at least the specialist groups will lose more partners.

Not surprised that specialist partners would leave after the lockstep change, but agree with you that it's a bit surprising that Conway is leaving, since she's been here for so long. Would have expected Bobby or Katz to leave before her. And my guess is it's definitely related to comp. The partnership probably did some calculations and Conway got a glimpse of what her partnership draw is going to look like next year and decided to jump ship. There were some rumors that Kara Mungovan jumped to Davis Polk back in November because she had insight into the ultimate move away from pure lockstep and knew her comp would go down. So much for the firm anointing partners who aren't "motivated purely by money."

[Sackboy]

How is this surprising? CSM's new change is going to hurt senior specialist partners the most, because they're the ones with the most time in under the seniority-only system. Junior folks are just going to have their comp start/adjusted to what exec comp junior folks at other modified lockstep firms make, which is probably not terribly much different than early career earnings under CSM's old seniority-only model. Meanwhile, someone like Conway is going to have 13 years of senior credit massively devalued and could have been looking at a 25-33% loss in comp, which could be a high six figure or even a seven figure sum.