Anonymous User wrote: ↑Tue May 02, 2023 11:19 pm
Anonymous User wrote: ↑Tue May 02, 2023 1:32 pm
Austin Witt is another departure. Right after he started the special sits group, too.
I agree that the firm appears to be doing fine financially. Lots of big public deals recently, and I'm sure their private equity base is/continues to be fine (though they're probably more impacted with the rate hikes and going on). Fortunately, they have a strong distressed team that is more than able to take on any resulting restructuring work.
HOWEVER, on the "culture" / environment front (and please note that is is for corporate), I think there are a few things that are impacting the firm:
1 - Barshay vs. Schumer: Barshay joined in ~2016 and took over as corporate chair in ~2020. Excellent lawyer, with a book of business that may well be unparalleled. However, he's just generally not the most pleasant of people. I haven't directly worked with him, but I have yet to hear someone (from either Cravath or PW) that speaks well of him personally. Schumer, on the other hand, was a very likable and pleasant chair. Given culture comes from the top (and that Barshay has an especially heavy style of leadership), I can imagine it permeates down the chain. If anyone has specific Barshay stories, feel free to weigh in.
2 - "Kirklandization": I understand that partner compensation has moved from modified lockstep to essentially modified eat-what-you-kill. This ties in with what one of the posters above mentioned re: allocation of shares. I imagine this modification especially affects senior partners, who helped build their groups/the firm, but may not be as active in business development these days. Note that part of the reason Barshay (and other big rainmakers) left Cravath is because of the strict lockstep system, and how it was "unfair" to the partners in their ~40s.
Similarly, PW introduced a bonus multiplier/add-on for a couple years. Imagine this was intended to stem the tide of departures, but the roll-out wasn't as smooth as it could've been. They announced it late in the year (and made it retroactive) without clear guidelines (though associates were able to figure out the hours-based requirements by talking amongst themselves). PW has historically been a "we all get paid the same amount and row in the same direction" kind of place, for better or worse, so I know this fly-by-night change irked a number of people (including partners and associates who got the multiplier!).
3 - Culture Change: this is a catch-all for anything not captured above, but it's an effect of 1 and 2. PW used to be a pleasant place to work. Everyone in corporate knew one another, worked hard, etc. In the last couple years, it's became a "bill bill bill" kind of place, but hiding behind the veneer of the older days. As a result, most of the associate departures were either to places like Cooley/Gunderson (which were, for true reasons or not, known to have better cultures) or Kirkland (where if you were going to work that hard, you might as well get the big lateral signing bonus).
Long and short of it, the firm is doing well and printing money. There are rifts in the culture as of recent years, mostly felt by the associates but also affecting (some) partners. Whether that leads to a mass exodus or decreased revenue/PPP, we'll see. But certainly something in the water - and as the history of law firms has taught us, small things can avalanche.
Posts like these are why I like TLS. One question - are you saying the bill bill bill culture will lead to an avalanche because you’ve seen the bill bill culture collapse other firms? I haven’t heard of this, seemed like most demises come from being too relaxed, so I’m curious your take.
Great question, and one I didn't articulate well. I have a few thoughts on this generally - this may all seem a bit scattered, so bear with me.
1 - Kirklandization - this model of hiring young rainmakers into a competitive EWYK culture, all predicated on being the richest and most profitable firm is a fairly new development at Kirkland. Let's say, the last 10-15 years or so. I graduated law school around 2015, and it was still known as a rising star than one of the hyperelites for corporate/transactional. It was more known as a Chicago firm, especially renowned for its litigation prowess.
I say that to stress the relative recency of this model. Certainly, other firms have tried before (like Dewey) and lateral poaching isn't new. And Kirkland has put some smart twists on their recruiting (shorter timeframes for guarantees, re-assessing shares more frequently (every other year, I believe), etc.). But we have yet to see the long(er)-term viability/consequences of the "build a firm of mercenaries" approach. Perhaps it's smooth sailing, it's simply the new reality of law firm life, and in 10 years, there's only one law firm across America: Kirkland. Perhaps, like other firms that grew rapidly, it has its failures. TBD.
2 - Relating to the above, there's a delta between the "old" PW and the "new" PW. A poster above referred to "growing pains", which I think is the case. Perhaps there's nothing wrong with the Kirkland model, but as it's being implemented at PW, we're seeing departures from partners who preferred the older culture. If there's an exact even exchange of departures and arrivals, then obviously shouldn't be a problem. But if there continues to be departures without getting fresh blood, could be a problem.
3 - Speaking of that delta, "culture" is an interesting thing to navigate. I don't profess to have a degree in organization psychology or even an MBA, so bear with me. But I think trying to be a little bit of everything is often a road to failure (and, life advice, I think that's true for people on an individual scale!). I think if PW wants to be Kirkland, it should lean more strongly into it. I think they're hiding behind the veneer of the more "genteel" pre-pandemic/pre-Barshay days right now, which is disingenous and doesn't work. Figure out what you want to be, and lean into it.
And this relates to the departures, both associates and partners. Certain partners (who, to be clear, are fantastic lawyers, done their share of business development, and have serviced clients well) want to focus on lawyering and getting their fair compensation. Some of them have left to go to firms that have more lockstep cultures. Others figure, that if it's solely about money, then go to whoever is the highest bidder. Again, PW seems to kind of be in no man's land between those extremes.
Associates feel kind of similarly. PW used to be a fantastic place, where people worked hard but weren't getting killed, knew they'd get compensated fairly without politicking, and generally enjoyed the work environment. It was a place that was a little bit more "holistic" in how they viewed/treated associates (though there was always an emphasis on billing a lot!). It was a good hybrid of great culture and great work. The culture changes are certainly apparent, so that leaves great work. And one of the responses above that talks about all the great deals PW has seems to be proving my point - the focus is solely on the work these days. Associates used to very rarely leave PW Corp to lateral to another NY BigLaw firm. Folks left to get promotions at other firms, certainly, but lateral moves weren't that common. That obviously changed and only really in the last 3 years.
So people who wanted great culture are going elsewhere to try to find it (to the extent it exists). You can find great work at any of the V25 (and below) - so, again, if it's only about money, then go out to the market and find the highest bidder.
4 - There was a thread on Kirkland the other day that made an interesting point. The executive committee there are all laterals from other firms who came to Kirkland, motivated primarily (or entirely) by the money. So that mindset is going to permeate throughout the firm. PW Corporate is in a similar place - it's now headed up by a guy who was mostly motivated to leave Cravath because he didn't like the pure lockstep model.
I'm not trying to debate the merits of lockstep or EWYK. And certainly, we all want to make money. But it's not the singular most important thing for a lot of partners, but they can become the silent majority.
Kirklandization at PW Corp may also be tough, because of its dedication to Apollo. Kirkland has a much varied base of clients, so they're not reliant on keeping one specific client happy. PW needs to keep Apollo happy (and certainly get compensated accordingly for doing so). But I think that relationship puts a hamper on the possibility of the PE growth that the firm can do. Perhaps not - STB has KKR and Blackstone, and also does lender-side work. But if PW can't figure it out, then there becomes a limit on the war chest that PW can build to attract the lateral elites (especially as they continue to have partner departures).
Conclusion - if I knew how to run a law firm (or even just a business), I wouldn't be posting on TLS, so take this all with a grain of salt. Growing pains is perhaps the way to sum it all up. PW is changing very, very quickly. Maybe they'll stick the landing, maybe they won't.
Contrary to the general view on TLS, I think there are great firms out there that are also pleasant places to work. LW is one that comes to mind (and, incidentally, a place where a few PW laterals have headed). I think that once you become like Kirkland and singularly focus on making as much money as you can for the equity partners, it can become a race to the bottom - you lose culture, you lose associates, you lose partners.
