January 1, 2010 Article Brion Bickerton
Major, Lindsey & Africa has attempted to catalogue Boston lateral partner movement in 2009. MLA calculates that nearly 90-100 partners moved out of or into the top 20 Boston law firms and out-of-state Boston branch offices during this period. An analysis of the lateral partner activity for 2009 indicates that while the economic crises starting in late 2008 prompted a number of partner moves, many more changes were the result of factors that have been historically at play.
In instances where lateral partner activity seemed clearly linked to the economic crisis, two factors were at play. The most dramatic impact occurred where firms shut down their doors. Nationally, such firms as Heller Ehrman, Thelen and Thacher Profitt dissolved sending hundreds of partners onto the street. Boston was spared any such calamity with one exception; the fifteen lawyer Boston office of Philadelphia-based Wolf Block was upended when Wolf Block dissolved in early 2009.
The greater impact of the economic downturn on lateral partner activity in Boston in 2009 resulted from partners being squeezed out of their firms because of diminished individual practices. To be sure, this phenomenon was not limited to the Boston market but was national and international in scope. Magic Circle firms and many AmLaw Top 100 law firms sought to maintain partner profitability numbers by reducing partner ranks. The other impact of the downturn doesn’t show up in the lateral partner moves. Firms were cautious in taking on new lateral partners as a result of being more risk adverse. In part, this was a reflection of financial caution in investing in new partners whose portable books of business were less unpredictable.
While a number of partner moves were involuntary or resulted from the economic crisis, many other lateral moves reflected partner dissatisfactions and motivations that have existed in good and bad times. These include the desire to change platforms (e.g., move to a multi-office or more national/international platform, or conversely move to a small firm environment), billing rate pressures, lack of firm support for a specific practice area, management issues, personality conflicts, compensation, and turmoil and unhappiness accompanying a merger. All these factors seemed at play in the various lateral partner moves that occurred in Boston in 2009.
From public sources, MLA has compiled a list of the lateral Boston partner moves in 2009 identifying the partners and the firms from which and to which these partners made a lateral change. (To view list click on PDF link below.)
MLA predicts a highly active lateral partner market in 2010. We will continue to see fallout from a slow growth economy as firms continue to attempt to maintain or improve profitability numbers. At the same time, firms will look to build certain practice areas as part of their strategic plan. As partner portable practices become more predictable with a more stable economy, partners will be more encouraged to investigate a lateral move.
Over the last ten years, the Boston market has become markedly more diverse with the influx of out-of-state firms. Last year saw the rapid expansion of a number of out-of-state firms. With its nationwide network, MLA will be continuing to speak to firms about the possibility of opening Boston office as an option for Boston partners looking for such options.