Scott Barshay had just closed out the finest year of his career. The acclaimed corporate lawyer had advised on roughly $300bn worth of transactions in 2015, most notably AB InBev’s $103bn takeover of rival brewer SABMiller. In the process he generated about $100m in fees for his law firm, Cravath, Swaine & Moore, which ranks among the most prestigious in America.
Just four months later he quit. Frustrated with Cravath’s age-old system of paying its partners according to longevity and seniority versus sheer output, Mr Barshay left the only firm he had ever worked at to move to a New York rival. Paul, Weiss, Rifkind, Wharton & Garrison agreed to pay him more than $10m a year, a package worthy of his thick book of business — which includes blue-chip names such as Qualcomm and Kraft Heinz — in the hopes he could turbocharge its dealmaking practice.
The decision shook the legal industry. Becoming a partner at a firm like Cravath, with access to the global corridors of power, from business to politics, is considered the pinnacle of the legal industry. The so-called “white shoe” firm tried to downplay Mr Barshay’s 2016 move, arguing that its culture and history could weather a one-off departure. But it has turned out not to be an isolated incident. In the past year, two more partners, both younger than Mr Barshay, have left for Kirkland & Ellis, another rival with an aggressive strategy to lure top lawyers with big sums.
There is no doubt that working for the elite London and New York firms still has enormous cachet. According to Jeffrey Lowe, global practice head at the legal recruiters Major, Lindsey & Africa, defections may continue but such prestigious firms will retain their advantage.
“At a Cravath or a Sullivan & Cromwell, for example, you will always be perceived to be at the top of the food chain. There will always be people at the top of the food chain who could make more money somewhere else. But a lot of people don’t measure themselves in dollars — it’s about where you went to school, where you summer, what firm you work at. It’s all part of a persona.”