A few partners leave Cravath despite changes that generate more money for superstars
Cravath, Swaine & Moore lost three partners to competitor law firms in January, illustrating that “Cravath is now in the ranks of other New York firms that routinely see partnership shuffles.” (Image from Shutterstock)
Cravath, Swaine & Moore lost three partners to competitor law firms in January, illustrating that “Cravath is now in the ranks of other New York firms that routinely see partnership shuffles,” according to an article from Law.com.
“Cravath is entering a critical time, where its traditional approaches to retaining talent are being tested and its hiring strategy questioned,” the article reports.
The new period begins amid a leadership change with the retirement of the firm’s litigation chief, Evan Chesler, at the end of 2023.
In the past few years, Cravath has eliminated lockstep partner compensation, a move that can help retain and recruit top performers, and it has created a new nonequity partnership tier, which can free up more money for star lawyers. The firm also added a Washington, D.C., office in 2022, staffed with “top government hires,” according to Law.com.
But Cravath has hired few partners from competitor firms. That could explain why competitors who made similar structural changes while poaching talent are seeing good financial results, according to Law.com. Cravath’s chief competitors are in the top five for average profits per equity partner, while Cravath was No. 13 in the most recent rankings from 2022.
“In an otherwise-zero-sum game for macro-environment legal services, if you are going to grow, you have to go and take market share from others,” said recruiter Scott Yaccarino, co-founder of Empire Search, in an interview with Law.com. “It is tough to do organically.”
Several experts who spoke with Law.com pointed out, however, that Cravath has an “enviable client base,” it is involved in many big cases and deals, and it is an “elite brand” known for it’s top-quality lawyering. It is also one of the most profitable firms of its size.
“Cravath isn’t out to prove anything to anyone,” said recruiter Alisa Levin, founder of Greene-Levin-Snyder, in an interview with Law.com. “They don’t feel they need to. They still have an amazing franchise that they are relying on.”