The arms race for talent seems to have made collective action, within and between firms, nearly impossible.
Years before the law firm Paul Weiss struck a deal with President Trump over an executive order that threatened its business, the storied New York partnership made another fateful decision. It raided a competitor for a group of lawyers with an exceptionally profitable client, the private equity and credit firm Apollo Global Management.
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Though Paul Weiss had done some work for Apollo, seizing so much of the client’s business all at once, in 2011, was seen as a coup. Over the next decade, Paul Weiss reportedly brought in hundreds of millions of dollars in revenue as it helped the acquisitive Apollo gobble up everything from the University of Phoenix to Chuck E. Cheese.
Poaching those lawyers identified the firm as a major player in an escalating arms race for legal talent. That race, however, began to weaken the bonds among lawyers that had long held firms like Paul Weiss together. And, over time, that weakening may have made them more vulnerable to pressure from President Trump.
Large law firms have traditionally cultivated talent from within, hiring young lawyers out of law school or clerkships and promoting the very best to partner after several years. While that convention still exists, it has been eroding over time, as firms increasingly view their peer firms as a recruiting pool.
In the past decade, the competition has become especially fierce for so-called transactional lawyers, who advise clients on deals like mergers and acquisitions. Firms court the partners who handle this lucrative work with promises of guaranteed paydays that can exceed $10 million or even $20 million a year with the expectation that they will bring in new business.