Which AM Law 100 firms have been retaining their lateral Partner hires?
Since a dip in 2020, the number of lateral Partner hires made by AM Law 100 firms have increased. In total, over 10,000 Partner moves have taken place, but how successful have the firms been at retaining these hires?
Using data from Pirical Legal Professionals (PLP) we've taken a look at how many of the lateral Partners hired between 2020 - 2023 by AM Law 100 firms, are still at their new firm. We've excluded moves made as a result of mergers.
Ranked: which firms have had the highest Partner retention rates since 2020?
Firms with strong retention - 90%+
Cleary Gottlieb, Davis Polk, Debevoise & Plimpton and Fenwick (1st)
These 4 firms jointly claimed the top spot in our list, as all of them have managed to retain 100% of their Partner hires since 2020.
Interestingly, 3 of the joint top firms and a large portion of our top 30 have something in common, single tier Partnership models. It would seem that operating an equity model can lead to a more stable Partner population, as evidenced by the retention rates of Cleary Gottlieb (100%), Davis Polk (100%), Debevoise & Plimpton (100%), Paul Weiss (97%), Skadden (97%), Arnold & Porter (97%), Covington (96%), WilmerHale (94%), and Schulte Roth (94%).
Source:
Above The Law
Is 100% retention as good as it sounds?
"Even though 100% retention of Partners hired since 2020 is good, it's not yet the sign of success. A lot of law firms need around 5 years to judge whether a lateral Partner hire has been a success or not. Nonetheless, a low retention score after a few years is clearly still a bad sign."
Gary Miles | Miles Partner Placement
Barnes & Thornburg (10th), Willkie Farr & Gallagher (14th), Gibson Dunn (15th), Morgan Lewis (17th) and Womble Bond Dickinson (27th)
These firms are noteworthy for ranking in the top 30 of Partner retention while making an above average number of hires. Each firm made well over 100 lateral Partner hires between 2020-2023 and have retained more than 90% of these new recruits.
Mintz (34th)
Mintz's strong showing in retaining Partners (93%) could relate to the firm's fairly new compensation model. Mintz have capped the origination credit for bringing in business at 75%, awarding credit on a matter-by-matter basis instead. This approach leaves more room for newer Partners to be fairly recognized and rewarded for their part in developing client relationships.
Source: Reuters
The benefit of more selective Partner hiring
"The ranking reinforces the notion that purposeful, more selective Partner recruiting seems to have a much higher success rate. The firms who are recruiting less, appear to have a higher retention rate."
Almost 90% of the top 30 ranked firms in our list made fewer hires than the overall average. Furthermore, 50% of the 10 firms with the highest total number of Partner hires rank in the bottom 20 of retention rate.
Warren Smith | Smith Legal Search
Mid-table performers - 80%+
DLA Piper (64th) and Kirkland & Ellis (65th)
As two of the largest law firms in the market, DLA (88%) and Kirkland (88%) have had similar retention rates over the last few years. Both firms have hired around 450 Partners since 2020 and lost over 50 each, marking some of the highest total exits in our list. However, DLA and Kirkland operate non-equity tiers and maintain huge Partnerships so a high number of exits is to be expected.
Firms with slightly lower retention - 60%+
McDermott Will & Emery (96th)
McDermott (79%) registered 49 Partner departures, one of the highest total exits on our list. In fact, the firm has lost almost as many laterally hired Partners as the likes of Kirkland and DLA, both of whom made twice as many hires as McDermott in the same timeframe.
Lewis Brisbois (99th)
With the highest total number of Partner exits, Lewis Brisbois Bisgaard & Smith (64%) claim 2nd last place on our list. 152 laterally hired Partners have joined and subsequently left the firm since 2020. In fact, a massive 126 of the 152 exits left Lewis Brisbois within the first 2 years of moving. The firm was rocked by mass departures and scandal last year, one possible reason behind the poor Partner retention record.
Source:
LA Times
Shearman & Sterling (100th)
Last place in our ranking goes to Shearman & Sterling, soon to be A&O Shearman. The upcoming merger with Allen & Overy is presumably the overriding factor in the firm's 60% retention rate. 27 Partners have moved elsewhere since the merger was officially announced and lateral hiring ground to a halt in 2023.
We mapped out what the US presence of the combined law firm could look like in a recent article, have a read of
The American dream: a look at Allen & Overy's potential US presence post-merger.
What can motivate Partners to leave?
"Each lawyer will have their own deeply personal reasons for making a switch, yet our research at the Thomson Reuters Institute uncovers several common reasons offered by those who do leave (Fig 1). Dissatisfaction with firm leadership and strategy are top the list, although compensation issues and a lack of opportunities to grow and progress within their careers were also cited.
The firms that have high retention rates are taking a strategic approach to lateral hiring and integration across the entire talent management lifecycle (Fig 2). Firms that have strong retention rates have a talent management strategy that ensures success.
Our previous Stellar Performance research has shown that lateral partners bring roughly 22% of their books of business to their new firms, on average; but that number can reach much higher or shrink to nothing, depending on how well-organized and effective the hiring law firm’s on-boarding and integration strategy is for new laterals."
Tom Snavely | Thomson Reuters
Pirical Legal Professionals (PLP)
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Note on methodology
Source: Pirical Legal Professionals, using publicly available data
Excludes: firms with less than 10 lateral Partner hires since Jan 2020 and Partner moves as a result of mergers
Timeframe: 01 Jan 2020 - 31 Dec 2023
Citations
Written with commentary and feedback from Gary Miles (Miles Partner Recruitment), Keith Fall (Walker Associates), Maria Ho (Vault), Warren Smith (Smith Legal Search) and Tom Snavely (Thomson Reuters Institute).
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