When the Music Stopped
The unfortunate souls who will never make partner are victims of the excess that has infiltrated large firms. Salaries shot up during the past decade. In 2007, a booming year for legal business, first-year-associate salaries across major New York and Washington law firms jumped from $135,000 to $160,000. Williams & Connolly, Washington’s preeminent litigation firm, took it a step further, raising first-year compensation to $180,000.
Hourly billing rates followed suit, and partners at elite firms reaped the benefits. In 2007, New York’s Wachtell, Lipton, Rosen, & Katz posted average profits per partner of $4.9 million, according to the American Lawyer’s annual ranking of the highest-earning law firms. Skadden had the highest profits per partner in Washington in 2007, with the average partner in its office here taking home $2.28 million that year, according to Legal Times.
It was a grand time while it lasted.
Last year marked the end of the gold rush. Profits across Washington’s biggest firms stagnated, while New York firms saw their earnings go down. Wachtell’s partners took home nearly 20 percent less than they did the prior year.
The old pyramid structure of large law firms—with hundreds of associates billing thousands of hours at steep rates to support high partner-level profits—works well in boom years, but it falls apart in a downturn, say legal recruiters and consultants. Clients cut legal costs, and firms can’t sustain the overhead of paying all of those previously profitable worker bees.
That leads to layoffs as well as reluctance to make new partners. If the profit pool is drying up, why would existing partners choose to dilute their shares even further by welcoming new members into the club?
Getting away from that model is one of the reasons Andrew Sandler—the former Skadden partner who convinced Tucker and 11 other lawyers to follow him to BuckleySandler—says he decided to take his practice elsewhere. (Sandler became one half of BuckleySandler last spring when his group of Skadden litigators merged with the DC-based financial regulatory and transactional law firm Buckley Kolar.)
Seated next to Tucker on the Fairmont’s patio, Sandler says that at the smaller firm, a lawyer who demonstrates the ability to manage sophisticated cases and gain the confidence of clients can earn the title of partner. But Sandler hasn’t completely lost touch with his big-firm roots. To become a highly compensated partner, he says, a lawyer needs to create new business.
Sandler feels he has much more flexibility to promote lawyers in a small-firm environment, even if they don’t all get to bring home a million dollars a year.
“If I’m going to ask young lawyers to make the kind of sacrifices they need to make to develop the skill sets and service the clients, I have to be able to look them in the eye and say, ‘If you perform, you’re going to be a partner,’ ” he says. “I felt it was important to operate in a business model where I could do that.”
Wanted: Emotional Intelligence
Behind the glass exteriors of trophy office buildings across downtown DC, thousands of lawyers are still plugging away in the big-firm model, hoping for a corner office and a piece of the profits.
Recently promoted WilmerHale partner Tonya Robinson is one of the elite few who succeeded this year. Listening to her describe her recipe for making partner at Wilmer—the second-highest-grossing firm in the District—is a lot like listening to the overachieving senior-class president tick off the list of extracurricular activities that got her into her first-choice college.
“It’s important to do high-quality legal work, for sure,” says Robinson, a commercial litigator in the firm’s Washington office. “But I don’t think it’s enough. You have to think strategically about how to build your profile.”
Robinson says she worked hard to mentor younger lawyers and look for opportunities that would make her “more visible” to firm management. That entailed serving on pro bono, diversity, and community-service committees.
She also emphasizes the value of great references: “I had partners who were willing to brag about the good work I was doing for them.”
Robinson stands out in other ways. In addition to practicing for nearly seven years at Wilmer, she did a three-year stint advising then-senator Joe Biden as counsel to the Senate Judiciary Subcommittee on Crime. At a Washington-based firm like Wilmer—which is home to past government legal stars such as former solicitor general Seth Waxman and former deputy attorney general Jamie Gorelick—high-profile political experience can be an invaluable item on a young lawyer’s résumé.
Wilmer’s co-managing partner William Perlstein made partner at the firm in 1982. He did it the old-fashioned way, starting at the firm as an associate and working his way up over 7½ years. The criterion, he says, has evolved: “It is certainly a broader set of skills. It is certainly not enough simply to be a very good lawyer.”
Perlstein says the firm now factors in what he calls emotional intelligence. To him, that includes well-developed interpersonal skills and an ability to manage large teams working on client matters.