Law Firms Escalate Talent War Even in Slower Economy

livemint.com:

A turbulent economy has slowed demand for law firms. You wouldn’t know it from what they are paying for top talent. Elite firms are in a financial arms race to attract and retain lawyers who bring in big books of business, shelling out millions to poach star partners and in some cases entire practice groups.

And as 2023 comes to a close, some notable firms have sparked a salary run, publicly announcing compensation hikes for their attorneys at the associate level, where future stars are born. “Twenty years ago, it was customary for clients to retain law firms; today, clients increasingly retain star partners, not law firms," said Brad Karp, chair of law firm Paul Weiss. “In today’s legal market, the more stars you have, the more successful you will tend to be." Karp’s firm earlier this year lost a chunk of its London office to rival firms, including the office’s leader to Kirkland & Ellis and two private-equity stars to law firm Sidley Austin.

Soon after, Paul Weiss built out its presence by poaching attorneys from other firms, including about 10 of Kirkland’s London-based private-equity lawyers. In the U.S., several star lawyers and practice leaders moved between high-earning firms including Davis Polk, Latham & Watkins and Paul Hastings. Firms looking to bulk up also swooped in to acquire entire practice groups from storied New York firm Stroock & Stroock & Lavan, which folded this year.

“Law is a team sport, and we want to win. It is a competitive landscape," said Paul Hastings chair Frank Lopez. “The gap between the top of the market and the rest of the market continues to widen, so we cannot be complacent." Superstar hires can draw as high as $15 million to $20 million a year in salary, law firm analysts and