Law firms. In the Money

• Author: John Roemer
• Pages: 24-25

Business of Law | LAW FIRMS

LAW FIRMS

In the

Money

Lockstep compensation, long a

staple of BigLaw, is declining in

order to keep—and attract—talent

BY JOHN ROEMER

In 1919, the Boston Red Sox sold

Babe Ruth to the New York Yan-

kees for an unheard of $100,000 ,

a sum worth nearly $1.5 million

today . Sports fans credit the deal for an

ensuing New York dynasty of pennants

and championships and for Boston’s

World Series drought, known by some

as the “curse of the Bambino.”

Lateral transfers are nothing new.

Like the big leagues, BigLaw seeks to

gain powerhouse rainmakers via outsize

salary offers. The deals have the added

value of draining rivals’ rosters to knee-

cap the competition.

Lockstep compensation plans can

hamper staid old  rms. In 2018,

Cravath, Swaine & Moore, established

in 1819 , fell victim to a no-holds-

barred offer by a nimbler, younger rival

when Kirkland & Ellis, founded in

1909 , signed Cravath litigation partner

Sandra Goldstein for $11 million a year

for  ve years . The megadeal was one

of several in recent years that became

emblematic of a trend away from the

lockstep model decreasingly employed

by traditionalist  rms. In its place, in

varying degrees, is the attorney-for-hire

equivalent of Wild West free agency.

Like the Sultan of Swat, Goldstein got a

signing bonus.

In September, venerable Davis Polk

& Wardwell—where Grover Cleveland

was once of counsel —moved to a more

 exible compensation system to better

attract and retain rainmakers, according

to multiple reports. Another old-line

New York  rm, Cleary Gottlieb Steen

& Hamilton, has modi ed its lockstep

structure, as reported by the American

Illustration by Sara Wadford/ABA Journal

ABA JOURNAL | APRIL–MAY 2021

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-B PM