The
last
three
years
haven’t
been
great
for
Cahill,
Gordon
&
Reindel.
The
New
York
mainstay
saw
its
revenue
take
a
20%
dive
over
that
period,
thanks
to
the
decline
in
the
high-yield
and
leveraged
loans
markets.
But
the
problem
went
deeper
than
a
decline
in
billables
—
they
also
lost
~12
partners
to
the
lateral
market.
And
as
managing
partner
Herbert
Washer
told
Bloomberg
Law,
that
“woke
us
up
to
the
realities
of
the
legal
market.”
Historically,
Cahill
is
on
the
smaller
side
of
a
Biglaw
firm
—
300+
attorneys
—
and
eschews
the
lateral
market.
That
strategy
paid
off
with
sky-high
profits
per
partner
and
a
reputation
for
sharing
the
wealth
with
associates
via
generous
special
bonuses.
But
in
the
year
of
our
lord
2024,
would
the
tried
and
true
(105
years
strong!)
strategy
still
work?
Well,
Cahill
decided
it
was
time
to
mix
it
up
—
adding
17
lateral
partners
and
expanding
into
the
private
credit,
bankruptcy,
M&A,
project
finance,
white-collar,
cryptocurrency,
congressional
investigations,
and
intellectual
property
litigation
practice
areas.
As
Washer
said,
“If
the
lateral
market
is
going
to
try
to
pull
people
from
Cahill,
well,
we
can
go
ahead
and
look
to
see
if
there
are
opportunities
for
us
to
pull
partners
from
other
law
firms.”
That
required
tweaking
the
firm’s
compensation
system.
And
it
sure
sounds
like
younger
attorneys
are
the
beneficiaries.
“We
have
very
high
profit
margins,
which
effectively
means
that
we
can
pay
our
partners
a
greater
percentage
of
our
revenue
than
many,
if
not
most,
of
our
peers,”
Washer
said.
“That
allows
us
to
offer
competitive
compensation
to
lateral
partners
because
we
have
the
profit
margins.”The
firm
also
tweaked
its
compensation
system
to
allow
for
more
rapid
ascension,
so
lawyers
don’t
necessarily
have
to
wait
until
they’re
a
partner
in
their
50s
to
get
paid
top
dollar,
Washer
said.
Washer
noted,
“It’s
important
to
pay
people
what
they’re
worth
when
they’re
worth
it.”
And
the
new
outlook
is
already
paying
off.
“By
all
metrics
—
demand,
value
of
time,
billing,
revenue
—
I
think
the
firm
is
up
substantially
over
2023,”
said
Washer.
“We’ve
not
just
sustained
the
business
—
we’ve
grown
the
business.”
Plus
it
doesn’t
hurt
that
the
syndicated
loan
market
is
rebounding.
But
the
firm’s
expansion
doesn’t
mean
it’s
trying
to
be
all
things
to
all
people.
They
still
want
a
focused
—
and
elite
—
practice.
“We
want
to
be
top
tier
in
the
things
that
we
do,”
Washer
said.
“History
suggests
that
being
very
profitable
and
being
targeted
are
not
mutually
exclusive.”
Kathryn
Rubino
is
a
Senior
Editor
at
Above
the
Law,
host
of
The
Jabot
podcast,
and
co-host
of
Thinking
Like
A
Lawyer.
AtL
tipsters
are
the
best,
so
please
connect
with
her.
Feel
free
to
email
her
with
any
tips,
questions,
or
comments
and
follow
her
on
Twitter
@Kathryn1 or
Mastodon
@[email protected].