Wowser, the already busy partner lateral market has gotten a kick in the tushie. A group of four Cleary Gottlieb Steen & Hamilton partners have decamped from the New York mainstay for the Magic Circle firm of Freshfields. The partners come from a variety of practice groups: Mergers and acquisitions partner Ethan Klingsberg, corporate lawyers Pamela Marcogliese and Paul Tiger, and litigator Meredith Kotler.
What makes this lateral move particularly notable is the move from a firm noted for its lockstep partner compensation, to one that has abandoned their lockstep model for one that lets them pay top dollar to recruit talent. According to reporting by Law.com, Klingsberg (and his $30 million book of business) was fielding offers from multiple suitor firms, and had offers of a guaranteed multimillion-dollar payday that would last for several years. All of which may signal that Cleary partners are ripe for the picking:
“It will be open season on Cleary partners,” as other firms will try to lure more partners from the firm, [Alisa Levin of Greene Levin Snyder, who places partners at elite firms and is a former Cleary associate] said. “Cleary lawyers are known to be among the best and most creative in the field and previously regarded as virtually untouchable by other firms. If someone like [Klingsberg] can be poached, I think others are going to stop and think.”
This lateral move is also of note because there are clues that there’s some bad blood between the parties. Sources have reported — and Cleary confirmed, without any further comment — the quartet of partners were actually fired by the firm before they had an opportunity to give their notice. Which… is not how these things usually go down.
But in Klingsberg’s statement on the move, he kept things exceedingly polite and focused on the “awesome” services at their new firm:
“We are excited to be joining Freshfields’ blue-chip platform. The service that we and our new colleagues at Freshfields will bring to clients promises to be awesome,” He added, “We have all enjoyed our time at Cleary. The momentum and strategic focus at Freshfields will enable us to help our clients with unparalleled service for many years to come.”
Cleary hasn’t made an official comment, but that won’t stop people from speculating about the impact this move will have on the larger firm:
Levin, the recruiter, noted that that the partners’ move from Cleary could be a “one-off thing or it could start a domino effect. We don’t know yet.”
“The firm will do fine, it’s an institution. It’s highly respected,” she said, but “there’s more and more pressure to be able to retain your talent.” She recommended that Cleary take steps to make sure “their partners are committed to the culture and to the [lockstep] system.”
Only time will tell.
Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. 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).