As the big money lateral moves among the big law firms continue – the latest being yet another departure from Paul Weiss of its former managing partner – Linklaters have decided to penalize departing partners.
The firm is considering a new policy to withhold year-end profit shares from partners who leave for competing City law firms, according to a report in The Times. This move is aimed at deterring partners from joining what are deemed as competitor firms as the intense lateral hire market – the ‘high’ or ‘low’ point being the big money move by Neel Sachdev from Kirklands to Paul Weiss. (pictured).
Linklaters’ proposed policy could lead to significant financial losses for departing partners, potentially amounting to tens or even hundreds of thousands of pounds.
Despite reporting an average earning of about £1.78 million per full-equity partner last year, an increase of just £10,000 from the previous year, Linklaters is exploring this aggressive strategy to curb partner defections.
This move was initially reported by The Lawyer website and indicates a growing frustration among top City law firms over American firms poaching their talent.
We reported on the raids by Paul Weiss on Kirklands (another US competitor) here.
In recent years, Linklaters has seen the departure of 13 partners to U.S. firms like Paul Hastings, Weil Gotshal, Paul Weiss, Latham & Watkins, and Kirkland & Ellis.
There is also poaching among the large US law firms in The City.
Kirkland & Ellis has acquired former Paul Weiss managing partner, Alvaro Membrillera, (pictured, right) who has decided to depart from his position after serving for over six years at Paul Weiss’s London office and follows his original move to Paul Weiss when the firm set itself up in the UK in 2001.
This trend underscores the increasing efforts of U.S. firms to strengthen their presence in the City by targeting both senior and junior lawyers from their British counterparts. Out of the 25 City firms offering the highest starting salaries to junior lawyers, 24 are American, with Akin and Milbank leading at £177,500 for newly qualified solicitors.
Recently, White & Case raised its starting salary to £150,000, a 7 percent increase.
LawFuel reported on the big law salary increases in London regularly, including the most recent upward moves.
This scenario reflects the competitive landscape where all five magic circle firms, including Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer, Linklaters, and Slaughter and May, are offering starting salaries of £125,000 to keep up with their American rivals.
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