Academic journal article Texas Law Review

Law Firms and Their Partners Revisited: Reflections on Three Decades of Lawyer Mobility

Academic journal article Texas Law Review

Law Firms and Their Partners Revisited: Reflections on Three Decades of Lawyer Mobility

Article excerpt

Lawyers once joined their firms with the expectation that they would remain, become partners, and work themselves up the ladder of lockstep compensation. Lateral movements of lawyers among firms were rare. Ethics norms of the time assumed lawyers stayed with their firms.1 That, of course, has changed as lawyer mobility has become a pervasive and unquestioned feature of the contemporary legal profession.2

We now have experienced roughly three decades of lawyer mobility. The modern era of lawyer mobility began with the rapid growth of a law firm by the name of Finley, Kumble, Wagner, Heine, Underberg, Manley, Myerson & Casey. Few lawyers of the present generation have heard of this firm, but it was a game changer. Finley, Kumble broke the mold by developing almost overnight into a legal powerhouse. It did so not through the then-usual means of growth by developing lawyers within the firm but instead sought an immediate impact through attracting political and legal stars and hiring laterally.3 At its peak, the firm could boast of having in its rank of partners three former U.S. Senators, a former Governor of New York, a former mayor of New York City, and perhaps most impressive of all, a former Commissioner of Baseball.4 Overnight, it became one of the largest law firms in the United States. And, apart from the famous personages it attracted, most of its growth was fueled by hiring partners from other firms. These partners moved their practices and their clients to Finley, Kumble. The firm's aggressive lateral hiring practices brought to an abrupt end a lengthy period for American law firms characterized by loyalty of partners to their firms and very rare movement of lawyers from one large law firm to another.5

Other firms quickly abandoned their lockstep compensation structures and embraced rapid growth through lateral hiring of lawyers who overnight could bring their books of business and revenue streams. In many cases, entire practice groups moved to new firms. Firms losing lawyers sought to offset their setbacks by gaining lawyers through lateral hiring. Abruptly, the profession had changed, and the law firm world would never be the same. So dramatic was this development that it prompted one court to describe the revolving door as "a modern-day law firm fixture."6 Even the Chief Justice of the United States was moved to comment on the rapidity of the changes in the legal profession brought by the new development of lawyer mobility.7

If Finley, Kumble's rise marked the beginning of a new era of lawyer mobility, its even more sudden collapse in 1987 signaled that the law firms of this new era would be far more fragile than they had been in the past. 8 Finley, Kumble illustrates that lateral hiring may facilitate dramatically faster growth than firms had experienced in the past, but the cost of that growth is weakened firm stability. Finley, Kumble was the first of the major law firms to fail. But it was not the last. In more recent years, blue-chip firms such as Dewey & LeBoeuf; Brobeck, Phleger & Harrison; Coudert Brothers LLP; Heller Ehrman LLP; Howrey LLP; and Thelen LLP each fell from greatness into the abyss of bankruptcy.9 The collapse of such preeminent law firms would have been unimaginable prior to the era of lawyer mobility. But today, no law firm can guarantee that it will not suffer a similar fate.

At about the time of Finley, Kumble's rise and fall, I published an article in this law review anticipating future trends in lawyer mobility and offering a framework for balancing the conflicting norms (partnership and agency law, legal ethics, and constitutional law) that set the rules of the game.10 The article was expanded slightly and published as a book in 1990.11 Lawyers at the time were reluctant to display the book in their offices, and my editor relayed to me that the publisher was astonished that so many orders were placed with delivery to home rather than office addresses. More recently, both the law and the acceptance of lawyer mobility have changed. …

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