Founding Partner, Michelle Foster, Quoted by The American Lawyer on Law Firms Outside Am Law 100 Elite Stepping Up in Recruiting Talent From Rivals
/Law Firms Outside Am Law 100 Elite Step Up in Recruiting Talent From Rivals
The battle for lateral partners among elite firms in the Am Law 100 has been especially ”wild” lately. But Second Hundred firms, those firms with annual revenues ranging from about $100 million to $365 million, have also stepped up the competition, analysts and firm leaders say.
They’ve added pieces of practices and poached talent from rivals more frequently in 2021 in an effort to grow practice areas, increase profits and move up in the rankings.
“The Second Hundred are recruiting in full force. Certainly in the partner market, they’re some of the biggest buyers,” said Michelle Foster, managing partner of the legal recruiting firm The Foster Group in New York. ”Many have updated their compensation structures. They’ve offered titles. They’ve offered signing bonuses. The Second Hundred … are very actively recruiting and looking for ways to compete.”
Some of the latest poaching moves among Second Hundred firms include Dinsmore & Shohl adding a construction litigation practice group in Denver from regional firm Hall & Evans and a mergers and acquisitions group in Detroit and Chicago from Howard & Howard Attorneys.
Spencer Fane this month added a Husch Blackwell environmental practice leader in St. Louis, one of about 40 laterals so far for the firm in 2021, while Buchalter this week announced it was boosting its health care practice with two lawyers from Los Angeles-based Nossaman.
Firms lately are going out of their way to try and realize their strategic goals, Foster said, including increasing profits, growing practices and moving up in the rankings.
Michael Hammer, CEO of Dickinson Wright, No. 126 in the Am Law 200, said there’s no doubt that the battle for lawyers in the corporate arena is “ultra-competitive, at all levels” right now. But he said among firms in the Second Hundred and beyond, “I think it’s always competitive. It’s always a fight to get your laterals.”
“It’s hard to say if it’s changed or if it’s pent-up activity from last year,” Hammer said in an interview Thursday. “Clearly, there does seem to be a fair amount of larger combinations and of firms wanting to be in the Am Law 100 as part of their strategy, or even higher in that ranking. They think that is what they need to do to be competitive.”
Dinsmore, No. 114 in the Am Law 200, added 10 partners in the M&A and construction group pickups. The firm, which has moved up five spots in the rankings each of the last two years, started 2021 with a bang by announcing a merger with Indianapolis-based Wooden McLaughlin.
Joshua Lorentz, a partner at the firm and chair of its finance committee, said the firm has enhanced its position by constantly evaluating factors such as its compensation system and lawyer autonomy, and the firm tried to keep growing even when much of the world was on pause due to the COVID-19 pandemic.
He noted the firm increased its associate pay scale this year and the firm tries to be as open as possible with partners about pay. Laterals in general have found that type of transparency attractive, Lorentz said.
“Every partner has one vote. All numbers are published. You know how everyone does throughout the partner ranks. All partners have access to all information. Not all firms do that,” Lorentz said.
Another piece that’s allowed the firm to be competitive is allowing lawyers to be autonomous, he said, noting, “We trust our lawyers in how they price matters because they know the clients better than folks in management or folks on the finance committee.”
Competition between Am Law 200 firms has heated up, said Dan Scott, director of Angott Search Group in Michigan, because firms might be looking for a next generation of leaders as many lawyers near retirement age.
But he also said the moves aren’t just a result of firms dueling with like-minded rivals for talent. They’re also a product of individual decisions by the laterals themselves, as well as recruiters getting connected and finding more and more dynamic opportunities for them.
“While that partner’s practice, rates, types of clients, might be compatible, the firm they’re moving to may offer better opportunities for them to grow their practice,” he said. “If you get granular, there is a strong, compelling reason in each case where that partner moves, in terms of why that individual partner felt they had a better opportunity to grow their practice and be more successful as a result of that move.”