Cleary Gottlieb Steen & Hamilton’s firing of a four partner team that planned to move to Freshfields Bruckhaus Deringer is a further example of the increasing aggression for legal talent shown in the competitive corporate legal market in the US.
It has also provoked some criticism for the impact it will have on Clearys – and potentially other corporate firms who flex their muscles to recruit top legal talent in the current, competitive legal market.
Freshfields Bruckhaus Deringer LLP has hired the team that is lead by major dealmaker Ethan Klingberg as the firm seeks to aggressively expand is US M&A work
Klingsberg, whose clients include retailer Lowe’s Companies Inc, telecommunications giant Verizon Communications Inc and Google owner Alphabet Inc, will lead Freshfields’ U.S. M&A practice, the firm said in a statement on Friday.
Reuters report that moves by experienced partners like Klingsberg are ratre in the M&A legal scene, but the increasing competition for top talent has lead to more aggressive moves by firms, which is also reflected by Cleary Gottlieb’s equally aggressive move in terminating the team.
Recruiters have seen the move by Clearys as having the potential to harm its reputation and to set a precedent that could lead to continued aggressive conduct and poaching.
Among the most notable moves in recent times have been ,Scott Barshay, one of Cravath, Swaine & Moore LLP’s most prolific dealmakers, left the firm in 2016 to join Paul, Weiss, Rifkind, Wharton & Garrison LLP. Kirkland & Ellis LLP has made a number of hires from other law firms in recent years.
Pay for Top Legal Talent
Cleary is among the law firms that reward their partners primarily based on seniority, rather than business generated, in a compensation system – the “lockstep” – which is designed to avoid disputes over who brought in a client.
This has provided an opportunity for firms such as Freshfields to use more flexible compensation structures as a selling point to recruit.
“Ethan Klingsberg is an excellent M&A lawyer, he is balanced and thoughtful. Clients love him and have been very loyal to him,” said Evercore Partners Inc senior managing director Greg Lee, who has worked alongside Klingsberg advising corporate clients, as well as on assignments involving Lee’s investment bank.
Following Klingsberg from Cleary to Freshfields are corporate litigation and securities lawyer Meredith Kotler, corporate governance and capital markets lawyer Pamela Marcogliese, and M&A lawyer Paul Tiger.
The hires represent the latest push for Freshfields to build U.S. market share. It follows hires of top legal talent made in 2014, when Freshfields hired M&A lawyer Peter Lyons from Shearman & Sterling and capital markets lawyer Valerie Ford Jacob from Fried, Frank, Harris, Shriver & Jacobson LLP.
Sources: Reuters & Law.com
There is more to this than meets the eye. Cleary is floundering and not the same website it once was.