What Is Paul Hastings Doing Differently From Other Big Law Firms?
Ben Thomson, Big Law contributing writer
A rush of new partners, an aggressive hiring strategy, rapid growth – Paul Hastings has been leading the charge for Big Law growth, producing some remarkable results with the hands-on approach of Chair Frank Lopez.
Frank Lopez is personally involved in virtually every recruiting effort
The hands-on approach from the top leadership is not common among large law firms but appears to be paying dividends in terms of billings and recruitment.
Paul Hastings has seen a spike in demand, with total hours billed rising by 12 percent to over 1 million in the first half of the fiscal year.
This growth rate is four times the average increase seen among the top 50 largest firms in the country, according to Bloomberg Law and other reports.
The firm projects that by year-end, its billable hours will have grown by 10 percent compared to the previous year, reaching 2.1 million hours.
The Big Law Hiring Spree
At the heart of this success lies a deliberate and ambitious hiring strategy. Paul Hastings has added 44 US-based partners through July, making it the second most acquisitive among the country’s 50 largest firms by revenue.
This rate of partner addition is more typical of firms two or three times its size and new partnership move announcements are a regular occurrence.
Lopez, who took the reins in late 2022, is personally involved in virtually every recruiting effort. His approach is guided by a clear understanding of the high-end legal market: to outpace competitors, you need to hire their partners.
In the lateral partner hiring stakes, Paul Hastings comes in second in Bloomberg Law‘s lateral hires chart, right behind Kirkland & Ellis:
• Kirkland & Ellis, 71 partners
• Paul Hastings, 44 partners
• Greenberg Traurig, 35 partners
• DLA Piper, 32 partners
• Holland & Knight, 28 partners
Firm Diversification and Growth
Lopez views the firm’s 17 practice groups as a portfolio of businesses, aiming for diversified success for the firm, building its international reputation as a full-service, high performing legal services supplier.
He believes that 14 of these practices are in the early stages of maturity, presenting significant growth opportunities. This strategy is reflected in the firm’s recent hires across various practice areas, including environmental, tax, structured credit, finance, M&A, and more.
The firm’s strategy appears to be paying off financially. By year-end, Paul Hastings projects the value of a single partnership share to have grown 75 percent over four years and the profits per equity partner have grown more than 11 percent on average since 2020, compared to the roughly 8 percent growth accomplished by an average of the 15 most profitable corporate firms.
Challenges and Competition
However the Paul Hastings strategy is not without challenges. The legal market, particularly in New York and London where the firm has focused much of its hiring, is highly competitive and enduring a prolonged legal pay war that has been described as ‘insane’.
We recently reported in LawFuel about the increase in the two-tier partnership model, used to attract high-paying partners.
Lopez maintains that the firm’s success in attracting new partners isn’t just about compensation, but that many are joining because they want to help build the firm’s young practices into market leaders.
As Paul Hastings continues its ambitious growth strategy, it will be interesting to see how this approach plays out in the long term. While some firms focus on establishing dominance in a few key areas, Paul Hastings aims to create leading practices across the board.
Law firms will be watching to see if the strategy’s success continues, as it could potentially reshape how law firms approach growth in a traditionally slow-growth industry.
