#11 The Legal Profession This Week - Lateral Hires and Pay Wars, and Cyber Security Challenges​


By Dheepa​

Lateral Hires and Pay Wars

US firms’ remuneration packages for partners have increased to an average of $6 million to $7 million a year, up from a previous high of $5 million (Law.com). According to several recruiters, it is no longer just corporate and private equity partners that are in demand (Law.com). Most U.S firms are now targeting a full service offering in London, creating demand for leading lawyers in tax, employment and other areas. According to one partner at a UK firm, the deep pockets of US firms and their resulting hiring power can be summed up in three factors: “gargantuan private equity deals, gargantuan investment banks and the continuing growth of ‘BigTech’ across the Atlantic” (Law.com).

The disparity in pay between US and UK firms both at NQ and partner level highlights the continued challenge UK firms face with retaining top talent. Some firms have started to phase out the lockstep remuneration system in favour of discretionary payments based on performance. For example, recent changes made at Allen & Overy allows partners to be paid up to $5 million, up from the $3 million under its old lockstep system (Law.com). In defence of the lockstep model, one unnamed partner commented that “...above a certain level lawyers mostly aren’t bothered about money. People tend to choose the perceived quality of life over money” (Law.com). An important consideration is that when top partner talent moves, a firm’s top clients and access to market leading work moves with them. Even if money does not factor into decisions on lateral moves, it is likely that the quality of work will.

Cyber Security Challenges

Linklaters is the latest law firm to fall victim to scam attempts. This week, scammers invited individuals via WhatsApp to contact a fake Linklaters lawyer about a foreign business transaction (Law.com). Previous scam attempts include fake emails about deposit payments using the domain name '@link-latars.com' and misusing the firm’s phone numbers during calls claiming that arrest warrants had been issued. Hacking and scams involving law firms have become increasingly common (Law.com). Debevoise & Plimpton, Latham & Watkins, Shearman & Sterling, Dechert, Bryan Cave Leighton Paisner, Ashurst, CMS and K&L Gates have all been subject to various impersonation attempts, mostly involving email scams (Law.com).

Earlier this year, Jones Day reported that hacking group Clop had stolen its client data. Goodwin Procter also reported a similar third party breach of client data when the firm’s file transfer vendor was hacked (Law.com). The shift to full time remote working has increased the number of cyber security attacks law firms face. However, despite the evident risk, data from the Solicitors Regulation Authority (SRA) shows that many Top 50 UK firms lack cyber security accreditation (Law.com). With many firms continuing to provide the option to work from home alongside in-office time, there is a pressing long-term need to invest in robust cyber security mechanisms.

‘Business as usual’ – the notable deals and cases which went ahead this week:

Kirkland & Ellis is advising Blackstone on its $1.2 billion proposed takeover of St Modwen, a U.K. FTSE 250 property developer. Slaughter and May are advising St. Modwen on the offer (Law.com).

Allen & Overy (A&O) advised NBN Co, Australia’s high-speed Internet network operator, on its $50bn term note program. A&O advised on all aspects of US, U.K. and Australian law (Law.com).