‘Buying back’ partners intent on leaving is risky for both sides – but can work spectacularly
Nick Robbins asks whether it is ever wise for a partner to change their mind having handed in their notice
Is it ever a good idea to threaten resignation to get a pay rise or promotion?
Using a job offer at another firm to improve your lot is a risky strategy. Managing partners – and practice and team heads for that matter – have long memories.
Yes, they may be tempted to provide the necessary sweetener to keep you on board in the short term. But to what extent has that vital ingredient trust been permanently eroded? Any concession handed out at the last minute could just be a temporary expedient to buy time.
And – from the law firm’s point of view – there is the potential damage caused by being seen to cave in to the demands of a member of the team with questionable loyalty.
I was reminded of this dilemma the other day when Dechert succeeded in persuading London private equity partner Mark Evans to stay put rather than move to White & Case with two colleagues.
Somewhat awkwardly for White & Case, it had announced the trio of laterals a month earlier with the appropriate gushing commentary on how its bench would be enhanced.
Given the high demand for private equity partners in a booming market, the firm’s excitement was justified, and it did land two of its targets. But what about the one that got away?
While we don’t know what persuaded Evans to stay, we can safely say that it was an eleventh-hour change of heart.
That is because hiring a lateral partner and taking them through the internal process including the dreaded lateral partner questionnaire can take up to six months involving many partner hours.
When that process is complete and the offer accepted there is still the wait for the partner to hand in their notice and negotiate a departure date and terms. It is at that stage that counter offers are made that weren’t forthcoming before the candidate had that vital negotiating card of a job offer at their disposal.
In my experience around 25% of negotiations founder during the hiring process and a further 10% at the point where the candidate submits their resignation.
Given the current hyper competitive recruitment market, it wouldn’t surprise me if more deals are foundering. But are so-called partner buy backs a good thing for either side whatever the state of the hiring market?
A senior partner at a global firm who I have known for many years believes partners have one opportunity in their careers to threaten resignation. It is a card that must be used sparingly and wisely.
In my experience, agreeing to stay after that tipping point is reached is always risky. That’s because the ‘push factors’ for making a move often involve soft issues relating to a law firm’s culture that are notoriously hard to change, notwithstanding the best intentions of management teams, even if they are new brooms.
Practice area priorities, international strategy – including the potential flashpoint of merger talks – and remuneration structures and bonus systems all come to mind. It is easy to promise a fundamental change in approach, much harder to deliver it.
All of which means partners unhappy with their current firms will invariably be better off moving to where the required changes have either already occurred or they are being hired with the mandate to make those changes.
But buy backs can work.
In 2016, during a period when Ashurst was suffering from significant fall out from its merger with Australian firm Blake Dawson, heavyweight banking partner Nigel Ward decided to stick with the firm after all, his move to Paul Hastings having been unveiled earlier in the month.
Plenty of partners had jumped ship around that time, but when push came to shove, he was persuaded to stay. That decision came to be regarded as a turning point for the firm, symbolising a renewed confidence and change of culture that included better rewarding high performers and was accompanied by a rebound in its finances.
Ward remains at the firm to this day, his London finance team enjoying coveted band one status by Chambers and Partners.
It is a spectacular – but in my view rare – example of a buy back working for both parties.
Nick Robbins is founder and director of Nicholas Scott Legal Search & Selection, the exclusive provider of jobs for The Global Legal Post.