Mark Rosen, chairman of Mark Bruce International, has been handling elite law firm partner moves for decades. He facilitated Scott Barshay's defection from Cravath Swaine & Moore to Paul, Weiss, Rifkind, Wharton & Garrison, as well as moves by other Cravath M&A partners, including Eric Schiele and James Woolery.

Most recently, his work made news again when he placed a group of four partners from Cleary Gottlieb Steen & Hamilton at Freshfields Bruckhaus Deringer. The move stood out not only because it took a substantial M&A practice from a pure lockstep firm, but also because Cleary terminated the group on its way out.

Rosen said Ethan Klingsberg, the rainmaker leading the group move from Cleary, will be much better rewarded at his new firm. He said Klingsberg is guaranteed $10 million a year for at least five years at Freshfields, after making "a little more than $3 million" at Cleary. The other partners moving to Freshfields also got "substantial increases," Rosen said, declining to specify.

(Klingsberg, for his part, said in a brief interview Friday that clients had reacted positively to his move to Freshfields. He declined to speak about the circumstances of his departure, only saying that he thought Cleary was "a great firm.")

Rosen in his apartment with his dog Murray. Photo: David Handschuh/NYLJ

While Rosen's professional career has always been in the executive search field, in his earlier days he was a keyboard player and lead singer for several rock 'n' roll bands in New York—and he's still an audiophile. "The partners I'm working with love coming over to my apartment and listening to my stereo," he said. "It's better than listening to a live performance."

As a recruiter, he said all his work is on retainer and he only handles moves involving leading firms in New York.

This interview was edited for length and clarity.

What do you make of Cleary's termination of Klingsberg?

Rosen: Cleary knew several months ago that Ethan was looking. Ethan went to management and said, "I'd like to fix my compensation. I'd rather stay than leave." This isn't something that [Cleary] found out about last week. They knew they were looking because they told them. They weren't hiding it. Ethan went to the firm when he was trying to reform their structure for compensating partners.

[Cleary disputed Rosen's comments in a statement. "We generally do not comment on personnel matters, but in this instance, we must note that Mr. Rosen's statements are inaccurate," said a Cleary representative.]

Can you describe Freshfields' compensation system?

In a special situation, they felt it was extremely important to them strategically that they have the flexibility to go outside the normal compensation system. There are several other partners in Freshfields' New York office who are making above their traditional lockstep. They did that in order to recruit top high-level talent.

How do you find candidates looking for a move?

In Scott [Barshay's] case, I was introduced to him by one of his former partners and friends. And in Ethan's case, I reached out to him directly. I knew of him by reputation, and he's clearly recognized by his peers as one of the top M&A lawyers in the country. Freshfields was a retained client, and they were looking for someone like that. They were looking for someone like Ethan, a real name to lead and build a top-tier M&A practice in the U.S., and he was a perfect person.

What kinds of requests do you get from law firms?

It's pretty common knowledge that all of the top firms today are interested in dealmakers, whether they are private equity or public M&A, with eight-figure practices. People who have $20 million or more in business.

But top M&A partners will only go to very high-quality firms. It's not just about the money. They also want to go to a firm with a great brand and great platform, so they can grow the practice, where they feel they can do even more business and attract even more clients.

I've placed many high-profile M&A partners. At the end of the day, the partners get paid significantly more than the firms they left. They didn't leave because they disliked their firms. They moved to increase their compensation at the level they deserve in today's market and also to position themselves better to grow their practices. 

Are you working with other partners at other lockstep firms?

Yes, I am. Obviously, I can't say who they are.

Is the lockstep system sustainable?

I don't believe it is. It's not a fair system. I don't believe you can compensate an attorney who is responsible for $40 million worth of business the same way you can compensate someone with $4 million in business.

Five years from now or even sooner, I don't think there will be any pure lockstep firms left.

Some partners at lockstep firms will leave, but there will still be a lot who stay.

I think there will be more lockstep firms making changes to their pay system in the near future. They don't have to completely break the system, but I think all firms are doing a disservice to themselves and their partners if they don't have a way to reward their bigger producers and to keep them from getting recruited.

Will pure lockstep firms disappear because of recruiters like you?

I think recruiters have done an incredible job of helping attorneys receive the level of compensation that they deserve.

Lockstep firms argue the compensation system improves their client service.

I completely disagree. It's just the opposite. Paul Weiss, Kirkland & Ellis, Sullivan & Cromwell, there are no firms in the world that give better client service than they do, and none of these three firms are pure lockstep.

Are you expecting any other big lateral moves by the end of the year?

It's possible. I have several groups I'm working with, both corporate and litigation, who are in serious discussions with a number of top firms. I'm not sure whether the moves will happen this year or next.

Are you seeing more lateral move activity this year?

My business has been pretty consistent. It's been pretty active. I've very fortunate that I have a number of top law firm clients that look to me when they're considering bringing in a lateral candidate.

Are any candidates or law firms discussing how a potential recession will affect them?

The clients I have are not concerned about recession. They are concerned about bringing in superstars and building and growing. They are not concerned about the economy going up and going back. These are very profitable law firms and very strong financially. It wouldn't matter what the economy is like for people they hire. It doesn't matter when you can get them. You want them.

These are people who bring in significant revenue and a lot of business to the bottom line. They will do well no matter what the economy.

What's changed over the years in your line of work?

The compensation for top partners has increased significantly. But on the other side of the coin, more law firms than ever before are making counteroffers to keep their partners from leaving.

What's the top compensation range for partners now in New York? 

They can earn as much as $15 million a year at a top firm, maybe a little higher. 

After the Dewey collapse, which many attributed to overuse of guarantees, are guaranteed pay packages coming back into fashion?

When Dewey first collapsed, people got very nervous. Now I think for the right people, firms are willing to give longer guarantees. Firms generally don't like giving long guarantees, but for somebody who is very, very special, like Ethan Klingsberg, firms are willing to extend them. The longest I've ever seen is six years.

This is a great market. If you're a top M&A private equity rainmaker, it's a great market for people like that because firms are willing to pay extremely well, probably more so than ever before.

Jack Newsham contributed to this report.

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