Bubble trouble – why Kirkland's latest hire has upped the stakes
Kirkland's hire of Weil banking partner Stephen Lucas is the latest example of US firms wielding ever-more hefty chequebooks to secure the right names...
May 22, 2014 at 05:13 AM
3 minute read
It doesn't just seem to be London's house prices heating up to bubble proportions right now. If the numbers being bandied about the market are to be believed, Kirkland's hire of Weil banking partner Stephen Lucas is the latest example of US firms wielding ever-more hefty chequebooks to secure the right names.
The trend, of course, is nothing new – as magic circle firms have long been able to testify. US rivals have been more than willing to pay over the UK odds ever since they began attempting to crack the City in earnest in the mid-1990s. The difference now is that as firms from across the Atlantic increasingly serve as both hunter and hunted, the packages on offer are climbing ever further from what is on offer within the magic circle. Lucas' trajectory epitomises this trend. Having first moved from Clifford Chance to Linklaters before joining Weil, the 45-year-old has now made his third major career move, this time from one US firm to another.
Not that this is necessarily a bad thing. It is a free market after all and, assuming the firm doing the hiring can afford it, why should it not pay top dollar for the best City talent?
Kirkland's model of churning out large numbers of salaried partners hungry for equity while hiring prime talent around the world on bumper pay packages may not be popular with rivals, but it does seem to be generating sustained financial success for the firm.
A warning could be drawn from the housing market though. Even if items are theoretically worth what people are willing to pay for them, there is always a risk that some people will over stretch themselves in the battle to keep in touch.
And given that it generally takes two to three years for even the best lateral hires to start turning a profit at their new firms, there is a pretty long time lag before a recruit can be judged as a success or a failure.
While Kirkland's model may well continue to work for the firm, it certainly makes for a pressurised environment for everyone involved in the transaction: the firm's leadership, which needs to justify the move, the lateral, who needs to generate fee income of three or four times his or her salary, and the junior (or simply lower-paid) ranks, whose noses may have been put more than a little out of joint.
Still, as mixed financial results drip in from UK firms, if further evidence were needed that the good times are returning to the City's legal market, Kirkland appears to have well and truly delivered it.
- Related: Is Weil's partner exodus a sign trouble is brewing at the firm's London office?
- Should your law firm be doing more to keep you? Click here to provide confidential feedback in Legal Week Intelligence's annual employee satisfaction survey.
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