{"id":10905,"date":"2023-11-08T04:57:45","date_gmt":"2023-11-08T04:57:45","guid":{"rendered":"https:\/\/infundpros.com\/business\/cravath-creates-non-equity-partner-tier-as-it-seeks-to-retain-legal-talent\/"},"modified":"2023-11-08T04:57:45","modified_gmt":"2023-11-08T04:57:45","slug":"cravath-creates-non-equity-partner-tier-as-it-seeks-to-retain-legal-talent","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=10905","title":{"rendered":"Cravath creates non-equity partner tier as it seeks to retain legal talent"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=532b6ece-5bd4-4d1d-bb1a-cd5ecdd172a3\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Cravath, Swaine &amp; Moore, the elite US law firm that has customarily set the pay standard for its peers, has established a non-equity partner tier, in a departure from its traditional structure designed to reward star lawyers targeted by rivals.<\/p>\n<p>In a company-wide note sent on Tuesday, a copy of which was seen by the Financial Times, presiding partner Faiza Saeed said the firm had \u201crecently established the salary partner role\u201d to help it \u201cretain and promote extraordinary people at all levels\u201d.<\/p>\n<p>The move allows the 204-year-old firm to remunerate more junior staff as they come up.\u00a0By contrast, its roughly 100 equity partners buy a stake in the firm when promoted after at least seven years of work and share in its overall profits.<\/p>\n<p>Rivals such as Kirkland &amp; Ellis and Latham &amp; Watkins \u2014 both of whom have poached talent from Cravath in recent years \u2014 already employ a non-equity system, alongside a more traditional equity partner tier, as do other Wall Street competitors.<\/p>\n<p>In her email to staff, Saeed said Cravath was \u201cevolving with our marketplace\u2009.\u2009.\u2009.\u2009with the objective of rewarding those who share our values and objectives\u201d.\u00a0<\/p>\n<p>She added: \u201cThis adaptability is the reason the firm is in its third century as an institution \u2014 a rare feat in any realm and, in particular, in the business world.\u201d<\/p>\n<p>Cravath declined to comment. The move was first reported by Bloomberg Law. <\/p>\n<p>The prestigious firm, whose pay scale had been used as a benchmark for the industry\u2019s big players, has gone through a series of changes over the past few years, as profitability at younger, more commercially minded competitors soared.<\/p>\n<p>In 2021, Cravath overhauled its pay structure by abandoning its pure \u201clockstep\u201d model, which since 1976 had rewarded partners based on their seniority, rather than their performance. The modified system, while still largely following the \u201clockstep\u201d model, allowed the firm to remunerate \u201cfranchise builders\u201d based on merit, Saeed said in her note.<\/p>\n<p>The decision to shift further away from the pure lockstep model \u2014 which in the past Cravath hailed for promoting collegiality \u2014 highlights how it has been under pressure to change to avoid losing talented lawyers lured by bigger pay checks at rival firms. <\/p>\n<p>In 2016 Cravath\u2019s star mergers and acquisitions lawyer Scott Barshay left for Paul, Weiss, Rifkind, Wharton &amp; Garrison. It has since continued to lose younger talent, including Eric Schiele and Jonathan Davies to Kirkland &amp; Ellis; Andrew Elken to Latham &amp; Watkins; and Damien Zoubek to Freshfields.<\/p>\n<p>Firms such as Kirkland &amp; Ellis have been able to hire the most in-demand partners promising high rewards based on performance, through a remuneration model known as \u201ceat what you kill\u201d.<\/p>\n<p>Cravath, traditionally a New-York based firm, also recently expanded into Washington, and hired its first English law practitioners, Korey Fevzi and Philip Stopford, in London.<\/p>\n<p>It is moving from its Midtown Manhattan location to Hudson Yards next spring, which Saeed said would \u201coffer more social spaces and less separation among all of us\u201d instead of \u201cthe traditional partner suites and mahogany wood we are accustomed to now\u201d.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/532b6ece-5bd4-4d1d-bb1a-cd5ecdd172a3\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Cravath, Swaine&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":{"0":"post-10905","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Cravath creates non-equity partner tier as it seeks to retain legal talent | inFundPros<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Cravath, Swaine &amp; Moore,\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=10905\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cravath creates non-equity partner tier as it seeks to retain legal talent | inFundPros\" \/>\n<meta property=\"og:description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Cravath, Swaine &amp; 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