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We don’t talk much about honour in business any more, but we need to. As The Lawyer reported slews of KWM partners finding new homes at a variety of City law firms, a question kept building. How many of them were taking associates? What about the trainees? What is happening to the future trainees in the pipeline?
There were some obvious exceptions. Goodwin Procter, for example, took on 15 associates and five trainees along with the funds partners. Ironically, and this will make many KWM staffers laugh hollowly, Goodwin was, until recently, being sued by KWM for what it alleged was dishonourable poaching behaviour. As Lawyer 2B reported this morning, Ashurst is also lining up to take a handful of trainees.
The best spin you could put on this chaos is that KWM was a series of micro-firms to which partners felt more loyal and that, as in the case of the Goodwin exodus, each group of partners was taking their own teams. Except there’s not a whole lot of evidence that this was even happening. Several City firms were privately indicating before Christmas that they would step in to take trainees, who were being left out in the cold by their own partners. At the time of writing not many deals have materialised.
Even at the back end of last year, associates could hear partners negotiating deals with headhunters. (Classy.) Australian managing partner Tim Bednall, who had been camping in the office for weeks, was working the phones, but Bednall – whose efforts are generally accepted to have been heroic – doesn’t have the network that former SJ Berwin lawyers would have. There are hundreds of people who have helped make the partners a lot of money, and on current evidence many of those partners don’t give a stuff.
Here’s what could have happened in a different world. When Andersen Legal unravelled after its parent firm Arthur Andersen collapsed in the wake of the Enron scandal, UK managing partner Tony Williams personally called in every favour in the City. All Andersen lawyers found homes, and many of them went on to have outstanding careers at their new firms. Williams, the last man in the building, quietly showed everyone what honourable behaviour looks like. By contrast, a few too many KWM partners are resorting to the morally threadbare excuse that they have to fund their current divorce.
But KWM in the UK was never run on collegiate lines. As the fiery and unconventional SJ Berwin, it emulated 80s venture capitalists in culture and energy. It was also a collection of divas largely held together by the commanding and emollient David Harrel. And after his retirement, SJ Berwin never matured into a firm in which collective endeavour was prioritised. The firm was undercapitalised historically, because the priority was keeping partner drawings as high as possible. It was partner behaviour that led to the financial chaos, not the other way around. Here’s a lesson, then, to be learned from KWM. Beware of joining a culture of high take-home earnings; it’s also the culture of the quick exit.
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