Law firms make counteroffers to retain rainmakers; is it a good idea?
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Many law firms are making counteroffers to keep on board rainmakers who are planning lateral moves. But is the enticement effective?
Law.com has a story on the phenomenon, its prevalence and its likelihood of success. The publication’s information is based on interviews with several legal recruiters. They said:
• Many more law firms than not are making counteroffers.
• Kirkland & Ellis is among law firms with a reputation for counteroffers.
• The counteroffers often exceed offers made to entice a lateral move.
• In larger markets, counteroffers can be as high as 20% or 30% more than a partner’s current compensation. Guarantees and leadership positions may also be offered.
• Counteroffers may keep partners on board for the short term but will likely be ineffective over the long term. Often, partners are lost in another couple of years.
“Once you’ve told your firm that you’ve decide to leave, the relationship seems to be in most cases so damaged that it’s irreparable. You can’t fix it. Money doesn’t seem to fix it,” said Joshua Shirley, a recruiter in Chicago.
• Often, firms making counteroffers do so because they can’t afford to lose a valuable partner at the moment, even as they prepare for a possible transition in the future.
“Firms aren’t doing these counteroffers because they think, ‘Oh, this is the partner who we’re going to have for 20 years.’ It’s about, ‘We can’t afford to lose this person right now,’” said Kristen Stark, a San Francisco-based principal at Fairfax Associates.