In 1903 an American lawyer named Paul Cravath settled how his trade would be organised for the next century and more. Take the cleverest men straight from law school, work them hard for years, and make the survivors partners. The rest became, in the words of the historian Wayne Karl Hobson, droves of “anonymous organisation men” who moved on “only if the firm informed them it could not advance them”. Nearly every big American firm adopted what came to be called the Cravath system.
The system is now buckling, and the agent is cash. Between January and mid-September more than 3,200 partners joined one of America’s 200 top-grossing firms — more lateral hires than in all of 2021, according to SurePoint, a data firm. Switching used to be the habit of second-tier outfits. It has reached the top shelf.
In July William Savitt, co-head of litigation at Wachtell, Lipton, Rosen & Katz — perhaps the proudest name in American corporate law — quit for Gibson Dunn. In September even Cravath, Swaine & Moore, the firm that has carried the system’s name since 1944, poached Michael Aiello, a star mergers-and-acquisitions lawyer, from Weil Gotshal.
Older lawyers remember how this ended last time. Finley Kumble, an upstart of the mid-1980s, became America’s second-largest firm by buying star partners, then collapsed in 1988 under the weight of their pay packages and their infighting. One quarrel finished with a broken glass-topped coffee table.
The firm doing the bending now is Kirkland & Ellis, founded in Chicago. It has grown the way Finley Kumble did, by hiring other people’s partners, but with two advantages its forerunner lacked. It dominates the lucrative work of advising private-equity titans. And it employs “salaried partners” who, unlike equity partners, own no stake in the firm. In 2025 Kirkland hauled in revenue of $10.6bn, an industry record, and could pay its lawyers record sums.
Rivals have had to follow. Annual pay above $10m was once shocking; rainmakers jumping ship can now command $20m, even $30m. Headhunters say many partners move for a change of culture or practice area. Fellow lawyers are more cynical. “I’ve heard people say, ‘I wasn’t treated fairly at my firm.’ What the hell does that mean?” notes a litigator at a leading shop. “It’s all about the money.”
Several forces push the same way. Clients expect global coverage across a wide range of specialities, so hires are meant to anchor a new office or field and bring in new business. The American Bar Association forbids non-compete agreements, so a departing lawyer is free to take his address book with him. And as firms grow, clients attach themselves to people rather than letterheads. “You used to hire firms,” says a New York partner. “Now you hire individuals.”
The individual in the textbook example is Scott Barshay, who moved from Cravath to Paul Weiss in 2016, is said by all accounts to have kept raking in profits, and now chairs the firm. The New York Times reported this year that he was key to Paul Weiss reaching a deal with Donald Trump’s administration after Mr Trump signed an executive order targeting the firm in March 2025. Among other things, the firm agreed to carry out pro bono work for causes approved by the administration. Before the 2024 election, its partners had donated more to Kamala Harris than those of any of their peers.
The arithmetic of poaching is uglier than the gossip. More than 60% of lateral hires fail to bring in the business they promise, estimates Decipher Investigative Intelligence, a research firm, and half leave within five years. Many moves carry one- to three-year guarantees, notes Scott Yaccarino, a recruiter, so a firm can part ways with a star who fails to shine. Even so, several failed bets of tens of millions of dollars each cost dear.
Yet many managing partners feel they must poach or die. Weil Gotshal, hit by defections and unable to hire at the same rate, is reportedly shopping around for a merger. Even Wachtell may have to abandon both its seniority-based pay structure and its “lean and mean” way of working. The destination is plain: an industry of fewer and bigger firms, all of them looking more like Kirkland.
Some lawyers are walking backwards out of this future. Litigators especially are leaving big firms to found tiny boutiques that recall the 19th century, before Cravath. Others are running the other way. David Fox, formerly of Kirkland, has started one of several “AI-first” firms that employ a few lawyers and leave the rest to bots; he claims his software performs as well as a lawyer on the verge of partnership.
Kirkland, though, invented nothing. It found a weakness that was already in the machine. A partnership that grows past a hundred or so partners ends up run by a small committee, and a salary model suits a small committee very well. For years people in the industry have speculated that the most successful firms may one day drop the partnership form entirely and take outside investors to swallow smaller rivals. The investment banks walked that road long ago: partnership, corporation, consolidation. The law moves more slowly, but it tends to arrive where the money is already sitting.