Law Firms Revive Lateral Partner Pay Guarantees Despite Past Controversies.

Lateral partner pay guarantees are making a comeback in Big Law, with firms like Kirkland & Ellis and Paul Hastings reportedly offering multi-year deals to attract top talent. While the use of guarantees is cyclical and often depends on economic conditions, some industry observers note an increase in recent years as memories of past controversies fade.

Guarantees typically range from one to two years, with three-year deals being rare. They can take various forms, including guaranteed points, shares, or specific amounts over a given period. The practice is more common for partners in transactional practices, especially in private equity.

While guarantees can help attract high-profile laterals and provide security for attorneys building new practice areas, they also come with risks. These include potential partnership tensions, resentment among existing partners, and the possibility of laterals not meeting expectations. Firms must balance the benefits of attracting top talent with the potential drawbacks of using guaranteed compensation.

Report by The American Lawyer