HSF Kramer Scraps Partner Voting for Some US Lateral Hires (2)

Herbert Smith Freehills Kramer won’t require a partnership vote on certain US lateral hires as the newly combined law firm looks to boost its ranks stateside.

Partners termed ‘US investment lateral candidates’ are subject to approval by the firm’s global council, according to an internal document viewed by Bloomberg Law. The firm will continue to require other hires to be approved by the full partnership, a spokesperson confirmed.

The policy change highlights HSF Kramer’s push to ramp up its US presence following the June 1 transatlantic merger of Herbert Smith Freehills and Kramer Levin. The combined firm is targeting up to 20 partner hires in New York, Washington, and Silicon Valley, emphasizing lucrative practice areas like private equity, M&A, restructuring and antitrust, according to a source familiar with the situation.

“We have an ambitious growth plan and, in support of that, we have an expedited partner recruitment process in our target investment areas in the US,” Herbert Smith Freehills Kramer CEO Justin D’Agostino said in a statement to Bloomberg Law.

HSF Kramer planned as part of the new approach to hire Burr Eckstut, a White & Case partner who focuses on intellectual property and technology deals, but he later opted to stay at his firm. Eckstut did not respond to a request for comment.

Seeking Scale Quickly

Many top law firms require partner votes before adding attorneys to their partnerships, according to Stephanie Ruiter and Jon Truster, New York-based legal recruiters for Macrae. The votes long have been considered formalities at several of those firms, they said, but some partnerships are taking a closer look as the lateral market has heated up.

Axing the full partner vote “makes sense when you have a large international footprint and it’s hard for people outside of specific markets to understand the intricacies of the lateral market in a different region,” Ruiter said.

Skyrocketing demand has pushed up the going price for high-end US partners in key practice areas. Melding compensation practices is often a significant hurdle in transatlantic mergers.

“It’s a highly competitive lateral market,” Truster said. “There are firms that can pay major rainmakers $20 to $30 million.”

European firms, particularly in the UK, have a lengthier process for gaining their partners’ approval for lateral hiring, he said.

“Kramer, being a smaller, New York-centeric firm with less offices, was probably able to do things quickly and more nimbly,” Truster said. “In an effort to gain scale quickly, they must be looking to have a work-around the lengthy process at UK-based firms when they are recruiting.”

HSF Kramer’s council is led by firm chair and senior partner Rebecca Maslen-Stannage, an Australian corporate lawyer who was approved in May to lead the combined firm after steering HSF in the run-up to the merger. The council also includes D’Agostino, a number of elected partners across the network, and two non-executive directors, according to a firm spokesperson.

The merged firm has more than $2 billion in revenue and around 2,700 lawyers. Its headcount includes roughly 630 partners, around 112 of whom are in the US.