Scott Barshay had just closed out the finest year of his career. The acclaimed corporate lawyer had advised on roughly $300bn worth of transactions in 2015, most notably AB InBev’s $103bn takeover of rival brewer SABMiller. In the process he generated about $100m in fees for his law firm, Cravath, Swaine & Moore, which ranks among the most prestigious in America.
Just four months later he quit. Frustrated with Cravath’s age-old system of paying its partners according to longevity and seniority versus sheer output, Mr Barshay left the only firm he had ever worked at to move to a New York rival. Paul, Weiss, Rifkind, Wharton & Garrison agreed to pay him more than $10m a year, a package worthy of his thick book of business — which includes blue-chip names such as Qualcomm and Kraft Heinz — in the hopes he could turbocharge its dealmaking practice.
The decision shook the legal industry. Becoming a partner at a firm like Cravath, with access to the global corridors of power, from business to politics, is considered the pinnacle of the legal industry. The so-called “white shoe” firm tried to downplay Mr Barshay’s 2016 move, arguing that its culture and history could weather a one-off departure. But it has turned out not to be an isolated incident. In the past year, two more partners, both younger than Mr Barshay, have left for Kirkland & Ellis, another rival with an aggressive strategy to lure top lawyers with big sums.