Mayer, Brown’s New York office opened in 1978, was one of the most profitable in the Mayer, Brown orbit over many years, and from 1995 to 2003 grew by more than 100 lawyers.
Since January 1, at least eight partners have left for other firms – including litigator Dennis Orr, one of Mayer, Brown’s top rainmakers. Reports are that revenue in the New York office is flat this year, and the relationship with the home office in Chicago is tense.
So what happened?
The New Yorkers contend they have little say in the firm’s decision-making process and that the financial reporting system that breaks down profits and losses by location has created an office-versus-office dynamic, inciting Mayer lawyers from Chicago to fly to New York to meet with Morgan Stanley’s general counsel without inviting anyone in the New York office.
Firm managers lay the blame on the compensation system, where origination was everything. Under a new regime, they promise less emphasis on the performance of a partner’s practice group or office and more on a partner’s potential contributions.
Compensation is a powerful motivator, and lawyers shrewdly respond to explicit and implicit incentives in the system. But it is almost impossible to eliminate gamesmanship from compensation. The only chance of elevating firm dynamics above the compensation games is to raise the level of trust among the partners, a daunting challenge, but one that pays off enormous effort with firm harmony and productivity.