Larry Bodine’s post on his discussion with Mayer Brown’s Director of Global Communications, Doug Kramer, got me thinking. In case you missed it, Mayer Brown fired 45 partners–men and women who have sacrificed for the firm and who have families to feed and kids to put through college. The reason? Well, Mayer Brown’s profits per partner were only $1.1 million per partner. "When we rank 51st, well behind our peers, it raises a big issue in terms of attracting top talent and keeping it," Kramer said. Kramer went on to say that "we badly want to keep our best talent and attract the best talent, and PPP is a key metric that the marketplace looks at. So when we’re 51st compared with other firms that we’re just as good as, we had to take decisive action."
This got me thinking. Is PPP really the metric partners look at when moving firms, or is it just a convenient statistic for American Lawyer to use to "rank" firms. Seriously, If publicly traded companies manipulated their stock prices the way major law firms manipulate their profits per partner numbers, every senior corporate executive would get to do the perp-walk and the chance to spend a few years at Danbury Minimum Security prison. PPP is a joke. And what’s more of a joke, lawyers either are so stupid that they can’t see behind the manipulation or they know how meaningless the statistic is, in which case law firm managers are fools for running their firms based on a bogey everyone knows is so malleable. Seriously, senior firm managers really have to ask themselves, if a prospective partner is attracted to them because of their PPP and doesn’t know how the firm’s "stock price" is so easily manipulated, do they really want such a fool as a partner? And if partners choose to move to firms based on factors other than PPP, then why are law firm managers so myopic that they don’t focus on the truly relevant factors?
Kramer tries to justifies Mayer Brown’s move by saying clients are offering empathy. Don’t take that too far. They’ve all had to cut employees. That doesn’t mean they don’t laugh behind your back at the legal industry’s amateurish economics. (Haven’t we all heard clients lamenting the very profit per partner altar Mayer Brown just paid homage to when faced with another round of staggering hourly rate increases?)
My perception? Mayer Brown just killed whatever semblance of institutional loyalty that might have existed.