On June 6th, Cravath, Swaine & Moore LLP sent out a memo that it was raising associate compensation for the first time in nearly a decade. Last week the UK electorate voted in a referendum to exit the European Union. How are these decisions related?
Our modern business world is an interconnected network of relationships underpinned by law. When a major member of a trading group decides to leave that group, there will be uncertainty as to relationships and rights, triggering decreased future valuations and trade hesitancy. But lawyers will be one immediate and common beneficiary of that uncertainty. Not your average lawyers still struggling with a post-recession slowdown in client spend, but big firm esquires with a global presence.
And who will be doing all this new, time-sensitive and time-stamped research compiling EU, UK, and US laws? Those very associates blessed with bigger paychecks triggered by the Cravath decision. Brexit-burned businesses won’t be happy paying more, but these new legal needs are mission-crucial and secondary legal service providers can’t do them—yet. Cravath’s timing was impeccable.
At this point there is much speculation about the Brexit fallout and its impact on the global economy. We will be following it in the months ahead. While media and industry pundits have begun covering it from every angle, following are a few noteworthy views related to the legal industry:
From Bloomberg Law: Brexit—a Boon for Law Firms?
The Wall Street Journal (with the most clever headline): Brexit Aftermath: First Thing We Do, Hire All the Lawyers