Make way for the Brits!

Cravath has made US associates in its City office redundant as part of its plan to reconfigure for the UK market, RollOnFriday has learned.

The firm opened its London office 1973, but only ever provided advice on US law.

That changed this spring, when it emerged that Cravath had raided Shearman & Sterling in order to launch an English law-facing practice.

The repositioning has rebounded on the firm’s US lawyers in London, several of whom have been made redundant to make way for lawyers qualified in England & Wales.

According to one source, Cravath “fired the entire class of 2021 and many other associates in London”.

However, another source close to US management denied that an entire year had been terminated, and said that redundancies were made across associate levels.

The firm declined to comment or specify how many it had axed, but a source close to management said there had been a “limited adjustment to associate staffing and a select number of roles were eliminated”

Cravath has added the two partners it nabbed from Shearman to its website, and currently lists 21 US-qualified associates in London.

Stating that “it was the right time for us to think about the needs of our US finance practice in London”, a source described the cull as “an exercise that was done with a view to both current operations, but also planning for the future and thinking about appropriate staffing and the experience we want people to have at Cravath”.

The firm has traditionally led the pack on setting the pay scale among elite US firms each year, and its designs on lawyers qualified in English law is another headache for UK firms hoping to hang on to their brightest and best with salaries that don’t stretch to Cravath’s £178k for an NQ (although they are getting closer).

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Bringer 06 May 23 23:54

Cravath pays more than NY rates for their london-based US lawyers, who earn the US lockstep rate + COLA top up. So if they can bill out these Shearman lawyers at the same rate but at a lower salary (even if paying the lockstep rate, they’d save COLA which can be 50-100 USD per year), this seems to make financial sense even if mercenary.

Truthteller 09 May 23 21:34

It is likely that firms will sack many US capital market associates this year because there aren’t much market activities and these highly paid associates can’t be retooled (due to the UK/US drafting differences). 

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