It’s not yet clear who will be Orrick, Herrington & Sutcliffe’s next chairman. The firm isn’t expected to announce a decision until January. But one thing is certain—the firm’s new leader won’t be regaling colleagues with stories about his adventures as a fresh-faced Orrick associate. All four of the candidates joined Orrick as lateral partners. Finance attorney Alan Benjamin left Morrison & Foerster for Orrick in 1994; Walter Brown, a white-collar litigator, arrived from Thelen Reid & Priest in 2002; litigator James Stengel signed on from Donovan Leisure Newton & Irvine in 1998; and Mitchell Zuklie, a corporate attorney, came on board in 2005 from Heller Ehrman.
Orrick is the latest in a small but growing list of firms to choose a lateral hire to fill the top spot. This month bankruptcy attorney Larren Nashelsky, who joined the Morrison & Foerster partnership in 1999 from Weil, Gotshal & Manges, will become the firm’s new chair. In January, Kaye Scholer announced that Michael Solow, a lateral partner from Hopkins & Sutter, would take over as sole managing partner. And in July 2011 O’Melveny & Myers revealed that Bradley Butwin, a lateral from the firm’s 2002 combination with O’Sullivan, assumed its chair position.
While choosing a lateral partner to lead an Am Law 200 firm is not unheard-of—Elliott Portnoy at SNR Denton and Robert Bodian at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo are also laterals—it is nonetheless a fairly rare event. Firms have traditionally elected attorneys who have come up through the associate ranks for their top leadership posts. “Deep knowledge of the firm is one of the talents that a law firm leader needs to possess,” says Morrison & Foerster’s outgoing chairman, Keith Wetmore.
But it’s not the only one. Wetmore says that a lack of institutional knowledge can be surmounted by a lateral partner if he or she is long-tenured, buys into a firm’s culture, and has held lower-level management roles. “Some of the [people who are] most enthusiastic about the culture are the more newly converted,” Wetmore says. Nashelsky, for instance, previously held positions on Morrison & Foerster’s executive committee and compensation committee, and was a firmwide managing partner. Butwin was head of O’Melveny’s litigation department, and Kaye Scholer’s Solow was cohead of the firm for two years.
The “lateral as leader” trend isn’t just a result of laterals working their way up the management ladder, it’s also an indication of a change in philosophy at many firms. “Law firms have historically had a bias against laterals in leadership positions,” says Peter Zeughauser, a legal industry consultant. “If you didn’t come up through the ranks, people discounted your perspective and what you had to say about the firm.” He notes that “this thinking is still commonplace at several Wall Street–focused New York firms.”
Kaye Scholer’s Solow says that his ascension was made possible by his firm’s openness to having lateral partners participate in firm management, particularly on the executive committee. “I know of firms where there have been debates about whether lateral partners . . . should be on the executive committee,” Solow says.
The elevation of laterals is also due, in part, to the overall growth of the lateral partner market. At many firms, lateral partners have gone from a rarity to a significant chunk of the partnership. Since 2000, an average of 2,000 partners have left or joined Am Law 200 firms each year. “There are firms where the partnership is 50 percent laterals,” says Zeughauser. “We are going to see more and more laterals in leadership positions because partnership ranks [are composed of] more and more lateral partners.”