Partner Pay Clawbacks Gain Momentum in Active Big Law Lateral Market

In a recent Law.com article, Margie Grossberg, founder and CEO of Benchmark Legal Search Partners, discussed the growing use of compensation clawbacks as law firms respond to an increasingly competitive lateral partner market.

The article examines recent disputes involving Am Law 100 firms and departing partners, including a lawsuit filed by two former Clifford Chance equity partners who were asked to repay a combined $5.8 million after moving to Sidley Austin.

According to the article, Margie has seen an increase in law firm compensation clawbacks in recent years, driven in part by the highly competitive market for lateral partner talent. As firms offer larger signing bonuses and compensation packages to attract and retain high-performing partners, clawback provisions are becoming a more prominent part of the recruiting and retention equation.

The article also explores the legal and ethical questions surrounding clawback provisions, including whether certain repayment obligations may function as restrictive covenants by discouraging partners from leaving for competitors.

Recruiters and legal industry observers explained that while clawbacks remain far from universal, they are becoming an increasingly important consideration for partners evaluating lateral opportunities.

Read the full article on Law.com by Samson Amore and Ryan Harroff here.