A Closer's Coffee

A zero-sum game is a concept from game theory describing a situation where the gains of certain participants are exactly offset by the losses of other participants. For example in a polygamous sect the old guys in charge want to marry the young girls, which is why when the boys start to express interest in the girls they are kicked to the curb of the streets in the nearest city. In case you haven’t noticed, this is the same system used by law firms concerning associates: with the partners as the old guys, the clients as the girls, and the associates as the lost boys exiled from the compound.

A friend of mine put it to me this way “Unless we think that an associate can walk off with $5million in business we are not about to promote that associate to partner. “

The problem for the firms, under this scenario, is that they are losing trusted employees in whom they have invested many hours of training. They are also missing an opportunity to organically expand their practices and open new areas of business by pushing out young ambitious talent who could be deployed in new ways.

Jones Day did this in waning days of tobacco litigation. They asked themselves what areas of business can they pursue that would replace their tobacco addiction? Medical Device litigation was chosen as a replacement because it commanded high rates, and like tobacco is a type of products liability work for which these litigators are well suited. It took time, persistence, and a tremendous effort but eventually Jones Day became a major player in pharmaceutical and medical device litigation. Their clients in this area include Wyeth, Abbott, TAP Pharmaceuticals, Zimmer, Mentor, and Acromed.

One of the other key law firms in big tobacco litigation who did not employ a strategic plan for a post tobacco era, and instead had mass firings of associates, counsels and partners. The managing partner of this firm grimly described it as “a trimming of dead wood.”

It is my view that the execution of a strategic plan like the one Jones Day did in the pharmaceutical industry is as rare as baby pandas born in captivity. This does not, however, let associates and partners without business off the hook. If you have made it over the successive academic and professional hurdles to a senior level, you certainly have the smarts and talent to build your own clientele. The question is: Are you willing to use your imagination, and to take a few risks?

Take Jamie Sprayregen for example. Jamie came to Kirkland in 1999 from Rudnick & Wolfe with a plan. Kirkland had little in corporate restructuring, but Jamie saw that the highly leveraged portfolio companies owned by K&E’s private equity clients (btw, a practice built from scratch by Jack Levin!) would require debt restructuring from time to time. He helped to build the practice far beyond that, in fact the American Airlines restructuring alone produced $100million in fees.

I picked these extreme examples to make my point. There are many more stories where a senior associate saw an opportunity to add such things as leasing to a developers’ real estate practice adding a $1million in new business.

I am reminded at this point of the end of Alec Baldwin’s Coffee is for Closers monologue in Glengarry Glen Ross where he tells the men that the money is right there, and asks them “are you man enough to pick it up?”

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