The demise of KWM provided a powerful reminder that the so called ‘elite circle’ of law firms is not infallible: financial mismanagement can bring even the biggest giant to their knees. The KWM saga, which dominated the headlines for 10 months, shuck the industry. Suddenly a whole host of top lawyers were plunged onto the market! As recruiters, we felt the ripples from our desks, and were at the front-line with safety boats.
Everyone at the firm had their security ripped from under their feet. Passengers saw the hope of a merger on the horizon. However, as the fog cleared, this hope evaporated and the firm went into administration. Up until this point, admirably, many lawyers pushed on despite the external noise and pending carnage, servicing clients with moral turpitude and professional decorum.
University students, smug in the knowledge that they had a TC found the sea of the application process before them once again. Arguably this time, they had a road-map, but nevertheless, we can imagine that the fatigue and burnout was real. Trainees had their training platform taken away; Partners and Associates gradually saw their departments ‘streamline’ as many jumped ship before the KWM ship sank. Some firms were happy to provide a lifeline, feeding off the carcass of commercial carnage, seeing this as a rare opportunity to capitalise.
Recently, KWM proudly announced that all their trainees had found new homes – they had been saved! Credit is due to those firms that gave these trainees a chance. However, to assume that it was purely altruistic is too naive; it makes business sense to hire Silver Circle quality candidates where there is relatively little HR and graduate recruitment effort involved. Second and third tier firms were able to absorb candidates of a calibre that they would otherwise find very difficult to attract. It is perhaps safe to say those firms thrived from the KWM demise – even if it is just on a micro level.
Some trainees landed roles at Magic Circle and elite US law firms; silver linings! It is the TC holders, on whom the door was closed, when they only had their foot in the door, who have been largely ignored: yet a discussion around KWM’s administration and its aftermath won’t make a bad interview discussion point!
Who thrived? Certainly not the clients; but let’s look at the competitors. Firms with the budget to do so have been able to absorb masses of KWM lawyers and attract exceptional talent. In the case of partner hires, hiring firms have absorbed a huge client following and have added strength and depth to their legal service offering – perhaps the boldest examples are Reed Smith and Goodwin Procter. In the case of Reed Smith, the numbers are staggering – 50 strong team hire, including 8 partners! Meanwhile, Goodwin Procter has taken 26 KWM lawyers in London, which is substantial given their pre-acquisition London office headcount. In fact, the firm has doubled its London office space to accommodate this expansion. KWM sank, but many surrounding ships got closer to their destination as a result.
For the real winners, it’s the lessons that we learn. How not to repeat the same catastrophic mistakes. The Titanic sank on its maiden voyage; no law firm is ultimately invincible, though some are much stronger than others. ‘Be careful what you wish for!’