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Cleary Gottlieb's Vision: Breaking Into Top 20 Firms with Innovative Strategies

published November 14, 2023

By Author - LawCrossing
Published By
( 5 votes, average: 3.6 out of 5)
What do you think about this article? Rate it using the stars above and let us know what you think in the comments below.
Cleary Gottliebs Vision: Breaking Into Top 20 Firms with Innovative Strategies

In a strategic move, Cleary Gottlieb's Managing Partner, Michael Gerstenzang, is spearheading a mission to substantially boost the firm's revenue without resorting to extensive headcount growth or tweaking its single-tier partner pay structure. The audacious goal is to propel Cleary into the echelons of the Top 20 firms by gross revenue, demanding a remarkable $500 million leap from the previous year—a target that signifies a notable 36% gain and aims to surpass its No. 30 ranking among US firms in gross revenue.
 

Navigating the Turbulent Waters of the Lateral Partner Market
 
Gerstenzang's pursuit of revenue growth unfolds amid a legal landscape characterized by a fervent lateral partner market, which he describes as experiencing "incredible frothiness." He sheds light on the trend of top talent making lateral moves enticed by staggering compensation packages. While refraining from specifying particular hires, Gerstenzang emphasizes the allure of eye-popping numbers and underscores the industry-wide challenges such comparisons pose.
 
Cleary Gottlieb's Financial Fortitude and Distinctive Culture
 
Renowned for its M&A prowess and a top-tier global antitrust practice, it is one of the nation's most profitable law firms. Partners at Cleary earned an impressive average of $4.3 million in 2022, showcasing the firm's robust financial standing. With a partner count of 196, Cleary diverges from the exclusive model of firms like Wachtell Lipton Rosen & Katz or Cravath, Swaine & Moore.
 
Strategic Choices: Preserving Culture and Leveraging AI
 
In a departure from competitors leveraging large ranks of nonequity partners, Cleary opted against adopting a nonequity tier in 2020. According to Gerstenzang, this decision is rooted in the firm's commitment to preserving its culture and upholding a reputation for consistent, high-quality work. Despite this, he acknowledges the success of managing a substantial pool of nonequity partners at other firms. He fervently desires to enhance Cleary's performance without compromising its unique culture.
 
Gerstenzang's Optimism: AI as a Catalyst for Competing with Giants
 
In an era of technological advancement, Gerstenzang is optimistic about Cleary's ability to compete with larger firms by leveraging artificial intelligence (AI). The firm is actively exploring generative AI advancements conducting tests on its datasets. The establishment of ClearyX, a subsidiary technology and project development incubator in 2020, underscores the firm's dedication to staying at the forefront of legal technology. Gerstenzang envisions generative AI as a transformative force, reducing the reliance on extensive legal teams for projects and paving the way for a shift towards value-based billing. This change promises benefits for both clients and law firms.

published November 14, 2023

By Author - LawCrossing
( 5 votes, average: 3.6 out of 5)
What do you think about this article? Rate it using the stars above and let us know what you think in the comments below.