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Faiza Saeed, the Cravath chief modernising a venerable legislation agency 

When Faiza Saeed took the helm as presiding companion of Cravath, Swaine & Moore in 2017, it was seen because the crowning achievement for a lawyer who had distinguished herself as considered one of a handful of elite boardroom whisperers.

Cravath had, for many years, represented the highest of the New York institution and was so influential that just about all its rivals had replicated its values and customs.

Practically 5 years later Saeed, the primary girl and individual of color to steer Cravath, finds herself on the centre of a ferocious expertise struggle.

A serious M&A growth, pushed by the personal fairness trade, has enriched high legislation corporations and allowed rivals to tempt Saeed’s colleagues with jaw-dropping pay offers.

Earlier this week, Saeed and her Cravath colleagues deserted the famed “pure lockstep” pay system it had pioneered, through which companions of the identical rank are paid the identical no matter efficiency. She is now left to navigate what undoubtedly will grow to be a extra cut-throat atmosphere each in and outdoors her personal boardroom.

Saeed, who graduated magna cum laude from Harvard Regulation College in 1991, is a fixture in New York boardrooms, identified for the polished recommendation she provides to highly effective purchasers in complicated predicaments.

“She is an exceptional lawyer,” mentioned Blair Effron, co-founder of Centerview Companions, a boutique funding financial institution and shopper. “She has nice judgment . . . mental integrity, and he or she’s actually agile in serving to navigate very sophisticated conditions.”

Speaking to the Monetary Instances from New York, Saeed mentioned: “The enterprise is way larger and extra complicated than it was after we adopted pure lockstep roughly 50 years in the past, the partnership is threefold bigger, we’re near $1bn in income and we function in a way more aggressive market . . .[The new system] provides a capability to reward extraordinary contribution.”

“I didn’t are available with a bias that I used to be going to alter [lockstep],” she says. “However I used to be at all times prepared to be open minded about it.”

Cravath companions will not be poorly paid — they took residence almost $5m on common final 12 months, in response to the American Lawyer. The agency has simply two workplaces and focuses totally on M&A and normal company litigation — whereas these snapping at its heels have expanded into seemingly each speciality.

Its most notable challenger is Kirkland & Ellis — the world’s highest-grossing legislation agency with revenues approaching $5bn — which has expanded aggressively partly by poaching companions and by forging shut relationships with personal fairness. Kirkland companions took residence greater than $6m final 12 months on common, in response to AmLaw knowledge, and its performance-driven pay extra carefully resembles the mannequin of an funding financial institution.

Cravath’s ethos is poles aside. Prior to now, its companions virtually by no means defected to different giant legislation corporations and had been seen as having a profitable job for all times.

Two former Cravath attorneys described the agency as a “farm workforce”, the place legislation trainees may get glorious coaching and transfer elsewhere. “Cravath is 5 steps behind the market now,” lamented one.

In 2016, offers famous person Scott Barshay deserted ship for Paul, Weiss, Rifkind, Wharton & Garrison for a deal price $10m a 12 months. Folks with information of the small print mentioned he generated some $100m a 12 months in revenues for Cravath. In 2018, Kirkland lured elite litigator Sandra Goldstein.

Maybe extra problematic have been the departures of a number of junior companions, together with some mentored by Saeed herself.

This was one issue within the change, folks near the choice mentioned. The brand new mannequin will incorporate particular person efficiency, in addition to taking account of seniority.

Excessive-profile antitrust lawyer Christine Varney was one of many folks pushing for change. She advised the FT: “You don’t need a compensation system that ties one hand behind your again however you do have to ensure it . . . preserves the ambiance that now we have at Cravath.”

The transfer — agreed over a collection of weekly companion lunches — has been seen as the correct step, in response to companions. Saeed herself mentioned her “willingness to make judgments and carry them by means of” defines her management type.

Beneath her stewardship Cravath — which has workplaces in Manhattan and London — generated file revenues of greater than $824m final 12 months in response to AmLaw. Saeed herself suggested Disney in its $85bn acquisition of twenty first Century Fox in 2019.

Former Starbucks CEO Howard Schultz, a longtime shopper, mentioned: “She’s a unprecedented lawyer . . .[The lockstep decision] demonstrates her bravery as a pacesetter . . . Typically you must make change . . . however she’s completed it in a method that’s introduced all of her companions alongside along with her.”

Saeed, who’s of Pakistani descent, stays considered one of a handful of ladies within the male-dominated world of M&A and company legislation. She mentioned: “I used to be a molecular biology main in school after which I selected to be an M&A adviser on Wall Avenue, so career-wise I’ve been accustomed to being one of some ladies in these settings.”

She doesn’t imagine the brand new pay mannequin will threaten Cravath’s tradition.

“If somebody is motivated purely by cash, they’re not a match for us,” she mentioned. “It’s a idiot’s errand to chase that as a result of we don’t have an ‘eat what you kill mannequin’ and we don’t need it . . . You wish to be aggressive however the individuals who chase the final greenback don’t match with us.”

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