One of the great marketing campaigns of the late ‘70s and early ‘80s was for a set of kitchen knives creatively pitched as “the amazing Ginsu knife.” They sold an estimated 3 million sets in six years, for a product that purchasers acknowledged they really didn’t need. Nobody ever actually said the product came from Japan, and it didn’t. We just assumed with a name like “Ginsu,” it must have come from Japan, rather than Fremont, Ohio.
The pitch was driven home with the now famous lines "How much would you pay? Don't answer!”, "Call now! Operators are standing by!" and everyone’s favorite "But wait! There's more!"
It shouldn’t come as a shock in the wake of Dewey & LeBouef’s spectacular financial collapse that law firms active in the lateral hiring market want to distinguish themselves from Dewey both for attracting potential lateral partner candidates and for retaining the partners they already have. Both classes are uneasy about one significant element that played a role in Dewey’s demise: aggressive lateral partner hiring.
One popular method of distancing one’s firm from Dewey is, while acknowledging that aggressive lateral hiring is a shared strategy, that (a) our firm does lateral hiring better than Dewey because we aren’t giving out guaranteed contracts, and (b) we have larger capital requirements and little or no debt. One might just as well be saying that it cannot happen here because people at Dewey chewed gum, and that just isn’t done around here.
Let’s review together one method of how a rolling capital account contribution program works. Let's explore just a couple of iterations as exercises from which you can then draw your own conclusions.
(Reprinted with permission of the Daily Journal Corp-2012)
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