Cadwaladers UK office keeps its head down
26 April 1999
US FIRMS looking to move into London have to make choices about how to manage the launch. One ploy for establishing a profile is to install a larger-than-life rainmaker as managing partner to attract clients and recruits. This was the tactic used by Weil Gotshal & Manges with Maurice Allen, and McDermott Will & Emery in appointing William Charnley.
Cadwalader Wickersham & Taft has taken the opposite approach. Its London office certainly made the headlines in the early days, with high-profile raids on major City firms for the group of lawyers who set up the practice.
But it was only a fortnight ago that the firm appointed a partner-in-charge of its London office - nearly two years after the office first opened.
Paul Griffin's elevation to head the office raised some eyebrows at other firms because the promotion came less than six months after he joined Cadwaladers from Ashurst Morris Crisp.
"It is a surprise," says one managing partner of a US firm's London office, who also expresses bemusement at Cadwaladers' claim that there was no one heading the office until now: "You have to have somebody in charge!"
Griffin says the London office was able to run without a resident managing partner because of the structure of the firm and the model adopted for the office. Cadwaladers as a whole is divided into practice groups, each run as a separate business with its own chairman in the US.
The London office is, Griffin says, fully integrated with the firm in the US, building business in specific areas rather than claiming to be a full service firm, and it was not initially necessary to have a single partner managing in London. "We have had the luxury of watching how other firms have done it. Each firm has its own strategy, but I believe this is precisely the right model for Cadwaladers," he says.
The London office was built on three practice groups - capital markets, financial restructuring, and tax and structured finance, to which Griffin added project finance. Real estate is set to be the fifth group.
As far as clients go, ex-Clifford Chance partner Andrew Wilkinson has been advising bondholders on the restructuring of troubled UK telecoms company Ionica, and on the capital markets side John Walker and James Starkey boast a list of top-drawer clients including Daiwa Bank, Morgan Stanley and Lehman Brothers.
Griffin's energy-based project finance practice has been active in Asia, the Middle East and the US, with two Indian assistants recently joining the team to meet the demand for work in the sub-continent.
The real estate practice will be closely linked with capital markets in securitising property portfolios, a speciality of Cadwaladers in the US that is gaining a great deal of interest in the UK, says the firm.
Until now the office has been all-English, but the addition of partner Jim Croke in capital markets and senior assistant real estate specialist Alan Lawrence will see the addition of the first two US lawyers.
As far as his rapid ascent within the office goes, Griffin admits that "things have happened fairly quickly", but says his appointment is a sign of the office's maturity, having reached six partners and 20 assistants in its short life.
He insists that the loss of five assistants since January - the latest being Philip Hertz, who moved to Clifford Chance last week - is also related to this maturity, because, "over 18 months those are the only people who have left, and the development of the practice has been what some people wanted and not what some other people wanted". The departures were bunched together because they followed the paying of bonuses at the end of the financial year, he adds.
Griffin dismisses any suggestion that, in competing with other US firms for UK lawyers, the firm needed a managing partner to raise its profile. His appointment was announced internally with no publicity, and he says if The Lawyer had not got wind of the news, it would have remained within the firm.
Anyone looking to position the new managing partner as some sort of Messiah for the London operation will be disappointed, for Griffin is at pains to play down his role and to avoid the cult of personality. His appointment, he says, reflects the need to move certain administrative functions, such as training, development of infrastructure and recruitment, to London.
Yet this caution seems out of place with Cadwaladers' recent history of massive upheaval followed by bullish expansion.
The firm, founded in 1792, boasts of being the oldest in New York, but was, perhaps, taking its own reputation too seriously by the early 1990s. Its relaxed, old-school culture did not match up to the tough new world of US firms as businesses. Clients complained of slow, expensive service, and as partners' billing hours slumped, so did profits.
Power in US firms does not necessarily depend on seniority, and in 1994 a group of highly profitable younger partners plotted Project Rightsize - a coup that ousted
Cadwaladers' senior management, cut obsolete practices and offices and reformed its archaic pay structure. Cadwaladers' chairman, Robert Link, was one of these Young Turks.
Per-partner profits doubled in the five years after 1994's low of $425,000 (£266,000), and last year Cadwaladers was the fastest-growing of the US law firms with a London base, expanding by over 30 per cent to nearly 400 lawyers in its offices in the US and London.
But despite this dynamism, says Griffin, the firm retains some of its patrician character, which explains the tendency towards caution and understatement.
He admits to early trepidation at the idea of joining a US firm, with their survival-of-the-fittest reputations. "There were these things called New York firms, and I assumed they were all the same," he says.
Cadwaladers remains "one of the most humane of the New York firms", Griffin asserts. "We don't spend our time screaming and shouting at each other". One finds it hard to imagine Griffin screaming at anyone. He chooses his words - and mine - carefully.
When discussion turns to recruiting for the new operation, I put it to him that Cadwaladers was an aggressive player in recruiting English lawyers at the outset. "I think they were... successful," he corrects me.
There were certainly reports that Cadwaladers paid handsomely, with assistants doubling their money in-stantly and rumours of huge bonuses promised to partners.
The firm also hit the headlines recently by announcing a wage hike in New York, leapfrogging salaries over those of some of the top firms. (The Lawyer, 22 March). In London, Cadwaladers "looks at the market and then pays something of a premium" on London rates, is all Griffin would say.
UK firms and the longer-established US offices like to say that new arrivals among the US firms, promising huge pay packets, underestimate the drain on profits caused by competing in the tough London market.
Of course they would say that, but if a firm is paying big money then after nearly two years the partners back in New York may be looking for signs of a return on their investment.
Griffin says the development of the London office has been worked out in full consultation with the US, and that it is a key part of the firm's international strategy. "It would be very unusual to open in a new country and be in profit from the outset. Things have moved forward pretty much in accordance with the plan," he says.
This plan is to have bases in the main financial centres across the globe, and Hong Kong and Singapore "remain under active review".
"We are also looking to Europe, but this will be driven by the business rather than a declared intention to be open," says Griffin.
Griffin's determinedly low profile may not conform to the Messianic role filled by some heads of US offices, but for a firm that claims this measured strategy, his bosses in the US hope Griffin is the man for the job.