Cravath Swaine & Moore: Junior lawyers win ‘special’ bonus early
For once, it wasn’t the money that surprised the market; it was the timing.
Last Tuesday (30 October), New York’s bluest of blue-blood firms broke the trend for end-of-year bonus reporting by announcing its 2007 associate bonuses in October. The move sent a shockwave through New York’s top firms.
Cravath Swaine & Moore is not only awarding its associates a regular end-of-year bonus but also a ‘special’ bonus aimed at rewarding all of its junior lawyers (except first years) for their work in what would appear to have been an outstanding 12 months.
Cravath’s move means that management teams across Manhattan are being forced to consider their own associate bonuses more than a month earlier than usual, as well as to decide whether or not to follow suit and award a special bonus.
Cravath’s awards range from a $35,000 (£16,900) end-of-year bonus for first years to a total $110,000 (£53,000) for class of 2001 and 2000 associates (consisting of $60,000 end-of-year and $50,000 special bonuses).
The move may have stunned Cravath’s rivals (one New York managing partner simply said “Oh my” when told the news), but over at the culprit, presiding partner Evan Chesler claims not to know what all the fuss was about.
“We’ve been talking about what we wanted to do this year in terms of the bonus for several months and decided weeks ago that it was appropriate to give our associates the benefit of having it in time for their holidays and end-of-year plans,” Chesler says. “Also, it would have looked strange to talk about the special bonus and not the end-of-year bonus. This is a little early but frankly not a lot.”
There is scepticism in some circles, however, about Cravath’s motives. As one insider at a top Wall Street firm puts it: “Is it credible that Cravath is doing this solely so that its associates can have their money in time for the holidays? I don’t think so. This is Cravath upping the ante to stop their people from leaving.”
Allen & Overy: A&O jubilant over public prosecutor hire
Allen & Overy (A&O) is cock-a-hoop that last Monday (29 October) it hired David Esseks, the former head of the securities fraud unit in the Southern District of New York’s US Attorney’s Office.
“The biggest significance is that A&O has arrived at such a point that someone of the calibre of David chose to join us,” says US head of litigation Michael Feldberg. “Many, many law firms pursued David.”
Esseks joins as a litigation partner after 14 years as a public prosecutor, giving the firm two former Southern District securities fraud chiefs in its ranks. Pamela Chepiga joined in 2003 as senior litigation counsel, becoming a partner the following year.
The significance of A&O’s growth in this area is that the bulk of major white-collar disputes, such as securities fraud investigations and prosecutions, are handled by the Southern District US Attorney’s Office.
As an assistant US attorney, Esseks was involved in a number of successful high-profile securities fraud prosecutions, including those of executives at Worldcom and Refco.
Esseks confirms he had a number of options but chose to join the UK-headquartered firm over a US competitor because of the opportunities he saw there.
“I was attracted by the chance to help build a practice,” he says. “There’s an excellent foundation here and a commitment to my practice area, but it’s somewhere I can still make a difference and a contribution.”
Growing in New York is a priority for A&O. It currently has 160 lawyers in the city, of which eight partners, two counsel and around 30 fee-earners in total are litigators.
Shearman’s trio of deals reflects dollar weakness
The shifting balance of global economic power was illustrated last month by a triple whammy of deals featuring Shearman & Sterling.
On 24 October, the firm announced its representation of Indian generics pharmaceutical producer Wockhardt on its $38m (£18.3m) acquisition of US rival Morton Grove Pharmaceuticals.
The deal followed the landmark investment by Shearman client Minsheng Bank of China in US bank UCBH Holdings, the holding company of United Commercial Bank. This was the first time a mainland Chinese bank successfully made a strategic investment in a US bank.
The latter deal was led by Shearman partner Lee Edwards in Beijing, along with partners Steve Sherman and Brad Sabel in San Francisco and New York respectively.
Financial regulatory partner Sabel said that overseas interest in the US market had always been high, and although it could be daunting to new entrants, the weakness of the US dollar was making the risk/reward trade-off more attractive than it has been recently.
“The US economy is generally perceived as remaining strong despite the recent turmoil,” adds Sabel.
Earlier in October, Shearman kicked off its trio of international investments by acting for the world’s biggest mobile phone company Nokia on its $8.1bn (£3.9bn) acquisition of Chicago-based digital maps business Navteq.
Wragges and known man
It’s amazing how often a certain British firm crops up in New York. Or, to be more accurate, how often one of its partners does.
Wragge & Co’s David Birch was in town last Saturday (27 October). A spot of Manhattan networking, four days back in Blighty and then Birch was back again yesterday (Thursday 1 November) for the British-American Business Association’s transatlantic awards dinner at The Pierre Hotel.
Wragges might not have a US office, but it generates more than 20 per cent of its revenue from America. And that is largely down to the efforts of lawyers such as Birch.
Now, for any normal networker, Thursday’s do would have been enough glad-handing to justify the airfare. But not Birch.
This morning (2 November), Birch popped up at another BABA event, a breakfast briefing from not one but two ambassadors.
There’s more than one way to skin the US legal market.
Posted: 2 November
Gibson drops China hint
You heard it here first: Gibson Dunn & Crutcher will follow up the launch of its Dubai office with another new overseas outpost, this time in China.
Now, this isn’t the official line from the firm. But once you get the travel bug, it’s hard to stop. The firm is due to return to the Middle East before the end of the year, having binned its Riyadh office in 1998, and all indications are that it is planning a similar volte-face further east.
And frankly, it needs to. Strong as Gibson Dunn is in the US, it still has virtually no visibility abroad, at least in comparison with its major rivals. A whopping 793 of its total 884 lawyers are based in the US.
Despite this Gibson Dunn likes to think of itself as an international, even global law firm. But it’s hard to convince the market – and more importantly, clients – that the firm is truly international without that all-important office coverage.
Posted: 31 October