Dechert’s game of Russian roulette
05 October 2009 | By Matt Byrne
14 May 2009
8 May 2009
11 May 2009
16 April 2012
17 April 2008
Laura Brank reveals why she quit Chadbourne to launch Dechert’s Moscow office, and defends her new firm’s strategy in the region. Matt Byrne reports
The head of Dechert’s Russian practice Laura Brank has made a spirited defence of her reasons for leaving Chadbourne & Parke in May, and of her new firm’s strategy in Moscow.
“I believe I was absolutely correct in moving for the reasons I did - the platform is significantly better,” says Brank. “In four months I’ve had more referrals [from the office network] than in the previous four years at Chadbourne.”
The spotlight has been shining on both Chadbourne’s and Dechert’s operations in Russia, following the return of corporate partner Konstantin Konstantinov to Chadbourne just three-and-a-half months after he left for Dechert.
Konstantinov’s move was the latest chapter in an increasingly bitter saga that has gripped the Moscow market. Last week, one New York-based Chadbourne partner also mounted a robust defence.
“One of the key issues in this whole thing has been what would happen to Konstantin, the only Russian-qualified partner among the three who left and the one with the most significant Russian connections,” says a Chadbourne partner. “Now he’s come back and as far as I know the majority of his clients have also returned.
“In fact, most of the office’s clients are expected to continue with Chadbourne.”
On 8 May TheLawyer.com broke the news that a five-partner Chadbourne team headed by Brank was set to join Dechert. Within hours that team had shrunk to just three after Chadbourne managed to persuade two of the partners - Jennifer Handz and Mikhail Rozenberg - to stay with the firm. Konstantinov’s return last month means that just Brank and corporate partner Shane DeBeer ultimately joined Dechert to launch its Moscow office - although over the course of the last few months they have been joined by around 10 more fee-earners.
The slimmed-down launch raises questions about the capabilities of Dechert’s offering in Moscow - questions which Brank was only too keen to answer. “There has been zero impact,” claims Brank. “It’s much more important to have a significant London presence as almost everything we do in Moscow requires English law advice.”
If Brank were looking to pinpoint Chadbourne’s Achilles’ heel, she could hardly have found a better target. When it emerged in 2007 that the firm was in merger talks with Watson Farley & Williams - talks that ultimately failed - it was a tacit admission that it was underweight in the City. That weakness is understood to have been the catalyst for the departure of Brank and members of her team.
“Chadbourne had no capital markets, no EU and competition, and no real litigation capability in London,” insists Brank. “We had to outsource any listings or competition work, which was frustrating. We had basically hit a plateau. From our point of view, being able to work now with a London office that is more than twice the size of Chadbourne’s is critical.”
It is hard to argue with that. Even insiders at Chadbourne will admit that its London office needs some attention.
But the same sources also highlight Dechert’s continuing lack of a resident partner in its nascent Moscow office, with both Brank and DeBeer dividing their time between Moscow and London. Once again, Brank is more than willing to address this.
“I’ve been working in Moscow for 15 years and dividing my time for the past eight years,” she says. “At the time of the split I was the biggest revenue-generator. To claim that it’s a handicap because I divide my time is disingenuous.”
Chadbourne sources counter Brank’s claim that she was the biggest biller, saying it is more likely she was the partner who could claim billing credit for introducing clients but was not necessarily doing the work herself.
With Konstantinov now back at Chadbourne and the dust slowly settling on the summer’s events, Brank is keen to put recent events behind her and concentrate on the future. That includes integrating a batch of new arrivals in September that include litigators Oxana Peters, Timur Djabbarov and Yuri Makhonin, and corporate lawyer Olga Watson.
In total 11 lawyers, including two partners, one counsel and eight associates, have moved from Chadbourne to Dechert.
In contrast, Chadbourne has been forced to make a number of layoffs in recent months (although they pale in comparison with the number made by Dechert), including three associates from its London-based CIS practice. However, the Chadbourne partner confirmed that with the return of Konstantinov the firm was likely to be looking to recruit in this area. It also remains much larger than Dechert in Russia and the CIS.
The bald facts are that Dechert has a new office in Moscow, staffed part-time by two London-based partners and around a dozen lawyers in total, while Chadbourne’s network, which looked threatened back in May, consists of offices in Moscow, St Petersburg, Kiev and Almaty. This network includes six Moscow-based partners and about 25 lawyers in total.
So any suggestions that Dechert’s raid would spell the end of Chadbourne in Moscow have proved to be wide of the mark, although they still rankle with Chadbourne, with one partner describing Dechert’s attempt to secure all five partners as smacking of “hubris”.
It is tempting to look to history for a parallel with the events in Moscow. Indeed, one Chadbourne partner likened it to Napoleon’s Russian campaign in 1812, which was ultimately thwarted by the rearguard action fought by Field Marshal Katusov.
Both sides have suffered casualties but, on paper at least, Chadbourne has come out on top in this skirmish. Yet the firm continues to look vulnerable in comparison with the juggernaut that is Dechert.
While Chadbourne is an all-equity partnership that favours conservative, cautious growth, Dechert has long been one of the most aggressive acquirers of talent in the market, expanding its empire bullishly over the past decade.
By way of contrast, in the past 10 years Chadbourne has minimally grown its lawyer numbers, while Dechert’s have more than doubled.
That contrast was highlighted at the end of 2008, when Brank was still at Chadbourne and the economic meltdown was at its height. A meeting was scheduled to discuss Chadbourne’s strategy and, in particular, growth opportunities.
A week before the meeting was to take place, Chadbourne management cancelled it, with an explanatory email saying that seeking expansion opportunities during the downturn would be tantamount to “celebrating while Rome is burning”.
For Brank, one of the partners who had seen the protracted Watson Farley negotiations stretch over more than a year, this was the final straw.
“For me, it’s as important to have a plan in the slow times as in the boom periods,” she says.
For its part, Chadbourne says it was merely prudent to rethink its strategy while the world appeared on the verge of collapse. “There has never been any pull-back on our intention to expand in London,” claims the Chadbourne partner.