Fight for the right party
14 December 2007
This was a tale of two bashes. The date? Tuesday 11 December. The venue? The 36th floor of the glitz-strewn Mandarin Oriental Hotel on the edge of Central Park. The host? Good question.
As we reported earlier this year (The Lawyer, 26 February), Mourant du Feu & Jeune made legal history by becoming the first offshore firm to open in New York. This week it also made the schoolboy error of hosting its Christmas party next door to that of another, significantly larger, and entirely unrelated, outfit. Same floor, same cloakroom, different party.
The only clue to the difference between the assembled groups of suits was the river of alcohol being consumed at the Mourant party. As we all know, it’s tough offshore and only a barrel-load of vodka can assuage the pain of working in the Cayman Islands, Bermuda or the British Virgin Islands.
So the lawyers from Mourant’s farthest-flung outposts converged on New York to drown their sorrows. They were also celebrating the opening of their small, but perfectly formed, Big Apple shop.
Heading the crew was chief exec Stephen ‘on the’ Ball, who reminded me that the party was not just about lawyers. Oh no. Mourant is much bigger than that, Ball insisted. As well as the law firm, there’s a funds administration arm and another strand, Mourant Private Wealth, which helps billionaires squirrel away their cash offshore.
“This is partly about our new New York office, but it’s also about us celebrating the one brand,” said Ball.
Shame about the two parties then. Eventually the guests who’d wandered into the wrong party realised their mistake and sidled into Mourant’s rave.
And yes, okay, they included yours truly. It was a deliberate strategy to practise my gatecrashing skills.
Trumped again, AGAIN
More on Donald Trump. This time the poor, unsuspecting lawyers to get Trumped belong to Lovells.
Once upon a time (or last year, to be more specific), the lawyers in Lovells’ Chicago office enjoyed a charming and uninterrupted view of the river. Not any more.
The man with the unfeasible hair, who coined the phrase “You’re fired” on the telly, has put the block on Lovells’ vista. An office block, to be exact.
The Chicago Trump Tower is going up faster than a syrup in a stiff breeze. It’s already put paid to Jenner & Block, which is planning to hightail it to a new building in 2009. And IBM, which used to be the anchor tenant, left long ago.
Word is the bottom third of the building is going to be turned into a high-class hotel (which has to be better than Bird & Bird’s experience in London, when a burlesque club opened up in its basement).
Exactly how that’s going to mix with the serious business of international law is anybody’s guess (probably perfectly, is mine).
But now Don’s new pad is well above Lovells’ eyeline, Lovells’ Chicago managing partner Dave Linder has the perfect excuse to start looking for a new home. Rents are around $30 per sq ft for Class A space (this is not, apparently, somewhere you can score top-notch white powder).
So why not move?
Actually, Linder reckons this time next year Lovells will have outgrown its current office anyway. There you go Dave, that’s called putting a positive spin on the situation.
One name kept cropping up all over the Windy City last Friday (7 December). I was in Chicago, a guest of Wragge & Co at the annual British-American Business Council’s Christmas bash.
Nope, those plucky Midlands types aren’t planning a Midwest opening as far as I know, and nope, Wragges wasn’t the name.
The Birmingham firm, in the reassuringly well-connected form of roving Brum ambassador David Birch, was hosting a table. On the guest list was Larry Swibel, name partner at Chicago boutique Fox Hefter Swibel Levin & Carroll. And the name? Larry had a story to tell about TV’s Mr Iron Hair, Donald Trump.
Trump – who appears to have ruffled more than a few feathers in Chicago with his new tower – and Swibel were battling over a real estate deal earlier this year. Days before the deal closed the star of The Apprenticemade an appearance.
According to Swibel, as Trump entered the meeting room he glared at his opponent with his trademark flinty stare and barked: “I know you. You’re an aggressive shark.”
A somewhat surprised Swibel, who had never before met Trump, managed a: “Good to meet you,” and the meeting began.
The next day the deal was due to close. But one key clause still needed ironing out. Swibel put it to Trump’s lawyers that the deal couldn’t progress until Trump had OK’d the clause.
“We’ll call him,” they said.
Five minutes later they were back in the room.
“Did you speak to Donald?” asked Swibel
“Did you tell him about the clause?”
“What did he say?”
The lawyers paused. And then told him. Let’s just say, it rhymes with ‘Duck poo’.
Deal-doing, US style.
The sport of litigation
Everyone keeps telling me the true national sport in the US is litigation. So I thought I’d take a look to see how the UK’s teams were doing in the league.
The prize goes to Clifford Chance for having the most former public prosecutors in its ranks. A&O just sneaks its grudge match against Freshfields, after hiring former 1970s singing sensation David Esseks from his previous role as an assistant US attorney. Rock on, David.
Links, meanwhile, trails miserably in fourth place (it’s even behind Lovells, which has three). For context, Kirkland & Ellis has at least 20 former prosecutors.
There’s been a rash of moves such as Esseks’ recently, the most recent that of Peter Bresnan, the former deputy director of the SEC’s enforcement division, who’s joining Simpson Thacher & Bartlett as a partner in January.
I asked one of Wall St’s top fraud litigators and one who has also trodden the well-worn path from public service to private practice, namely Sullivan & Cromwell partner Sam Seymour, why it mattered for firms to have these former public prosecutors on board. Here’s what he said: “White-collar crime used to be something for a boutique to handle, but it’s now a staple of the bluest of blue-blood firms [I think I know who he means].
“It’s been said there has been a diminution in the appeal of these lawyers, but I don’t see that. Competition is still very robust and clients really take comfort when their counsel is a former public prosecutor.”
Seymour, half of Wall St’s top husband-and-wife fraud-busting unit (actually, it’s probably Wall St’s only top husband-and-wife fraud-busting unit), should know. Although he’s unlikely to be cheering on the UK firms from the touchline as they build their litigation credibility with former public prosecutors, lawyers such as Seymour at least admit it’s a good game plan.
Ashurst and its anaemic tuna
Ashurst's Duncan Stiles has true grit. I met the firm's new head of its US operations last Friday (30 November) at the end of his first solo networking trip over here. Even though his flight home was barely minutes away, Stiles still treated me to a splendid lunch at Michael's on W55th St.
I say splendid; mine was a perfectly grilled Kurobuta pork chop with baby spring vegetables, sour cream and aged gouda whipped potatoes (otherwise known as mash). And Stiles? Tuna that looked like it was about to start swimming.
In my (admittedly limited) experience, US customs officials tend to take a dim view of passengers who look as though they might be stuffed full of the latest communicable and contagious disease, even if they are leaving and not entering the country. Trust me, Green is not just the name of Stiles' senior partner. There was sincere concern chez Byrne that he'd fail to make it back to Britain at all.
But he showed his mettle as he ploughed through the anaemic-looking grub. It was the same grim determination that had just taken him on his first dusk-to-dawn, contact-meeting epic around New York (and even Rochester, for pity's sake).
Now help is at hand, at least with Ashurst's US coverage if not with Stiles' diet. At the firm's October partnership conference in Marbella, Stiles revealed his masterplan. Currently as Ashurst's sole partner directly responsible for US client and law firm contacts, Stiles has around a week a month to refresh relationships and drum up business.
Stiles' idea is to have a nominated senior partner in each of Ashurst's overseas offices responsible for coordinating US clients and contacts. It will be their responsibility to then feed that intelligence, which might otherwise disappear, back to Stiles. It's a human CRM system at partner level.
According to Stiles the new system has already generated instructions. They might not yet be on the scale of Ashurst's representation of Cerberus in the Northern Rock saga, a referral that came via the firm's longstanding relationship with Schulte Roth, but it's early days.
And maybe they'll have some lunch tips too.
Further entries in the 'Byrne in the USA' blog, as published in The Lawyer (26 Nov 2007):
Client launches anti-Hogan ad campaign
There may be no place like home, but for Hogan & Hartson partner Ty Cobb a change of address uncorked a heap of trouble recently.
The vitriol reached a peak last week when a former Hogan client, Denver-based General Steel, launched an extremely high-profile and ferocious advertising campaign lambasting the firm.
The company put out a public call in newspapers and on the radio claiming it had been short-changed by Hogan in terms of services.
It asked any other Hogan clients that may, in its words, have discovered its lawyers were "less experienced" than expected to call a toll-free number. It is not known whether any have taken advantage of this unique opportunity.
The campaign was an attempt to recoup costs incurred by General Steel when it instructed Hogan on a lawsuit it faced three years ago. During the matter, leading white-collar defence lawyer Cobb relocated from Denver (home of General Steel) to Washington DC, an event the client claimed led to it being represented by a less senior lawyer, namely employment associate Sean Gallagher.
General Steel (known in its own ad campaigns as 'The General') settled the lawsuit and agreed to pay $4.5m (£2.57m). It then sued Hogan.
The company's president Jeff Knight apparently warned Hogan in the settlement negotiations that he would initiate a "shock and awe" advertising campaign in order to influence Hogan to settle.
According to Hogan general counsel George 'Sandy' Mayo (who may have been speaking with just a trace of sarcasm), Knight designed the campaign himself "because of his expertise in advertising".
Mayo says the campaign and its argument was "complete nonsense".
"Ty Cobb is a very successful trial lawyer who tries cases all over the country," Mayo adds. "It doesn't matter where he lives. The notion that where his house is located has any impact upon his abilities is laughable."
The case is set for arbitration in Denver next April.
General Steel did not return a call for comment.
Reed Smith evolves its practices along industry lines
Reed Smith has appointed the former senior partner of Richards Butler, Paul Johnston, as the head of its new global financial services group.
Johnston starts his new role on 1 January next year along with Los Angeles litigation partner Michael Brown, who will become head of life sciences, another new firmwide group at Reed Smith.
The move is part of an ongoing process by the firm to restructure its practice groups along industry verticals instead of traditional practice skill sets.
The firm began the process on 1 January this year with the launch of its private equity and real estate divisions.
The two latest groups represent Reed Smith's largest revenue-generating areas. Each group will contain more than 100 lawyers and contribute more than $100m (£48.55m) to firmwide turnover. Reed Smith chairman Greg Jordan said the move was a "natural step" in the evolution of the firm.
"We're going to be taking another step in the growth of the firm and have all the lawyers who represent certain types of clients and their interests moving into one group, irrespective of their individual specialities," says Jordan.
Jordan adds that he anticipates the firm's global turnover would be in excess of $1bn (£485.49m) in 2008.
"Each of these two new groups will contribute around 10 per cent of our 2008 business," he adds.
Jordan says it would be the responsibility of the group heads to drive them forward strategically, with full responsibility for staffing, marketing and direction.
"More than anything, we'll be looking for Paul and Michael to be real leaders of these key groups," he adds. "Myself and the rest of the management of the firm had the responsibility of filling these positions and we're delighted the two of them agreed to step in."
Big business turns to lawyers for compliance
Several stories in this column over recent weeks have focused on the aggressive growth strategies of numerous firms in New York. But it's not just private practice firms that are out in packs hunting for lawyers.
Thanks to the ever-more stringent US regulatory regime, lawyers are increasingly becoming in demand as compliance officers in major corporations.
According to Alisa Levin, one of the principals at Manhattan recruitment consultant Greene Levin Snyder, compliance right now is "white hot".
"I've placed more compliance officers in the last year than in the previous five," says Levin. "Five years ago we handled the occasional compliance search. Now every fifth in-house position will be a compliance search."
And as with the rest of the legal market, the salaries are growing to match the visibility.
Levin says senior compliance officers at major corporations or investment banks can command salaries of at least $700,000 (£339,850). One reason for that is the element of personal liability that goes with the territory.
"It's a very tough job," adds Levin. "You have a target on your back now because of the increased reporting requirements of US companies and the fact that these positions carry some degree of personal accountability to the compliance officers themselves. It's scary stuff."
Cohen Milstein invokes 200-year-old law
Last month saw a US Court of Appeals decision that could have implications not only for a significant number of the world's leading multinationals, but also for the US itself.
Cravath Swaine & Moore led the charge for the defendants, while litigators from Cohen Milstein Hausfeld & Toll (including Michael Hausfeld) represented the plaintiffs.
At stake is a $400bn (£194.2bn) class action centred on the apartheid regime in South Africa between 1960 and 1993. As one lawyer involved with the case puts it: "The plaintiffs purport to represent all of the non-white citizens living in South Africa during apartheid."
The suit is predicated on the Alien Torts Claims Act, which grants US courts jurisdiction over certain violations of international law. The law dates back to 1798 and was considered redundant for most of the previous two centuries. But according to another lawyer involved, "ATS [or Alien Tort Statute] claims are exploding - they're everywhere".
Sensationally, in the apartheid case, the three groups of plaintiffs - Khulumani, Ntzebesa and Digwamaje - unexpectedly won the right last month to take the matter back to the district court, from which it was originally dismissed in November 2004.
In the meantime lawyers for the defendants have now begun petitioning for a writ of certiorari, or judicial review, in the Supreme Court.
"The issue at stake as to whether a corporate can be held liable for the acts of a repressive government as a result of it doing business in that country are monumentally important," says a lawyer who prefers not to be named. "Take China: is every company doing business in China responsible for the repressive attributes of that government?"Cohen Milstein partner Agnieszka Fryszman rejects this point, claiming the suit was not aimed at companies doing business in South Africa, only at those that aided and abetted the apartheid regime.
"It's a qualitatively different matter selling goods in a country from contributing to human rights violations," adds Fryszman.
To read more of Matt's 'Byrne in the USA' blogs click here.