Greenberg tiptoes into Europe
16 February 2009
International expansion remains at the forefront of Greenberg Traurig’s strategy, in spite of the global recession. While the firm’s plans to conquer the European legal market may have been halted by the collapse of the economy, it is by no means off the table for the US national.
In fact, Greenberg’s new executive chairman Cesar Alvarez is more determined than ever to advance further into Europe. This expansion is likely to be via Greenberg’s increasingly close cooperation with UK and Paris-headquartered firm Salans.
Greenberg’s alliance with Olswang, formed in 2005, has given the US firm a foothold in the UK market. In return the arrangement has provided Olswang with increased exposure to international deals. But Olswang’s primary focus is on the UK. Now the Miami-headquartered firm has its sights set on Central and Eastern Europe, and Salans is the firm to help it achieve its goals.
“Salans is a firm that we’re getting to know,” confirms Alvarez. “We’ve been working with them now for two or three years. This gives us great opportunities in Central and Eastern Europe. We feel we’re definitely heading in the right direction with this relationship.”
But where exactly is that direction going? An Olswang-style alliance? The simple answer is yes – at least for now.
“We need to realise that conquering the international market is different to conquering the US,” admits Alvarez. “A merger of further strategic alliances may well be in the future for us in Europe.”
Salans and Greenberg have been working closely together on a number of deals in recent years. For example, in 2007 Salans’ Paris office worked alongside Greenberg advising on the French law aspects of Arcos Dorados’ purchase of McDonald’s regional franchises in Central and Southern America.
Greenberg has also proved it can be aggressive in pursuing its strategic goals. The firm has recently embarked on a lateral hiring spree, snaring the likes of restructuring star Bruce Zirinsky and Jon Bae from Cadwalader Wickersham & Taft and a three-partner and seven-associate team from Akin Gump Strauss Hauer & Feld this year.
“We’re opportunistic,” agrees Greenberg’s newly elected president Richard Rosenbaum. “While the economy is tough we’ve been able to take advantage of a lot of great opportunities for the firm. It’s an exciting time for us.”
Rosenbaum and Alvarez are confident firm leaders with a clear aim in sight – global domination. They are adamant that the downturn is a setback, but not a showstopper.
“In two or three years’ time we think we’ll see an increased presence in Europe,” says Alvarez. “But we have to turn to our US operations at the moment.”
Last year TheLawyer.com reported (28 October 2008) that Greenberg had hired the entire White Plains office (in New York State), including the firm’s vice-chairman Tom Leslie, of now dissolved firm Thacher Proffitt & Wood to launch an office in the state.
Deals such as this will help Greenberg achieve its ambition to cover the US. The argument then goes that clients, both domestic and international, will benefit from legal expertise in the majority of the country’s 50 states without the necessity of referring work to rival US firms.
It is a national strategy that has the potential to draw in international clients. But, like any strategy, it is not without its pitfalls.
“They really are a one-of-a-kind firm,” argues legal commentator Bruce MacEwen. “The question is whether they can continue to cohere as a firm as they continue with that model.”
Greenberg has 37 offices in total, five of which are in Europe courtesy of the firm’s strategic alliances with Olswang and with Studio Santa Maria in Milan and Rome. Cultural cohesion in an increasingly sprawling network is a challenge. Couldn’t throwing Salans into the mix make it even more difficult?
“If ;we ;want ;to ;advance internationally we have to consider merger and alliance options,” admits Alveraz. “We’re not a firm that’s grown like that in the US, but international markets are different.”
Alvarez seems to have a realistic attitude to the European legal markets. Cautious growth via alliance has worked well so far with Olswang and given Greenberg what it wanted in the UK.
“In the short term alliances are a safe option,” adds MacEwen. “In the long term people’s interests diverge and they tend to collapse, but they don’t have the complexity of a merger.”
Steering clear of potentially problematic transatlantic mergers is wise for Greenberg for the time being. An alliance with Salans while maintaining the status quo with Olswang looks like the safest option while the economy is in such turmoil.
“Things are on the backburner,” says Alvarez, “but we’ll continue to nurture our relationship with Olswang and pursue opportunities with Salans. When the economy recovers we’ll definitely be able to benefit.”
WilmerHale’s cautious approach pays dividends
In May it will be five years since the merger of Wilmer Cutler & Pickering and Hale and Dorr. As Bill Perlstein, one of the firm’s two managing partners, puts it: “It’s still a work in progress.”
The firm’s financial results for 2008 suggest that, while its progress may be slow, WilmerHale is getting there.
Both of WilmerHale’s Bills (the firm’s other managing partner is Bill Lee) say they were pleased with last year, which saw revenue inch up by around 1 per cent to $955m (£671.31m), average profit per equity partner (PEP) grow by
1.44 per cent to $1.08m (£759,000)and revenue per lawyer mushroom by 5.8 per cent to $1.3m (£914,000).
“One of the benefits of the merger is that the firm has greater breadth, depth and diversity of practice groups,” says Lee. “In the good times that means you don’t see increases as dramatic as at other firms, but it also means that when times are bad there’s a cushion.”
WilmerHale, proud to be known as a cautious and conservative firm, saw particular growth in its litigation and international arbitration practices last year (the Bills described Gary Born’s London arbitration practice as “spectacularly good” in 2008).
In the US the IP litigation and white-collar crime groups also performed well, while regulatory suffered a little last year thanks to what Perlstein described as “the paralysis in DC with it being an election year and very little regulatory activity from the SEC [Securities and Exchange Commission]”. It is unlikely that will be repeated this year.
Despite WilmerHale’s transactional levels being down, Perlstein said the firm was looking to add on the mid-market M&A side in New York and California
to focus on the firm’s specialisms of life sciences, technology and financial services.
“We’ll also be looking to add in London over the next couple of years,” Perlstein added. “We know we have to add in corporate.”
Financially, as well as in terms of its practice group mix, WilmerHale is well positioned to capitalise on the opportunities the downturn throws up. The firm has virtually no debt – around $40m (£28.12m) on $955m (£671.29m).
It is also one of the few US firms that paid bonuses this year and it has not cut salaries or staff. It has managed this partly by sticking to its watchword of ‘prudence’.
In the current environment, that is unlikely to change.