International eye: US
28 November 2005
Gibson Dunn examines salaried-partner tier
Shearman overhauls NY banking and finance
Coudert continues disbandment
Kilpatrick downsizes City presence
US firms focus on NY expansion
Reed Smith and Greenberg Traurig hunt for US mergers
International roundup Coming up:
Europe: 5 Dec
Asia: 12 Dec
Europe: 9 Jan
US: 16 Jan
Gibson Dunn overhauls partnership
Los Angeles-based Gibson Dunn & Crutcher is considering intro- ducing salaried partners in an attempt to shake off the growing threat of the Manhattan elite.
As revealed in The Lawyer (21 November), Gibson Dunn has created a committee tasked with analysing whether to establish a non-equity or salaried-partner tier within the firm.
The review is part of an ongoing overhaul of Gibson Dunn's recruitment process, which aims to increase global leverage to three lawyers for every partner (as first reported in The Lawyer, 24 October).
This move would mean a significant shake-up for Gibson Dunn, given that it is one of the US's last remaining single-partnership firms. It also shows that it is taking the looming spectre of the Manhattan elite very seriously.
While Gibson Dunn recorded the highest profits per equity partner of the national firms (with an average PEP of $1.5m (£870m) for 2004-05), it ranked only sixteenth overall, falling far behind New York's heavyweights.
The introduction of a salaried partner tier and the increased leverage it should bring would hopefully go some way towards correcting this imbalance, making the West Coast firm vastly more attractive to lateral hires and existing partners.
Shearman creates single NY finance group
New York heavyweight Shearman & Sterling has overhauled its banking and finance capabilities, combining them into a single practice area in an effort to bolster profitability further above that of its national competitors.
The reshape, first revealed in The Lawyer (31 October), has seen the local bank finance, structured finance, and project development and finance groups combined into a single 50-lawyer finance group led by partner Bill Hirschberg.
The shake-up is being used as a pilot to raise revenues for the firm's 19 other offices globally. It is also expected to improve communication between the groups, helping cross-selling and ultimately increasing profitability.
However, it is not all good news for Shearman employees. The change also sees the roles of the office's three former practice area heads downgraded to the curious title of product area heads, reporting to Hirschberg.
Coudert continues to crumble
Coudert Brothers remains a hot topic of debate, despite the dead- line for the firm's break-up having lapsed earlier this month. Michelle Harpur, managing partner of Coudert's Australian arm, claimed that the firm would cease paying its staff as of 16 November, three months after announcing that its international network of offices was to disband.
The Australian offices formally parted ways with Coudert in time to meet this deadline. However, the winding-down process, both in the US and elsewhere internationally, appears to be taking longer than originally expected.
A three-month deadline was always an ambitious target given the size of Coudert's network and the fact that a furore still surrounds defunct US firm Brobeck Phleger & Harrison two years after it folded. As reported in The Lawyer (24 October), Brobeck's trustee and partners are still arguing about destroying the firm's documents.
However, the hiring frenzy for Coudert's personnel continues unabated, with Baker & McKenzie, DLA Piper Rudnick Gray Cary, Dorsey & Whitney, Duane Morris, Hogan & Hartson, Jones Day and Mayer Brown Rowe & Maw among the slew of firms to take on partners in the US alone.
But while Baker & McKenzie jumped to purchase Coudert's New York office lease - one of the firm's most valuable assets - associated work-in-progress and other assets for around $10.3m (£6m), this has not been enough to save Coudert from struggling to pay its debts. As first reported in The Lawyer (24 October), Coudert is estimated to owe JPMorgan Chase and Citibank more than $11m (£6.4m).
Kilpatrick Stockton downgrades London As first reported on www. thelawyer.com (19 September), the firm has decided to drastically downsize its London office after the executive committee realised that the UK practice it inherited from the defunct Altheimer & Gray does not fit with its core international business.
This is an odd revelation given that Kilpatrick is primarily known for its intellectual property, real estate and employment practices in the US, while the 14 partners and 25 lawyers it took on from Altheimer in London mainly focused on project finance, international trade, litigation and arbitration.
Since the announcement of the downsizing, much of the London-based projects team jumped ship to either US competitor White & Case or Shadbolt & Co. The moves pre-empt a campaign of compulsory redundancies to be implemented by Kilpatrick's US-based executive committee (as first revealed in The Lawyer, 7 November).
NY a focus for office openings
Many smaller US firms are taking a less internationalist approach to expansion by focusing on New York.
Houston-based Lanier Law Firm launched a Manhattan presence with four attorneys on 16 November (as first revealed on www.thelawyer. com, 16 November), aiming to eclipse its Houston headquarters within three years. A notable task given that the Houston office comprises 24 lawyers and 50 support staff.
Litigation powerhouse Jenner & Block launched in New York on 7 November with 15 lawyers. This marks the fourth office for the Chicago-based firm, which also has presences in Dallas, Texas, and Washington DC.
Florida's Akerman Senterfitt also aims to open Manhattan offices in December, with a target of recruiting 35 lawyers within a year (as revealed in The Lawyer, 14 November).
Merger search continues for Reed Smith
Following its French launch earlier this month, Reed Smith is now looking to expand closer to home. The Pittsburgh-based firm is stepping up its search for separate Texan and Chicago-based merger partners.
Miami-based law firm Greenberg Traurig similarly plans to consolidate its recent rapid growth by expanding into Austin, Texas, and Seattle, Washington State. The firm launched in Tokyo in April, but is now focusing on the US.
Greenberg already has offices in Tallahassee in Florida and Albany in New York State, but wants to launch in Texas in order to achieve its target of having presences in the capitals of the four most populous states in the US. The north west is the only other US region where the firm does not have a foothold.