For many US lawyers 2009 will be a year to forget. The aftershocks of Lehman Brothers’ collapse in September 2008 were still being felt in Manhattan at the beginning of the year. Indeed, the first two months of 2009 were arguably worse than the final two of 2008.
Long after this year’s Christmas parties have ended (assuming they have not been cancelled) February will be remembered as the month of mass layoffs. ‘Bloody Thursday’ – when one US firm after another announced job cuts that totalled 350 lawyers in a single day – has passed into infamy. DLA Piper alone shed a total of 180 redundancies, including 80 lawyers.
Another firm to announce severe cuts was Latham & Watkins, which shed 190 lawyers and 250 support staff from its global network.
Over in London, Cadwalader Wickersham & Taft, which had become one of the first firms to be associated with job cuts well before the avalanche hit, was on the receiving end of more bad news. Its London office lost a seven-partner team to Paul Hasting Janofsky & Walker in January, later followed by a total of 12 associates. Ultimately the departures left the US firm with just four partners and a team of four associates in the City.
But the beginning of the year was not all doom and gloom.
In late January Freshfields Bruckhaus Deringer snared a three-partner team from Covington & Burling and Willkie Farr & Gallagher to launch its first transatlantic litigation team (TheLawyer.com, 22 January). Freshfields’ launch demonstrated that there was at least some optimism in the market, despite the economic downturn. Indeed, New York saw several high-profile partner moves and bolt-ons throughout 2009.
Possibly most intriguing was Ashurst’s shock hire of an 11-partner team from structured finance boutique McKee Nelson in March (TheLawyer.com, 2 March). The move was an opportunistic one on the part of Ashurst, which had lacked an on-the-ground presence in the US since 2001.
The McKee hires signified the launch of a dual US strategy for Ashurst, which has now identified a shortlist of six US firms that it will use for its informal referral network.
In London several US firms continued to be equally bullish. In May Simpson Thacher & Bartlett made a rare lateral hire, snaring Clifford Chance corporate star Adam Signy to bolster its London office. Simpson Thacher has maintained a small London office focusing on its key relationships – notably Kohlberg Kravis Roberts (KKR) and Blackstone Group. Hiring Signy was a bold move and one that suggests the US firm is keen to expand its London capabilities.
The hire has already paid dividends. In September Signy teamed up with Simpson Thacher partner Farhad Karim to advise Blackstone on its joint venture with British Land, which sees the pairing acquire 50 per cent of the Broadgate estate for £77m.
In May Greenberg Traurig also shook up the London market when it launched an office in the City with former Mayer Brown co-vice chairman Paul Maher (The Lawyer, 15 June). The new office heralded a retreat from its longstanding alliance with Olswang.
Since its launch during the summer Greenberg Traurig Maher has secured a number of lateral hires, including White & Case capital markets partner trio Tim Jeveons, Andrew Croxford and Andrew Caunt in August; Kirkland & Ellis restructuring head Lyndon Norley in November; and Dundas & Wilson partner Ewan Robertson, who is set to join formally next year.
Greenberg was not alone in its London ambition. October saw the London launch of Boston-headquartered Ropes & Gray, which snared Freshfields finance partners Maurice Allen and Mike Goetz (The Lawyer, 22 October). Ropes’ London office is in part designed to capture European deals for longstanding clients Bain Capital and Texas Pacific Group.
Ropes’ London outpost got off to a flying start. Last month Goetz and new London-based partner Jonathan Bloom secured the firm’s first mandate since its launch, advising on the financing of Liberty Global’s €3.5bn (£3.17bn) acquisition of Unitymedia.
All in all 2009 has proved to be a turbulent year for US firms.
The widespread layoffs at the beginning of the year meant that optimism about the future was at an all-time low. The economic downturn, though, has presented opportunities on both sides of the Atlantic for those on the lookout. And now there are signs that confidence in an economic recovery is growing.
“US firms are still pretty nervous about expansion outside the US,” says one US partner. “But if confidence continues to grow in 2010, we could see more firms return to their international strategies sooner than we think.”