The partners of Wall Street’s fifth most profitable firm have revolted against their managing partner following a disastrous year that has seen their core markets collapse.
Cadwalader Wickersham & Taft managing partner and former chairman Bob Link will be removed from the management committee in an extraordinary meeting this Wednesday (19 November). He will remain as a partner at the firm.
A Cadwalader partner said: “Bob has to be the fall guy. His strategy failed and he has to go.”
Link pulled the firm up to Wall Street’s heights by focusing on capital markets and real estate finance, but the firm had no hedge when those markets declined. Partners ;are ;bracing themselves for a profit drop of more than 50 per cent following the demise of clients such as Lehman Brothers and the collapse of the firm’s core business.
That prospect has caused bitter infighting among senior partners, who are looking to protect their interests. Two of the firm’s most senior figures, head of litigation Greg Markel and $60m (£40.47m) rainmaker ;Dennis ;Block, ;are believed to have threatened to ;leave ;unless ;their demands were met.
The power battle has also resulted in real estate finance partner and managing partner of the firm’s Charlotte office Jim Carroll stepping down from the committee. Link and Carroll will be replaced by co-heads of restructuring Bruce Zirinsky and Deryck Palmer – a symbolic move that signals a real change of focus.
Chairman Chris White has been a close ally of Link, but after taking soundings from partners over the past two months it was decided that drastic action was needed. The firm brought forward the committee changes by a month because of the unrest at the firm.
Cadwalader ;is ;also anticipating a number of partner exits as it attempts to address the leverage problem caused by 131 redundancies earlier this year. The partner cuts are expected to come primarily in the real estate finance and capital markets groups – now global finance – and will take place early next year.
The ;departures ;are thought to be linked to a restructuring of the profit-sharing system, which will see up to a dozen partners’ profit shares cut.
Cadwalader declined to comment.