Turnover:
$229m (£122m)
Managing partner: William Hartnett
Total number of lawyers: 275
Total number of partners: 69
Profit per equity partner: $2m (£1.2m)
Main practice areas: Leveraged finance, M&A, insurance (both litigation and corporate), tax, antitrust.
Clients:
Goldman Sachs, JPMorgan, Merrill Lynch, Salomon Smith Barney
Offices: Three
Locations: New York, Washington DC, London
Recruitment is a tricky issue for everybody. Even for a firm as profitable as Cahill Gordon & Reindel, the main challenge remains hiring enough talented young lawyers.
“It’s been a tremendous year for us as far as client demand for our services goes,” says the firm’s managing partner William Hartnett. “We have to make sure the partners have enough support for those kind of juggling acts.”
Examples of his partners’ legal sleight-of-hand include acting for Deutsche Bank and other underwriters in the acquisition of media company VNU by a private equity consortium.
This is pretty standard stuff for a firm that can boast “every major investment and commercial bank in the leveraged lending area” as clients, according to Hartnett.
The firm made the decision, which would be controversial in Europe, to move into both bank and bond lending.
“Our financial institutions and their clients like a seamless service,” explains Hartnett.
As a result Cahill is one of the top high-yield firms in the world. Half of the firm’s lawyers practise at least some leveraged finance, and the department contributed around a third of the firm’s $230m (£131.43m) revenue last year.
The figures back up Hartnett’s optimism. Cahill ranked second in AmLaw’s profitability index this year. Yet despite Cahill’s partners (they are all equity) being part of that exclusive club of US lawyers pocketing more than $2m (£1.06m) a year, this was a 6 per cent decrease on last year.
In a bull market, and compared with the likes of Cravath Swaine & Moore, which boasted a healthy increase in partner profit, that could be a worry.
But Hartnett seems unconcerned. “With a firm our size, if you’re on the losing side of two deals a year that affects the bottom line,” he says.
True, the all-equity partnership is relatively small at just 75 partners, but Hartnett claims that it is not jealously guarded. Six associates were made up this year and Cahill made its first lateral partner hire in 30 years by netting David Kelley from the US Attorney’s Office for the firm’s white-collar crime team.
Compensation is merit-based, although the phrase ‘eat what you kill’ annoys Hartnett, who is proud of the firm’s collegiate ethos.
Although he does not see a merger as likely, Hartnett disagrees that the firm is static. It is just not expansionist.
There are small London and DC offices or, as Hartnett prefers to describe them, “large presences with a small number of lawyers”.
Cahill uses referral networks of firms approved by Cahill’s biggest clients. In the UK that means magic circle firms, although London office partner Jim Robinson would not name names.
“We don’t see our strategy as being all things to all people,” says Hartnett. “But we would like to see more growth in certain areas, such as M&A and bankruptcy.”
And that means yet more trainees and associates joining. There were 40 this week, who will all be hoping for that $2m-plus partner salary.
