Was A&O’s Dan Cunningham’s exit perfect timing for all concerned? asks Julia Berris
Allen & Overy (A&O) partner Dan Cunningham’s defection to US litigation powerhouse Quinn Emanuel Urquhart Oliver & Hedges shocked Manhattan’s legal community earlier this month.
A high-profile figure in both the US and UK, Cunningham’s reputation as a corporate and structured products partner has been an invaluable asset to the magic circle firm as it sought to build name recognition stateside.
It is an interesting time for such a stellar name to jump ship.
A&O is in the midst of a global transformation and Cunningham’s defection comes just a month after the UK-headquartered firm announced plans to scale back its partnership and associate ranks dramatically, aiming to reduce both by 9 per cent (TheLawyer. com, 19 February).
But will Cunningham’s move damage the magic circle firm’s strategy in the US, or had his time at A&O come to a natural end?
“He’s a plateau partner and therefore very expensive,” says one former partner. “Yes, Dan’s done a tremendous amount for A&O’s US platform, but his practice area isn’t exactly thriving at the moment. It’s not as much of a loss as you might first think.”
Derivatives expertise is not as valuable during the economic crisis as it was during the boom period. Cunningham’s longstanding relationship with the International Swaps and Derivatives Association (ISDA) has been a catalyst for A&O’s growth in the US, but now the work in this practice area has slowed. Arguably, Cunningham’s niche is less relevant to the magic circle firm.
It is not the first time Cunningham has made a surprise move. In 2001 he became one of the first partners to leave a white-shoe New York firm, in his case Cravath Swaine & Moore, for a UK outfit.
Cunningham’s role, which was designed to help spearhead A&O’s US initiative, included leading the development of A&O’s IT company Derivatives Services, a venture Cunningham part owns. More recently Cunningham took up a position on the board of DocGenix, A&O’s latest IT derivatives documentation e-business.
“It’s not clear what will happen with Dan’s role in both of these projects,” says an inside source. “He’s been important in developing both of these projects, so it’s significant for them that he’s now left.”
Cunningham’s involvement has made it hard for other firms to penetrate the relationship with the ISDA. While magic circle rivals Clifford Chance and Linklaters have won instructions from the ISDA in recent years, A&O is still the main adviser.
“Cunningham’s been a big part of that relationship,” says a former partner. “I’m not sure if his departure will change that relationship for A&O, but it will be interesting to see how the firm responds.”
A&O recognised Cunningham’s contribution to the firm in a statement released last week: “We’d like to thank Dan for the extraordinary contribution he has made to Allen & Overy over the past eight years and wish him all the best for the future. His legacy at Allen & Overy includes transforming our New York office into a formidable competitor with the existing
top New York firms, and personally building our leadingcorporate/M&A practice and a market-leading derivatives practice in New York.”
The sun may have been slowly setting on Cunningham’s derivatives empire, but his position in the US corporate practice has been significant throughout his tenure at A&O.
Last year The Lawyer reported (8 April 2008) that Cunningham and partner Eric Shube led a team from the firm advising pharmaceutical giant Novartis on its $39bn (£26.65bn) acquisition of Nestlé’s eye-care company Alcon. The team worked opposite Cunningham’s former colleagues at Cravath, partners Alan Stephenson and Robert Townsend, who advised Nestlé.
While Cunningham’s prestige as a pre-eminent derivatives lawyer and Cravath alumnus made him a star hire for A&O, it has now done the same for disputes boutique Quinn Emanuel.
As a pure litigation firm, Quinn Emanuel’s move to hire Cunningham demonstrates a shift in the legal market and represents a new kind of role for the derivatives specialist.
“Dan has litigation experience, but his expertise in structured products is the main focus for us,” says Quinn Emanuel New York head Peter Calamari. “He’ll be working across our complex structured products group and restructuring group as we experience an upturn in litigation relating to derivatives and other structured products.”
Quinn Emanuel is known for its experimental culture and entrepreneurial approach to growth.
The firm’s aggressive hiring spree during the past year has seen it launch its first office in London following the hire of Kirkland & Ellis partner Richard East in April last year.
As a former Cravath partner himself, Calamari goes way back with Cunningham. The hire of the latter may be an experiment for Quinn Emanuel, but it is one that makes sense for both parties.
“This is where we see demand coming from,” says Calamari. “It’s something of an experiment for us, but one we’re confident will pay off.”