30 October 2006
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US firms seek credibility with public officials
Public officialdom has always been a happy hunting ground for US firms, and Los Angeles firm Gibson Dunn & Crutcher has upped the ante, luring two partners in as many weeks from public offices.
First came Maurice Suh, a deputy mayor of Los Angeles. He oversaw the city's office of homeland security, a new position that mayor Antonio Villaraigosa created in July 2005.
He joined Gibson Dunn as a litigation partner with a focus on white-collar crime and will work with Robert Bonner, another Gibson Dunn hire from civil service, who is head of the firm's homeland security practice, which was launched 11 months ago. Bonner actually rejoined the firm after a spell as a federal judge and head of the US Customs Department. A week after Suh's hire, the West Coast firm announced it would also be taking on Debra Wong Yang in January. Yang is currently a Los Angeles-based US attorney at the Department of Justice's corporate fraud taskforce and will co-chair Gibson Dunn's crisis management team, which will handle independent investigations for beleaguered companies.
Gibson Dunn is not the only firm to employ such tactics. Mayer Brown Rowe & Maw (MBRM) has also taken on a few choice officials ahead of its push into China (see below), including Mickey Kantor, the ex-secretary of commerce. MBRM even extended the trend to include Chinese functionaries, taking on Wenzhao Wang, a former official from the Chinese ministry of foreign affairs.
While they do not deliver a client base, US firms believe that former officials lend gravitas to a firm. In the case of Gibson Dunn, it now has the capability to offer expertise in homeland security issues and the stock options backdating scandal that is currently preoccupying corporate America.
And there are certain incentives for functionaries to choose a second career at a law firm, not least the salary. Suh made $130,000 (£69,900) a year as deputy mayor. Average profit for Gibson Dunn's 253 equity partners was $1.64m (£869,000).
Wilson Sonsini rides probe fallout
Silicon Valley firm Wilson Sonsini Goodrich & Rosati has had a busy couple of months.
First came name partner Larry Sonsini's involvement with Hewlett-Packard (HP), which is suffering the fallout from an internal investigation that used fraudulent methods to get to the bottom of boardroom leaks. Sonsini was chosen as outside counsel by HP's outgoing general counsel Ann Baskins. Both Sonsini and Baskins had to give testimony to a House Committee in September.
If that was not bad enough, a recent survey by governance think-tank Corporate Library into the federal probe of stock-options backdating in tech companies has shown how many ties existed between these companies and Wilson Sonsini lawyers. Links include personal investment by Sonsini and other partners in companies they were representing, as well as their sitting on company boards. The firm maintains that there were never any conflict issues and called the innuendo suggested by the study as "false and irresponsible".
There was good news for the firm, though. It scored a lead role on Google's $1.65bn (£883m) acquisition of video-sharing website YouTube, but had a decision to make because both companies were clients. Significantly, Wilson Sonsini represented Google on its $2.7bn (£1.4bn) IPO two years ago. In the end, the firm plumped for YouTube, with corporate partners John Sheridan and Michael Ringler leading.
Linklaters, on the other hand, chose a more traditional route to beefing up, plundering White & Case for a team of 16 lawyers that included the magic circle firm's new regional head of litigation Larry Byrne. Byrne, together with 12 associates, came from White & Case with litigation partners Joe Armao, Lance Croffoot-Suede and Paul Alfieri.
All four partners joined White & Case in 2002 from what was Squadron Ellenoff Plesent & Sheinfeld prior to its merger with Washington DC firm Hogan & Hartson.
Byrne's role as practice head was vacated by Paul Wickes, who since 2004 has been juggling the job with his role as US managing partner. He is now going to concentrate on management.
Wickes, who founded Linklaters' US litigation department, joined from Shearman & Sterling in 2003, bringing with him two other litigation partners and a senior associate.
His arrival at the firm marked a watershed moment. UK firms in the US no longer saw a decent litigation capability as a hindrance to a potential merger with a US firm.
Both the US firms in question have provided a handy training ground for Linklaters over the years. Its former New York office head Marianne Rosenberg came from White & Case in 1998 and Shearman's co-head of the securitisation and derivatives group Gary Barnett was hired in 2004.
O'Melveny, Paul Hastings look for Chinese might
US firms were also battling it out in China and Hong Kong for prestigious lateral hires. Paul Hastings Janofsky & Walker raided O'Melveny & Myers for Hong Kong-based corporate specialist Basil Hwang, making him partner. The firm's Hong Kong office chair Neil Torpey told The Lawyer: "We're trying to expand the team as much and as quickly as possible with suitably talented people."
Paul Hastings' hire of Hwang followed that of leveraged finance specialists Brett King and Susan Thom from Milbank Tweed Hadley & McCloy in February.
Meanwhile, MBRM confirmed that it would be opening a Hong Kong office. This will be its first true office in China or Hong Kong as opposed to consulting offices, such as the firm currently offers in Beijing and Shanghai. The launch is subject to a successful licence application.
MBRM is parachuting in London-based corporate partner Stephen Bottomley, but the firm is looking for a significant lateral hire in Hong Kong before the end of the year.
The news comes two weeks after a new tripartite management was announced and a week after the transatlantic giant announced that it would be shaking up its partner compensation to a more collegiate, UK-style, points-based system to foster global expansion.
Age no barrier to Obermaier and Martin reunion
It was one in the eye for age discrimination when two septuagenarian former US attorneys left Weil Gotshal & Manges and Debevoise & Plimpton this month to start up their second litigation boutique together. Their first effort, Martin Obermaier & Morvillo, became one of the US's first specialised white-collar crime firms. "It's two old guys trying to relive their youth," said Otto Obermaier, who left his job as a litigation partner at Weil to set up shop with old pal John Martin.
Martin billed $1,000 (£534) an hour at Debevoise as of counsel, where he released an investigative report ordered by pharma company Merck's board into how claims against pain medication Vioxx were handled.
The new boutique, called Martin & Obermaier, will focus on arbitration and white-collar litigation.