Winners and losers
10 October 2008
Where there's a loser, there's usually a winner. So far in credit crunch terms, most of the winners are hard to pinpoint. But in the aftermath of the collapse of Heller Ehrman, the most successful vultures are already making themselves known.
Yesterday (9 October), Orrick Herrington & Sutcliffe became one of the biggest beneficiaries of Heller's demise when it snapped up a 27-partner, multi-office and multi-practice area team.
The speed with which things are unravelling generally stateside was encapsulated in this latest story. Orrick's Thursday morning press release originally said it was a 26-partner team that was joining. By early afternoon a 27th - antitrust partner Jonathan Palmer - had also come on board.
Palmer is in good company. Orrick's hires include former Heller chairman Barry Levin, Robert Rosenfeld, Heller chairman from 1993-99, and Larry Popofsky, co-chair of the firm from 1988-93.
In total, eight former Heller practice group leaders have joined Orrick, a group that includes Edward Henneberry, former co-chair of the European practice group. The largest single practice group is antitrust, where Orrick has taken 13 partners.
Yesterday Ralph Baxter (pictured), chairman and CEO of Orrick, told The Lawyer that the number of former practice group leaders and management members his firm has brought on board was commensurate with its growing scale.
"We're not just looking for people to gain more practice capability," Baxter said. "We're also looking for people with the characteristics of demonstrated leadership."
Earlier this year The Lawyer quizzed Baxter about Orrick's apparent lack of growth since its aborted merger talks with Dewey Ballantine. For Baxter, the Heller deal, hard on the heels of Orrick's merger in Germany with Hölters & Elsing, was the perfect response.
"By the time this year ends Orrick will have added around 80 new lateral partners that we have hand picked," Baxter said. "At the start of the year we had around 330 partners, we'll have well over 400 in January. That's 25 per cent growth. I call that making your actions consistent with your words."
Baxter was candid that this level of growth will come at a financial cost to Orrick.
"This year we have seen an unusual number of opportunities," Baxter admitted. "If that growth means our income or profitability is dampened this year, which it will be, then so be it. You don't see that many moments like this. It is a clear binary choice. Either you hunker down and make your profitability all it can be, but stop making investments, or you make those investments when you can and elevate the long-term interest over short-term activity. This is a long-term strategy."
Baxter also said that the firm's continued growth in major financial centres such as New York - which will top 300 lawyers this year - and Paris is having a knock-on effect for Orrick's growth ambitions in the City.
"Every time we strengthen in one of our offices in the world's financial centres it makes it more likely we can grow in London," Baxter said. "It gives us more credibility."
Baxter refused to be drawn, however, on speculation that Orrick was due to decamp shortly from its base in Tower 42 to new and larger offices on Cheapside.
"We haven't signed anything with anybody," Baxter insisted.