Cads’ lack of wads makes Link sink

Cads’ lack of wads makes Link sinkNot long ago I was chatting to a managing partner who’d been on that residential Harvard course for lawyers – the one that seems to be compulsory for most City partners.

UK and US lawyers mix, exchange experiences and come away full of the joys of leadership. But, this managing partner confided, the responses to the various law firm management case studies are split down depressingly stereotypical lines. Apparently, the issue that really gets the Brits going is cultural cohesion. With the Americans, it’s remuneration systems.

Which brings us neatly on to Cadwalader. If you thin this week’s lead story seems slightly florid, you don’t know the half of it – we’ve had to omit many of the juiciest details. Some of the conspiracy theories ­flying around the firm are positively Jacobean.

This factionalism within Cadwalader has been building up over the past couple of years – and it’s all about money. Cadwalader has been one of the most profitable firms on Wall Street for some time. Its strategy of making structured finance its core ­business was devised by current chief Bob Link, and for nearly a decade it was extraordinarily ­successful. The collapse of that market, which accounted for 40 per cent of the firm’s total revenue, has ­precipitated a cultural crisis within the partnership.

When it’s about money, collegiality at many US firms just walks out the door. Much of the internal tension at Mayer Brown came from its shake-up of partner pay. And everyone remembers Clifford Chance’s headaches in imposing lockstep in the US.

Cadwalader’s November plotters are all lawyers whose practices, until the credit crunch, had been mere adjuncts to the firm’s structured finance ­business. Now restructuring partner Bruce Zirinsky and litigation partner Greg Markel (to name just two) suddenly have the whip hand.

Link should have seen this coming. If you ­predicate your firm’s success on financial results and nothing else, then don’t be surprised if your partners rise up against you when profit drops.

And of course, Link himself engineered Cadwalader’s first palace revolt back in 1994 against the firm’s old guard. I think we can all see the irony.

Read The Lawyer in New York on Cadwalader here.

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