In the first of a three-part series, Kings of New York, Claire Smith meets three of the biggest names on the New York legal scene. This week, Whitney Pidot, Shearman & Sterling's managing partner – who intends to make Shearmans the greatest firm in the world
There must be very few managing partners who keep files called Inspirations locked in the top drawers of their desks. But for Whitney Pidot, at the helm of New York giant Shearman & Sterling, it somehow does not seem surprising.
The softly-spoken blue-eyed 56-year-old says his biggest worry is how to keep the lawyers happy, so that they keep on coming to work. As only Americans can, he talks in a string of enthusiastic, politically-correct clichés. And the file tucked away in his drawer, where no-one can get to it, is where he turns when he's not sure what to do.
“It's got things like articles by people who have left the law,” he says. “I have collected these things over the years and every now and then I get into new areas and I pull these things out.” It also contains notes from his children, a letter from his father and the job offer he got from Shearman & Sterling way back in 1968.
He would clearly give his life to the firm his father led him into. Despite the soft exterior, Pidot has picked up the knack of driving a hard deal, and has a reputation for getting the job done.
Practising in the bank finance and bankruptcy group of the firm, his biggest and most loyal client is Citigroup, with others including telecoms giant Cable & Wireless and investment bank Donaldson Lufkin & Jenrette (DLJ).
“Citigroup is probably our oldest client, and one that I have worked with a lot over the years, he confides. “I'm not allowed to say 'my client', it's 'our client', but I have worked with people there for about 20 years and I'm still the partner overseeing the relationship.”
With the group's headquarters located in the skyscraper next door to Shearman & Sterling in the heart of Manhattan, the relationship is a well-established one.
Citibank managing director Elliot Conway says Pidot may come across as a friendly pushover, but he always gets what he wants. “Whit and I worked on our first deal together in 1979. He helped us launch a more complicated side of our securitisation business,” he says. “Whit does the complex transactions, where there are so many ways you can get into trouble if you're not careful. He breaks it all down and makes it easy to understand. It's rare to find a lawyer who can both deal with the complex side of the structuring and then break it down for people who come in who weren't part of that. He's very persuasive. I have never heard Whit raise his voice, yet he will find a way to get what he wants. He's very congenial, a real gentleman.”
The greying Pidot clearly loves the thrill of the deal. Clients say he can always be contacted, and despite being a devoted family man will never turn his back on work at the weekend.
Since becoming managing partner in April 1998, he has refused to give up client contact. Instead, he gets to the office around 4.30am every day so that he can keep a hand in the big financing deals. One of his favourite deals was working on the financing of the film Titanic, one of the most complicated of its kind.
“I'm meant to spend 75 per cent of my time on management, 25 per cent on clients. It's actually 85 per cent management and 35 per cent on clients, and the rest of it is spent at home sleeping,” confesses Pidot. “Last night I was at a dinner reception with senior people from Citigroup. I was not practising law but we were discussing the firm-client relationship. I think I would lose my sanity if I only saw my partners and never saw a client.”
But despite his devotion to the deal, his main concern now is running the second largest law firm in New York. He is pretty confident that the top capital markets work will continue to give US firms an advantage over their UK competitors.
“We are beginning to wander on each other's turf and the distinguishing marks are disappearing. But the US capital markets in the Wall Street firms, the ability to do US securities, is a real edge. The UK capital markets has not been as globally significant as the ability to have a major name with the investment banks in New York. That is the advantage we have over UK firms.”
As a member of the firm's seven-lawyer international management committee, he says one of the hardest issues is deciding where the firm needs to increase its presence. But Pidot is anything but a soft touch for partners demanding new staff and new offices.
“The opportunities are so many that the difficulty is to know where, when and how to say no. We want to be very high end in the very key financial markets around the world. Partners are always coming to me and saying: 'Here's an opening in City X', but if it doesn't fit with our model we are not going to do it. It has to be strategic for the firm five years from now.”
In Europe, he boasts the firm's successes in London, Paris and Frankfurt, including advising Daimler-Benz as German counsel for its merger with Chrysler and working on the privatisation of Air France. But he readily concedes that Italy is still a market the firm needs to crack, among others.
“What I view as the hardest task of this firm today is the understandably desperate calls for M&A support to go to Paris, London and Silicon Valley. That's why we can't distract ourselves from the very high end. We do not simply want to be the local McDonald's.”
His role is central to making the firm work across the globe. And the clients know that making Shearman & Sterling great is his number one concern.
Thomas Murphy, managing director of DLJ, says: “He has a work ethic that was ingrained in him way back when. He wants to make the firm the great firm it is in the US in Europe, and he will work tirelessly to achieve it. He loves the firm, he loves the law and he loves the practice of law.”
Pidot's office and his meeting room next door are submerged under piles of unfiled documents. But if he looks disorganised, he speaks as though he has just finished reading the works of a leadership guru. He believes the young associates are the most important members of the firm and says he will do whatever he can to keep them happy: “I spent 30 minutes this morning sitting in a room with three associates. I just happened to do that because I ran into them as I was going to get my first cup of coffee.
“I do have direct contact and I think it's very important. As soon as you become too remote you lose the sense of what you are managing – if you have coffee with 20 or 30 over the course of a year the word gets out that you are accessible and you do get direct input.”
The firm has set up a mentoring system so that associates can tell the senior partners what they should be doing with technology. “I'm trying to get her [Pidot's mentor] to tell me how to use all this stuff,” says Pidot. “My guess would be that in the next major slowdown it won't be these youngsters that lose their jobs, it will be senior management.”
Pidot might be trying to break Shearman & Sterling's reputation for treating its associates as though they were workers in a sweatshop, but, according to Murphy, Pidot's commitment to the up-and-coming lawyers is completely genuine.
He says: “He's not a selfish transactor. Some high-profile lawyers have to do it all themselves, but he likes leading the associates and giving good work to the people who work with him. That's unusual and it makes for a good team.”
Pidot is clearly joking when he quips that he is feeling the strain of more than 30 years as a New York lawyer: “I'm 56. Twenty years ago that might have been a young partner starting out, now it's an old exhausted partner thinking about retirement.”
He likes to be out in front, and when it comes to the firm, Pidot has big plans and big ambitions.
“Historically, lawyers tend to drive our cars by looking in the rear-view mirror, a very dangerous way to drive. We are a business – a friendly business, a partnership business – but still a business.
“The large US firms may have consulting arms in 10 years' time. I can more readily see an amalgamation of a Shearman & Sterling – not the Shearman & Sterling – with a McKinsey before I could see an amalgamation with another law firm.
“Not that we are there, because we're not. The only thing that's clear is that nothing's clear. Age doesn't prove anything – we are 120 years old but that just means we are closer to death.”
But whatever is thrown his way, Pidot is unlikely to diverge from a management style based on consensus.
One partner says: “He's very popular – he talks the talk but he also walks the walk. He has been here all of his career and is sort of historic Shearman & Sterling, but he is very, very committed to all the things we are trying to do on a global basis.
“It's great to have someone who's absolutely Shearmans through and through.”