Slaughter and May
New chief vows US strategy will not change
Slaughter and May’s US best friends have given the UK firm’s new senior partner-elect Chris Saul a unanimous positive endorsement.
One after another, the heads of some of the US’s top firms are spouting a variation on the theme that Saul, who takes over from Tim Clark at the end of April, will be a “wonderful” replacement.
Typical is Cravath Swaine & Moore presiding partner Evan Chesler. “I think it’s a wonderful choice and a great thing for Slaughters,” he says.
His comment is echoed by Simpson Thacher & Bartlett managing partner Pete Ruegger, who says: “Tim Clark has been wonderful to work with and Slaughters appears to have made another excellent choice. We’re big fans of Chris. He’s certainly someone we’re quick to call.”
The endorsements will be gratifying for Saul, although hardly unexpected. Slaughters has a long track record of working closely with some of the US’s leading, and most profitable, firms. As well as Cravath and Simpson Thacher, Slaughters works regularly with Davis Polk & Wardwell (managing partner John Ettinger says Saul is “a fabulous guy”), Sullivan & Cromwell (“just top-notch”, according to Sullivan’s presiding partner Rodgin Cohen), Wachtell Lipton Rosen & Katz and Paul Weiss Rifkind Wharton & Garrison.
All of Slaughters’ US relationship firms were tipped off about Saul’s appointment. And all will have been reassured that his arrival will signify no change whatsoever to the firm’s international strategy.
As Chesler puts it, no change in Slaughters’ policy is “consistent with what I know”.
Some 60 per cent of Slaughters’ work is international, which means building strong relationships with lawyers from overseas firms is a critical part of its business strategy. Indeed, under Clark these best friend relationships have flourished as a result of the firm making their development a central plank of its policy. “The key thing is being able to service our clients anywhere,” emphasises Clark.
Nowhere is more important to Slaughters than the US. In the early 1990s the firm maintained a small office in New York. This was the period when the UK-headquartered firms began thinking about hiring US lawyers to offer advice on New York law. Clifford Chance was first to take the plunge, followed closely by Linklaters.
“We thought about it and decided not to go down that route,” says Saul, who was Slaughters’ man in New York between 1991 and 1994 and is a self-confessed New Yorkophile.
Over the past five years Slaughters has moved slowly towards a more formal system of regular trips to the US, with Saul and partner Steve Cooke travelling at least twice a year to visit the firm’s key Wall Street companions.
“We gather intelligence and build familiarity,” says Saul. “We’ve been doing this for the past five years or so. Before that it was a bit more random.”
Saul is happy to confirm that his appointment as senior partner is unlikely to result in any shift in the firm’s approach to overseas work.
“We’re certainly not thinking about a return to New York,” says Saul. “The relationships we have there are incredibly important. We share a lot of clients with these firms and clients can see how close our relationships are when we go to see them together with our US friends.”
One of these best friends lets slip just how close that relationship can be. Now that Saul is on record as the man who wants to put the “fun” back into the law (www.thelawyer.com, 17 January), it seems only fair to ask Slaughters’ US best friends whether he has ever tried dragging any of them to a gig? Amy Winehouse at Madison Square Garden, perhaps?
“I haven’t been to a gig with Chris, but he’s given me a few CDs,” admits Simpsons’ Ruegger.
Slaughters: cementing inter-national ties with rock ‘n’ roll.
Reed smith’s equity to survive anderson kill captures
Reed Smith‘s recruitment of 55 lawyers last week from 126-lawyer New York firm Anderson Kill & Olick, announced last week (22 January), will add around $40m (£20.5m) in revenue to the firm on a full-year basis.
It sounds impressive, but with 25 partners joining on 1 February this works out at just $1.6m (£820,000) per partner. As one New York recruiter puts it: “I’m looking at moving a guy whose billings were down last year to $8m [£4.1m].”
The recruiter is clearly not overly impressed with Reed Smith’s latest New York deal.
“This is a bulking up,” she adds, claiming that the addition of 25 apparently low-billing partners could significantly dilute Reed Smith’s average profit per equity partner (PEP).
But Reed Smith managing partner Greg Jordan has not only managed to flip what started out as merger talks with Anderson Kill into the hire of a core group (after client conflicts derailed the original talks) – he and his team have brought in 25 new partners without diluting Reed Smith’s PEP.
“Not all of the partners are joining as equity,” Jordan confirms. “We don’t disclose how many are and how many are not, but I can say that we expect our PEP to be higher in 2008 than in 2007 and that we’ve structured this deal so that it’s not dilutive of PEP.”
There can be no argument about the bulking up comment, at least. Last November, www.thelawyer.com (5 November) reported that Reed Smith had taken additional space in its Lexington Avenue offices in preparation for the hire of significantly more lawyers. At the time Jordan said the next six months would see Reed Smith become “materially bigger” in Manhattan.
The Anderson Kill deal certainly moves the firm forward in achieving that aim. The new lawyers will strengthen several of Reed Smith’s groups, including insurance recovery, commercial restructuring and bankruptcy, financial services and commercial litigation.
The team features 25 partners, three counsel and 27 associates and includes firmwide president and CEO Jeffrey Glatzer and co-chair of Anderson Kill’s antitrust group Lawrence Kill.
In reality, the deal – one of the worst-kept secrets in New York – is not only a reflection of Reed Smith’s ambition, but more evidence of the remarkable negotiating skills of Jordan. Jordan is largely credited with securing the hugely profitable Hong Kong arm of Richards Butler, part of one of two mergers the firm struck last year, the other being with Chicago’s Sachnoff & Weaver.
Now Reed Smith is on a roll in New York – and it is not finished yet.the blog
This wait is killing me
Splits are often said to be ‘amicable’. Let’s hope it’s especially true for the lawyers at Anderson Kill & Olick.
On Tuesday (22 January) we reported that the ever-growing international juggernaut that is Reed Smith was taking 55 lawyers from the 126-lawyer New York firm.
And it is. Just not yet.
Although the Anderson Killers are now Reed Smithers, they don’t actually get the keys to their new firm’s Lexington Avenue offices until August at least. The space isn’t quite ready.
So until then they’ll be staying put at the old Exxon building at 1,251 Avenue of the Americas. One floor above the other, the former colleagues will have plenty of time to practise their forced grins in the lift before making their move across town. Let’s just hope they don’t Anderson Kill each other first.
Aside from the geographical aspects of the deal, we can also shed a little light on its financial structure. Anderson was a professional corporation rather than a firm, meaning the full equity partners were known as equity stockholders.
There were 25 of these in total at Anderson, of whom 17 are joining Reed Smith. Of these, around two-thirds are joining as full equity partners. Coincidentally, the total of new partners joining Reed Smith is also 25, around 12 of whom were equity stockholders at Anderson. The balance falls into Anderson’s two other categories (income stockholders and stockholders).
Confused? The upshot is around 12-15 partners will be joining Reed Smith’s equity. And I have it confirmed that they don’t have to wait until August.
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