DLA Piper: The shining star” />Twenty minutes into the interview it dawned on me why I felt I’d seen DLA Piper’s global chair of corporate and finance Roger Meltzer somewhere before: he’s a dead ringer for Jack Nicholson.
Now, don’t get me wrong, it’s more about the energy than the face, although occasionally there was something disturbingly “here’s Johnny” about the eyes. And that’s a good thing. DLA Piper is going to need all of Mad Jack’s exuberance and legendary powers of attraction if his doppelgänger is to achieve the firm’s corporate ambitions.
Meltzer joined DLA Piper six months ago from New York’s Cahill Gordon & Reindel, where he was a member of the executive committee and a partner in the corporate practice group. Since arriving at DLA Piper he has embarked on an aggressive growth strategy aimed at creating, in the words of DLA Piper’s joint CEO Lee Miller, “a world-class corporate practice”. So, The Lawyer went to meet Meltzer to find out exactly what “world class” means in DLA Piper land.
A few good men
Since 1 August, DLA Piper has hired 19 corporate partners. The highest-profile group was September’s five-partner haul from Winston & Strawn, headed by private equity specialist Steven Napolitano, who is now co-chair of DLA Piper’s US private equity group.
The same month also saw Drew Chapman arrive as chair of the fund services group from Sonnenschein Nath & Rosenthal and Jack Kantrowitz come on board from Sidley Austin, both in New York. Outside the US the firm took on Stephen Peepels from Jones Day in its Singapore office.
The most recent hires came just last week, when DLA Piper took on another four partners, this time primarily in Washington DC from Alston & Bird.
By any standards, this is a phenomenal growth rate, particularly if you consider that on average the negotiations for a partner hire can take around six months from start to finish. Meltzer hasn’t been hanging around.
“I took a year,” Meltzer deadpans, when asked about his own hire.
He is resplendent in a blue and red-spotted bow tie and leans back insouciantly on his chair when talking in DLA Piper’s New York offices. Meltzer professes not to like interviews, although I think he means with journalists. He’s certainly been doing a lot of interviewing lately. Last week’s hires are unlikely to be the end of the spree as he looks to build corporate strength not just in New York, but around the globe.
“New York is critical, but it’s not what this is all about,” he says. “It’s a centre of the financial world, but not the centre. But we have to be prominent in it, as well as in Asia, the Middle East and the Eurozone. The firm had reached this conclusion before I got here.”
Meltzer points to DLA Piper’s hires in Chicago, Palo Alto and Phoenix as examples that back up this contention. But it is the firm’s ambitions in New York that have caught the imagination. Just what does “world class” mean? Does DLA Piper seriously believe it can challenge the Wall Street titans of Cravath Swaine & Moore, Simpson Thacher & Bartlett and Sullivan & Cromwell?”This is not a raid on Wall Street,” admits Meltzer. “It’s an approach to like-minded people.”
And it’s an approach that has so far found favour with an increasing number of lawyers. At its heart is DLA Piper’s global model, coupled with the undeniable momentum and entrepreneurial flair that flows from its leadership triumvirate of Frank Burch, Miller and the UK’s Nigel Knowles.
It’s a style that even rivals admit is attractive. Although one New York corporate partner can’t resist a dig, saying: “[DLA Piper] would naturally be looking to build corporate practice in mid-market M&A because that’s what they do elsewhere. I suspect that’s achievable.
“It’s not terribly difficult in that strata of the market – there may well be a fair amount of appetite for movement in that tier of the market.”
Others are even less charitable, with one source saying: “They can hire as many lawyers as they like, but it’s not about quantity, it’s about quality. If they just hire a bunch of third-tier people they’ll just become a bigger third-tier firm. This spree will give them more bench strength in New York, but that’s it.”
The comment brings us back to the key issue: is this about DLA Piper taking on the mid-market or genuinely building a “world-class” group capable of pitching for the biggest deals?”None of these comments surprise me, nor am I offended,” says a sanguine Meltzer after hearing them read back. “Some of them I agree with, axiomatically. But you just keep pushing the envelope. Also, remember, these are rival firms. They’re being defensive, naturally. There’s also a piece of this that’s very important and appealing. Relationships change, people move.”
In other words, nothing lasts forever. DLA Piper likes to think of itself as the new kid on the block in terms of the global legal market and can lay claim to being the most recent product of a major cross-Atlantic merger. Arguably, it has less baggage than any of its competitors. It also has a small group of strong leaders, a genuine global platform and undeniable momentum, an attractive pitch for potential partners. Yet to many it remains a journeyman firm, stuck in the mid-market.
Meltzer claims that the new arrivals in his group have already gained DLA Piper enough momentum to get on the approved list of a number of clients.
“Maybe not top three, maybe not removing Sullivan & Cromwell, but over time we’ll end up doing a significant piece of the work,” he says. “We’ve already gained more traction with a number of investment banks as a result of these hires. People have agreed to use us in the past six months that hadn’t before.”
Although Meltzer refuses to divulge client names, he says the “mid-market” his group is targeting are funds in the region of $500m (£245.03m) to $1.5bn (£735.10m) and M&A (in what is a pretty wide definition of the mid-market), from $500m to $3bn (£1.47bn).
“And you never know when one of those is going to turn into a global client,” he adds.
As one Wall Street stalwart puts it: “DLA Piper is right to look at the mid-market. It would be extremely difficult to crack the top of the market. I can’t recall ever seeing them on the other side of a deal.”
So that, in essence, is the strategy. Not unlike the dotcom days when firms took punts on start-ups on the off chance they’d turn into the next Google, Meltzer is targeting smaller deals in the growth and emerging sectors by “constantly paying attention to the pools of capital” among the hedge funds, private equity and investment banks.
“If you asked Schulte Roth [& Zabel] 16 years ago if they thought Cerberus would be buying GMAC or Chrysler, they’d say ‘are you kidding?’,” continues Meltzer: “that’s what I mean about taking opportunities when you find them. Legal services are delivered differently than they were 15 years ago and they will be delivered differently in another 15 years.
“Asia and the Middle East are enormous opportunities and very few firms are investing the time or capital, or are prepared to take the risk.”
No wonder the energetic and entrepreneurial Meltzer was headhunted by DLA Piper. He’s a lawyer in Knowles’ image.
The rebel rouser
Meltzer’s hire was a genuine coup for the firm. Of all the corporate partners the firm has taken on in the past six months, his is the name that caused the biggest stir. No less a figure than Dewey & LeBoeuf’s legendary corporate star Mort Pierce endorses him.
“Roger’s a very good guy and those guys [DLA Piper] have come a long way in a relatively short period of time,” says Pierce. “The people leading things in this country, Frank Burch and Lee Miller, have formed a very good team and have brought the organisation along a very long way. And guys like Roger are very, very capable.”
Meltzer also knows exactly what he’s doing with DLA Piper, and it can be summed up in one word: Latham.
“I look at Latham [& Watkins] and I say to myself, here was a firm that came to New York 20 years ago, yes with a juggernaut client [Drexel], but by being awfully smart came up with a pretty good model,” says Meltzer. “If we can be as successful as they are, we’ll be doing just fine.”
Meltzer is ready to admit that there’s a lot of hard work to do before DLA Piper can genuinely be considered in the same bracket as Latham, never mind the Wall Street elite he professes not to be targeting. Culturally, it’s always going to be difficult to blend such a large group of incoming laterals.
As one Wall Street partner puts it: “When times are good then this kind of strategy can work, but when times are not so good and making money is the only real objective then if it [the money] is not there, the partners aren’t going to be there either.”
Talking of which, DLA Piper’s revenue per lawyer, at $755,000 (£370,000) for 2006 in the US, was half that of Sullivan & Cromwell’s $1.56m (£765,000), although it was in touching distance of Latham’s $920,000 (£451,000).
Profitability is, of course, a whole different game. Until DLA Piper can dramatically increase its average profit per equity partner (in 2006 the US figure was $1.12m (£459,000), dropping to $700,000 (£343,000) as an average for all partners), it has no hope of attracting rainmaking tier-one M&A partners. But it’s no easy task to dent Meltzer’s gusto for the task in hand.
“In reality, the revenue per lawyer figures are a work in progress,” he says. “The numbers are going to go up, although not from $750,000 [£368,000] to $1m [£490,000] in a year. But, look at Schulte. My guess is the figures [for the leading firms] will flatten out over time and we’ll close the gap.”
For DLA Piper, this may be as good as it gets.