Ronald DeKoven interrupts our interview – which is taking place in a small and slightly gloomy conference room in the basement of his new home at 3/4 South Square’s Gray’s Inn residence – to bemoan the absence of coasters: “It’s not Freshfields or Allen & Overy (A&O) is it?” The US insolvency star is clearly still getting used to his new surroundings. “I love A&O,” he adds. “Everything matches – you know, the pencils, everything. It’s overwhelming.”
I am not sure I would go that far, but when you have spent 20 years running Shearman & Sterling‘s insolvency and leasing practice, being at any chambers, even The Lawyer‘s Chambers of the Year 2002 (until tomorrow night when the premier event in the global legal calendar, The Lawyer Awards, will announce its ninth set of winners) is going to require a period of adjustment. So why do it?
DeKoven has an A-list reputation in the insolvency world, a CV that boasts acting for the provisional liquidators of BCCI, the administrators of Barings and the Society of Lloyd’s of London, advising on the first of the so-called ‘double-dip’ cross-border lease financings and the drafting of Article 2a of the Uniform Commercial Code on Leasing (a six-year project). Surely his move to the UK would have tempted a host of firms with fledgling transatlantic insolvency practices to make him an offer?
Notwithstanding the lack of coasters and matching pencils, 3/4 South Square does hold one crucial advantage: freedom. DeKoven has known the set since the late 1980s, when he first worked with Michael Crystal QC, now joint head of chambers. But this was not a sentimental choice. DeKoven was attracted in part by the lack of administrative responsibility that tenancy entails. Principally, he just did not want to miss out on some juicy piece of work because of a conflict. Conflicts might not currently be such a problem for the profession in the UK as they are for practitioners in the US, where a much stricter attitude prevails, but DeKoven is not alone in believing that attitudes are hardening. Just ask A&O.
“As the large London firms develop large US practices, the lowest common denominator will rule,” says DeKoven. “Issues that previously would have been either ignored because they wouldn’t have been thought to present a conflict, or issues that would have presented a conflict but that could have been waived, will have to be treated differently because of London firms’ New York brethren. If that’s right, it will be of some advantage to me as an independent.”
One piece of work has already come through the door, with DeKoven advising on the US aspects of a major UK insolvency, with two other projects in the pipeline. While details of these deals are not forthcoming, DeKoven has an impeccable track record.
He began his career with academic aspirations, but his teacher and mentor at the University of Chicago, Professor Grant Gilmore, recommended getting his hands dirty for a couple of years first.
Four years at Sonnenscheins was sufficient to divert his attentions away from a life in academia. Refocused on the practice of law, DeKoven sought out a firm with an insolvency capability, at that time lacking in Sonnenscheins’ armoury. A brief stint at niche banking and insolvency firm Goldberg Weigel and, at 29, his skills warranted the offer of partnership. Jenner & Block had other ideas, though. It wanted to take the firm over, albeit not the youthful end of the partnership – at least not without those partners accepting a demotion to associate status.
“An inappropriate request,” was DeKoven’s reaction at the time. He tagged along with five or six of the other younger partners who were setting up on their own. Within two months, this new practice was presented with an opportunity to form part of a larger avant garde firm, Katten Muchin. At its launch in 1974, it consisted of two-dozen lawyers, but KMZ Rosenman, as it is now known, now boasts upwards of 600 lawyers.
By the time his mentor came back with the offer of a teaching post, DeKoven had assumed the helm of the insolvency practice and he declined, finding other ways to satisfy his interest in research by working for the Department of State. But with the 1980s looming, DeKoven was lured to New York and to Shearman. After six months of cogitation and due diligence, he accepted the firm’s offer and in the autumn of 1980 decamped, with his family, to New York.
DeKoven spent the next decade adding an international flavour to Shearman’s insolvency practice, which brought him regularly to the UK, France and Germany, and shifting its focus from specialising in acting for institutional lenders to acting for companies and liquidators.
During the 1990s, DeKoven worked non-stop, tying himself to a gruelling schedule of non-stop travelling and seven-day weeks. In the end he decided that it was not sensible to continue at that pace. Rather than take the pile of cash and run for the hills, DeKoven thought he would turn his attention to the internet, and so established an online company to trade in distressed debt. This began as a hobby, but quickly developed into a full-time project. He left Shearman, although not before tapping the firm for some investment, and in January 2000 ereorg.com was launched. Although this was his brainchild and was one of the first internet platforms to trade in distressed and bank debt, DeKoven resigned as chief executive in May 2000 and sold the company in 2001.
Subsequently, charity and other business interests have kept him occupied, but he is now ready for another project: the UK. So far he has had to juggle his time evenly between existing family and work commitments in the US and marketing activity over here. DeKoven has been filling what time he has had in London on a whistlestop round of lunches to announce his presence and re-establish contacts, many of which at the likes of Freshfields Bruckhaus Deringer, Slaughter and May et al correspond to the set’s existing cabal of favourite clients.
There are some obvious targets for the hard-sell. Take Jones Day Gouldens. The firm picked up Adam Plainer for its London office, but almost simultaneously lost two of the co-chairs of the restructuring group in the US, John Rapisardi and Richard Cieri. The firm Plainer left, SJ Berwin, might also consider a short-term let to bolster its now meagre insolvency offering.
For 3/4 South Square the rationale for bringing DeKoven on board stems from its international ambitions. Thirty per cent of its instructions already come directly from overseas, and as much as 60 per cent have some international element.
The set has made a big play on the spreading of its tentacles to foreign jurisdictions, hiring tenants based in Germany, France and South Africa. And while DeKoven will be based in the UK, he is by far and away the set’s biggest international signing to date. Inevitably this has meant encroaching on the territory of its paymasters, the UK’s magic circle and the cream of the US firms in London.
“This is a global open market, and that includes 3/4 South Square as much as it does Clifford Chance,” says the set’s defiant senior practice manager Paul Cooklin.
But Cooklin knows as well as Clifford Chance that, despite boasting one of the largest collections of insolvency expertise anywhere, his set just cannot compete with those firms that boast a truly international presence. The firm simply does not have either the administrative back-up or the ability to put together large teams at exceptionally short notice.
“There’s only so much we can achieve. I remain to be convinced that our set or any other could administer an all-round service like that provided by law firms. We have to be realistic about our limitations,” says Cooklin.
In other words, you have to be able to provide matching pencils before you can hope to compete with Clifford Chance.
3/4 South Square