New administration tipped to rejuvenate legal market
It is not often we get to say this, but last Tuesday history was made.
For Pillsbury Winthrop chairman Jim Rishwain, the inauguration of President Barack Obama will go down as a defining moment in US history.
“It may be the most special event that will occur in the US during 2009,” Rishwain said.
Sullivan & Cromwell corporate partner Frank Aquila agreed, saying that “a new chapter” had begun.
All over the US, and of course in Washington DC, life virtually shut down for the massive celebrations surrounding Obama’s inauguration. He is clearly carrying a lot of people’s hopes.
“He has to do whatever it takes to get the economy moving again,” argued Sullivan & Cromwell partner Jim Morphy. “That’s the name of the game, getting confidence back. He’s got so many things coming at him from day one. But I think the critical thing will be attending to the stimulus package.
The regulatory changes can follow that.” As Morphy put it, you have to make sure the ship is floating before you start hanging the curtains.
As ever, a new administration is likely to herald heaps of work for lawyers. There should be plenty of it to go round as the new president rebuilds the US’s shattered economy.
Pillsbury, along with other firms with large energy practices, should benefit
from Obama’s arrival. Two weeks ago (15 January), the new president’s Democratic chums unveiled their blueprint for restarting the economy, with an $825bn (£599bn) package of tax breaks and cash injections that include special deals for renewable energy companies.
Elsewhere, the US government’s Troubled Assets Relief Programme will continue to offer some… er… relief to securitisation specialists, not least the group of former Thacher Proffitt & Wood lawyers now at Sonnenschein Nath & Rosenthal. If the government goes on buying a tonne of toxic assets, it is likely to be the likes of Thacher Proffitt managing partner Paul Tvetenstrand and co who benefit.
Inevitably, there will be more litigation.
As one US lawyer put it: “A Democratic administration is excellent for lawyers. It inevitably means tighter regulation and that automatically leads to increased litigation and antitrust work.”
The feeling was echoed by Skadden Arps Slate Meagher & Flom litigation partner John Gardiner, who said he expected more regulation and stricter enforcement, leading to an increase in advice “particularly to publicly listed companies, but also to unregulated entities that may soon find themselves regulated”.
Skadden litigation partner Jon Lerner summed up the mood. “This is as tough an environment as I’ve seen,” he said, “and people are tired of worrying about the economy.”
The hope is that last week’s events will trigger a change for the better.
FRESHFIELDS BRUCKHAUS DERINGER
Freshfields launches US litigation practice with NY trio
Magic circle firm Freshfields Bruckhaus Deringer has launched a US litigation practice after hiring a trio of partners from two leading US firms.
Aaron Marcu and Adam Siegel joined from the New York office of Covington & Burling, while Benito Romano arrived from Willkie Farr & Gallagher.
At Covington Marcu was coordinator of the firm’s white-collar defence and investigations group, while Siegel focused on the representation of clients facing government investigations and related civil litigation. Romano was chair of Willkie Farr’s white-collar criminal defence practice group.
Pointing out that Freshfields already has a US arbitration practice, chief executive Ted Burke said the litigation launch was partly in response to client demand.
He added: “We’ve been looking for quite some time to develop a worldwide contentious regulatory practice. We’ve had several clients advise us to do just that.
“Just as we’ve developed global capabilities in other practice areas, we thought we should do the same in litigation, especially because we’re seeing an increase in ;cross-border, ;multijurisdictional investigations and proceedings.”
At Freshfields the trio will launch a New York-based complex litigation and white-collar defence and investigations practice. The group’s main focus will be on Securities and Exchange Commission enforcement and federal criminal investigations.
Burke said the intention was to make further hires, but in the short term associates from the firm’s US arbitration practice would be able to assist the litigation team.
Although a lack of work has seen fellow magic circle firm Clifford Chance suffer layoffs and defections in its US litigation practice, Burke said he remained confident.
“There’s no such thing as a sure bet, but of course we wouldn’t do this if we didn’t think it was going to be successful,” he said.
US firms defy the downturn with healthy revenues
As more financial results poured forth last week, for once the news was not all bad.
It is probably stretching it to call it the ‘Obama effect’, although the feel-good factor permeating most of the US was out in force last week.
K&L Gates chairman and global managing partner Pete Kalis is unlikely to be too upset that his firm failed to break through the $1bn (£720m) revenue barrier last year. The 27 per cent increase in global revenue to $959.4m (£695.49m) is almost certain to be bettered in 2009 – in monetary terms if not growth terms. The firm’s latest bolt-on, Chicago-based Bell Boyd & Lloyd, should help, with the addition due to start counting towards the acquisitive firm’s fee income later this year.
Elsewhere, it was stunned silences in certain quarters as White & Case – yes, as in the ‘we are undergoing a permanent management overhaul’ White & Case – managed a 7 per cent revenue increase to $1.47bn (£1.07bn) despite all of its navel-gazing.
WilmerHale’s two Bills – co-managing partners Lee and Perlstein – were satisfied with twin increases in profit and revenue, even if they were in the region of 1 per cent each.
Not to be left out, Weil Gotshal & Manges had already posted a 4 per cent increase in revenue to $1.23bn (£890m), as reported on TheLawyer.com (20 January).
In a legal market continually rocked by layoffs, the positive results offered some reassurance that the sky had not fallen in quite yet.
Of course, this was just a small snapshot. The full US picture will not be known for a month or two, when all the major firms have closed their books and divvied up the cash.
Until then look to TheLawyer.com’s annual rolling US revenue counter. Like last year, we will be keeping track of the US firms’ figures as they unfold. It is, as ever, required reading.