Mergers and Acquisitions, Musical Chairs

Musical Shockwaves Chairs: Skadden Rainmakers Defect to Kirkland & Ellis

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When the New York Times stands up and takes note of law firm partner defections, you know you are talking about the kinds of people who are capable of making rain in the Kalahari:

David Fox and Daniel E. Wolf, two top partners at the New York law firm of Skadden, Arps, Slate, Meagher & Flom, have defected to Kirkland & Ellis in a move likely to send shockwaves through the Wall Street legal world.
The loss of Mr. Fox, 51, who was among the highest-paid lawyers at Skadden, is a blow to the firm, where revenue has fallen across nearly all practice areas. A prominent mergers-and-acquisitions lawyer, Mr. Fox is leaving after more than 20 years with the firm, founded in 1948. It is rare for an established firm to lose such a senior lawyer to a less-known rival, and the move is the first time a partner in Skadden’s New York M.& A. practice has jumped to a competitor.

A “less-known rival”: were Kirkland & Ellis attorneys able to hear the compliment over the crack of the back of the NYT hand?
After the jump, the Times makes it sound like Skadden just lost Arps, Slate, Meagher and Flom.


Could this be a sign of a larger seismic shift in the top corporate firms?

The loss of two noted partners, who together generated tens of millions of dollars in fees annually for Skadden, could signal a broader shift in the corporate legal landscape as lawyers at large full-service firms leave for more focused, profitable shops. Last year, Kirkland generated about $2.47 million in profit for each partner, a closely watched measurement, compared to $2.07 million in profits per partner at Skadden, according to The American Lawyer, an industry magazine.

But wait, the Times throws some more gasoline on any bruised egos walking the halls of Skadden this morning:

Kirkland bills itself as younger and more entrepreneurial than some of its long-established competitors, which also attracted Mr. Wolf and Mr. Fox. The firm is also more focused on specific profit-producing areas like M.& A. and bankruptcy, while bigger firms like Skadden, Jones Day, and Latham & Watkins offer a vast swath of legal services.
These legal superstores have been cutting costs as business dries up across several practice areas. This year, Skadden offered to pay its 1,300 associates a third of their base pay not to show up at work in 2009.

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Wow. I don’t know about you, but when I read the word “superstore,” in my mind’s eye I see the aisles of a Costco. The word does not connote one of the elite law firms in the nation.
One Skadden client — Mark Gerson, Chairman of Gerson Lehrman Group (GLG) — had this to say about the move:

Now the Kirkland partners know what Jacob Ruppert must have felt like in December of 1919 — if he had signed Gehrig then as well as Ruth. David and Dan embody the very best qualities of their profession — intelligence and wisdom, sensitivity and discretion, careful attention to the details of a transaction while always acting strategically to serve its larger purpose. This is why there are so many global business and political leaders who consult David Fox with such frequency — the unique combination of gifts he offers his clients and friends comes along once in a generation…if that generation is lucky.

Yeah, but what if Harry Frazee had bought Ruth and Gehrig away from the Yankees for the Red Sox? Is Skadden planning a revival of No, No, Nanette?
Congratulations, Kirkland & Ellis. We expect K&E commenters to tell us all precisely what “victory” tastes like in the morning.
In Sign of Industry Shift, a Legal Giant Loses 2 Top Partners [New York Times via ABA Journal]
Earlier: Musical Chairs: O’Melveny Litigation Rainmaker Moving to Skadden

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