Biglaw, Kasowitz Benson, Litigators

Kasowitz Benson's Benovelent Dictatorship

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We’re surprised that more people in the legal profession don’t know about Kasowitz Benson. The firm is relatively young by Biglaw standards — founded in 1993, as a spin-off from Mayer Brown — but very successful. Much of this success is traceable to the leadership of Marc Kasowitz, who continues to run the firm with an iron hand (even though it’s twenty times larger today than at its founding; it started with 18 lawyers and is now up to 350).

Earlier this week, Nate Raymond of the New York Law Journal took a detailed look at the Kasowitz firm. Let’s take a look at some of the highlights….

The piece begins by discussing Kasowitz’s lateral hiring coups. In January 2010, the firm brought over Robin Cohen and her insurance coverage team from Dickstein Shapiro, a 13-lawyer practice with a $20 million book of business. Also in January, the firm welcomed Marcos Daniel Jiménez, former U.S. attorney for the Southern District of Florida, who took over as managing partner of Kasowitz’s 11-lawyer Miami office.

Kasowitz Benson has a number of prominent partners, but Marc Kasowitz is still firmly in charge:

The firm has been able to move aggressively in large part thanks to Mr. Kasowitz, 58, whose control over the law firm carrying his name draws few comparisons. Almost all governance has been vested in Mr. Kasowitz, the firm’s chief rainmaker, who calls the shots on what are typically committee-driven decisions at other firms, particularly with compensation.

A few other firms have this type of dictatorial structure — one thinks of Jones Day, where the managing partner exercises great power — but it’s definitely the exception rather than the rule.

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Despite his management duties, Marc Kasowitz somehow manages to find the time to maintain his own very successful litigation practice. When he left Mayer Brown, he had a book of $20 million to $30 million — and today the number is even larger:

With clients including Celanese Chemicals Inc., Fortress Investment Group, MBIA Inc. and Fairfax Financial Holdings Limited, Mr. Kasowitz continues to lay claim to the firm’s largest book of business. A source estimated his clients’ billings were consistently north of $75 million, though Mr. Kasowitz declined to comment on the size of his business. Gross revenue at the firm overall last year was $226 million, up 2.2 percent.

Given the economic climate, an increase in revenue, even a small one, is good news. And the firm continues to expand in terms of headcount:

While the firm’s heart remains in New York, where it houses about 300 attorneys, Kasowitz Benson has gradually been growing outside Manhattan. In 2007, the firm expanded what is today an 18-lawyer San Francisco outpost through a merger with white-collar boutique Topel & Goodman, which had seven lawyers, including partners Marcus Topel and William Goodman. Last October, the office added employment litigation partner Brendan Dolan from Morgan Lewis & Bockius.

The Miami office that opened last year came through with the addition of the three name partners from an Akerman Senterfitt spin-off, Silverman Cosgrove & Sammataro, including Lawrence D. Silverman, the former head of Akerman’s litigation department in Miami. Another two Miami lawyers, Kelly Luther and Maria Ruiz, joined from Clarke Silverglate & Campbell, which had been the local counsel on Liggett’s Florida litigation.

Of course, this type of growth through lateral hiring isn’t for everyone. For example, older firms that pride themselves on having a very stable and unified firm culture would never take this approach (and might even deride it as déclassé).

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But unless and until Kasowitz Benson’s fortunes go south, it’s hard to argue with success. In 2009, average profits per equity partner for the firm came in at $2.08 million, for a #18 ranking in the Am Law 200. (This was a 6.2 percent dip from 2008, but Marc Kasowitz explains that it reflected the cost of hiring laterals and opening the Miami location.)

About halfway through the (rather lengthy) article, reporter Nate Raymond reaches the issue that you’ve been waiting to hear about: the firm’s reputation for taking a brass-knuckles approach to litigation.

If one word describes the firm’s lawyers, clients and adversaries agree it would be “aggressive.” David Brooks, general counsel for Fortress Investment Group, said “when there’s a tough, call it rough-and-tumble kind of litigation, those are the guys I would go to.”

“They’re not afraid to get their hands dirty,” he said.

Critics (including defeated adversaries) might say too dirty — but the firm counts at least one other hard-nosed litigator as a fan:

John Quinn, the head of competitor Quinn Emanuel Urquhart & Sullivan, said he sees nothing wrong with the way Kasowitz Benson pursues litigation, adding he would hire the firm if his shop were ever in trouble. Any complaints stem from Kasowitz Benson’s approach of not following “the conventional rules of how it’s thought law firms ought to behave,” he said.

“There’s a lot that goes on among major law firms that can only be explained, I think, by gentlemen being gentlemen, if you will,” Mr. Quinn said. “You scratch my back, I’ll scratch yours. I don’t mean to suggest there isn’t a role for that, I think there is, but those guys [at Kasowitz] are prepared to do what’s best for their clients, even if it means getting some other people’s noses in the bar out of joint.”

(A quick scan of John Quinn’s Twitter feed reveals no slaps at Kasowitz — unlike Squire Sanders and Orrick, recently on the receiving end of snarky tweets.)

The benevolent dictatorship of Marc Kasowitz extends to partner compensation, of course:

Only a handful of partners other than Mr. Kasowitz receive monthly reports on revenues and profits. Mr. Kasowitz provides a financial report to the rest of the partnership once a year at their annual meeting.

Mr. Kasowitz alone once a year also decides how much each equity partner will earn. For their first two to three years, partners earn a predictable and scaled amount, Mr. Kasowitz said. After that, “it’s very much a merit-based system.” He said his decisions are based on a number of factors, not just business generation but also success in court.

And perhaps how well-liked you are by Marc Kasowitz? But this is the way the firm has always been. If a partner doesn’t like it, he or she can always leave.

(Don’t let the door hit you on the way out. Does the name Jeremy Pitcock ring a bell? After the successful young IP litigator left Kasowitz — for Morgan & Finnegan, which tried to tout his hiring as a coup — Kasowitz issued a statement chalking up Pitcock’s departure to “extremely inappropriate personal conduct” (which the firm claimed was sexual harassment). The result was some ugly litigation between Pitcock and Kasowitz, which was concluded when a judge essentially said, “A plague on both your houses.”)

Right now everything looks peachy at Kasowitz. While most firms slashed their summer programs this year, Kasowitz firm brought in 18 2L summer associates in 2010, up from 14 last year. More importantly, the firm continues to pick up prominent lateral partners and big cases.

But like any organization with a dominant personality at the top — say, North Korea — one has to ask of Kasowitz Benson: What happens after the Great Leader is no longer around?

Kasowitz Holds Power Close As He Grows Firm, Lures Business [New York Law Journal]

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