Musical Chairs: A Major Move Out Of Cadwalader
The revolving door spins again at Cadwalader, this time with a firm leader taking his leave.
You don’t often see law firm leaders leave for other opportunities. Lateral movement among rank-and-file partners is much more common. The (perhaps cynical) theory about managing partners and firm chairs and the like: they run the show, sometimes disproportionately for their own benefit, so why would they want to depart? You often hear grousing from service partners, or even rainmakers not in management, about firm leaders arrogating too much power and profit to themselves.so
In the past few months, though, we’ve seen a few firm leaders leave for other opportunities. For example, last September, Colleen Tracy, former managing partner of Fitzpatrick Cella, moved to Mayer Brown. That same month, former Fried Frank co-chair Valerie Ford Jacob sought greener pastures at Freshfields.
Today’s news of a departing Biglaw leader involves even more green. Here’s a report from Julie Triedman of Am Law Daily:
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Cadwalader, Wickersham & Taft announced Tuesday that James Woolery, poised to become chair of the firm this month after nearly two years as chairman-elect, is leaving to cofound a new investment venture. Patrick Quinn, Cadwalader’s managing partner-elect for the past year, is now sole leader of the storied Wall Street firm that made Woolery its highest-paid partner in early 2013.
How highly paid? According to a former Cadwalader partner who spoke to Am Law, when Woolery was lured away from his job as co-head of North American mergers and acquisitions at JPMorgan two years ago, he obtained a guarantee from CWT in the range of $8 million to $10 million per year for three years of service. Wow.
The model of Woolery’s new, $250 million hedge fund — which could be described as a kinder, gentler version of activist investing — is interesting. Michael de la Merced has a nice write-up over at DealBook. But we leave the world of hedge funds to our sister site, Dealbreaker; let’s focus instead on what this all means for Cadwalader.
Quinn, 51, a former cochair of Cadwalader’s capital markets practice and 26-year veteran of the firm, was appointed managing partner by Cadwalader’s eight-lawyer management committee over the weekend. Quinn informed the partnership of the changes in an email Monday.
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Interesting. An over-the-weekend appointment suggests that perhaps the news of Woolery’s move caught Cadwalader by surprise. And maybe it wasn’t entirely welcome news. From an analysis that lawyer and law firm consultant Edwin Reeser shared with us by email:
The firm and the departing chair elect will each survive this just fine, but you can’t be happy about giving somebody as a lateral candidate a guarantee of $8-10 million per year for three years and the reins to the future leadership of the firm…. and then have him bounce out for a “better opportunity” with a year left on the contract. There is obviously a deeper story, and it will be somewhat unlikely that outsiders will ever know what it is.
Clearly, attempting to buy into a capital markets M&A practice with a superstar recruit is not an easy thing to do for either the firm or the lateral partner, and with a core business practice that was not capital markets M&A, maybe less partner interest for the firm internally. It just may be as simple as a personality fit issue… lawyers aren’t likely to be excited with the arrival of ‘outsider as savior’. Why this was done in the first place is a big question, especially with the experience of losing their last big M&A hire with Dennis Block in 2011.
It may just be that two years back in the saddle at a major prestige practice law firm was enough of a reminder as to why he made the decision to leave law in the first place, or perhaps to discover why Dennis Block made his decision. The typical admonitions on the shortcomings of rich comp packages, guarantees, laterals, and such are noted. The nature of the new venture, and it is not a lateral move to an established company, could be an outlet for an entrepreneurial vision and energy that definitely would not be satisfied in the more traditional line in business or law. Or perhaps that was at this juncture the best option available. Wish them all luck, though as one of the more profitable operations out there, they seem to have plenty already.
Of course, that is just my opinion. I might be wrong.
The exact timing of Woolery’s departure might have come as a surprise, but the parting seems to be mostly amicable (unlike, say, Colleen Tracy’s). Cadwalader helped Woolery establish the new fund, Hudson Executive Capital, and Patrick Quinn gave gracious comments to Am Law about Woolery’s move: “This was an opportunity that came to Jim, a very unique opportunity. We’re glad for him, and we anticipate that our relationship with him will continue to be strong.” (Read: “You better send us lots of business to make up for bouncing early, Jimbo.”)
So perhaps Woolery left for “a very unique opportunity,” and Cadwalader is sad to see him go. But here’s another possibility: could he have been encouraged or even pressured by CWT to look for said opportunity? Assuming a management fee of 1 or 2 percent, a $250 million fund doesn’t generate that much income. Once you account for operating expenses and the cut going to Woolery’s co-founder, Douglas L. Braunstein, Woolery is unlikely to earn more than the $8 million to $10 million he enjoyed at Cadwalader during his first year at Hudson Executive Capital (unless the fund grows a lot or enjoys tremendous returns, or he has a lot of his own money in the fund).
Perhaps it’s not all about the benjamins. It’s interesting to see Woolery — who’s just 45, a babe by Biglaw leadership standards — striking out on his own. Given his entrepreneurial spirit, one can understand if he felt stifled at Cadwalader or his prior firm, Cravath (which he left in 2011 for the JPMorgan post).
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And it will be interesting to see what happens next at Cadwalader, which has seen a fair amount of leadership reshuffling over the past few years. We’ve posted on the next page a CWT source’s assessment of what the past few years have been like at the firm. If you’d like to share with us your thoughts on Woolery’s relatively brief time at Cadwalader and what his departure means for the future of the firm, feel free to email us or text us (646-820-8477).
(Flip to the next page for one insider’s interesting take on goings-on at CWT over the past few years.)
