There’s no contest today for Lawyer of the Day honors. The clear winner is Matthew Kluger, a former associate at three leading law firms, who has been charged in a massive insider trading case. Kluger stands accused of reaping more than $32 million in profit over the course of a 17-year conspiracy, which also allegedly involved a trader, Garrett Bauer. (Kluger and Bauer might not be as big as Raj Rajaratnam, who’s pretty hefty, but their supposed scheme is nothing to scoff at.)
The charges were filed by Paul Fishman, U.S. Attorney for New Jersey (disclosure: my former office). Fishman claims that Matt Kluger passed along insider information that eventually made its way, via an unnamed co-conspirator, to Garrett Bauer, who traded on it. According to the complaint, Kluger and Bauer invested more than $109 million in the scheme, which yielded profits of more than $32.2 million.
Where did Kluger allegedly obtain the inside information? From the three Biglaw firms where he once worked on M&A deals….
Should they have been even better, though? Not everyone at 51 West 52nd Street was thrilled about the 2010 payouts (even though Wachtell associate bonuses still exceed those at almost every other firm).
Let’s take a look at what WLRK doled out last year….
As many of you are slowly trying to shake off your St. Patrick’s Day hangovers, there comes a bit of good news from Jon Ogg on the blog 24/7 Wall Street.Exxon Mobil announced that it had received approval from the DOJ for its acquisition of XTO Energy.
Despite the pervasive perception that the Obama administration was going to be a ginormous thorn in the side of Wall Street with regard to regulation, Exxon Mobil managed to get this approved without having to answer a second request. Second requests are commonly launched by either the DOJ or FTC during proposed mergers so that the government can make certain a company will not grow to monopolize a certain industry.
So why is this good news? After the jump I will explain why this may end up being a boon to both the legal and legal technology industries. If Ogg’s predictions are any indication, a cash cow may be coming to an antitrust division of a law firm near you.
Industrial gas supplier Airgas has sued its former law firm, Cravath, Swaine & Moore, alleging conflict of interest and breach of fiduciary duty. Airgas wants Cravath booted from representing an Airgas rival, Air Products, in a $5.1 billion hostile bid for Airgas.
Yesterday a Pennsylvania state court judge denied Airgas’s request for a temporary restraining order that would have sidelined Cravath in the takeover fight. But Judge Albert Sheppard said he would revisit the matter next Tuesday and decide whether Cravath should be permanently enjoined from repping Air Products.
Cravath has worked on numerous deals for Airgas over the past decade or so, as early as May 2001 and as recently as fall 2009. So Cravath should be conflicted out of representing Air Products, argues Airgas.
But it’s not that simple, according to Cravath. This may, in fact, be a bizarre love triangle….
That’s the most shocking revelation in an interesting New York Times profile of H. Rodgin Cohen, the nation’s top banking M&A lawyer and chairman of the venerable Sullivan & Cromwell. From the NYT:
After [Cohen and his wife Barbara] had paid their [restaurant] check, they went to fetch the car, and Mr. Cohen, a Boston fan since his days at Harvard Law, glanced down at his BlackBerry to check on the Red Sox. He drives a Subaru, a humble ride for a man who earned millions last year arranging shotgun weddings for the busted firms of Wall Street, and standing next to Barbara in the darkness, Rodge Cohen, a titan of the banking bar, struggled with his automated key, initially unable to — woop woop woop — release the lock.
Unlocking car doors by remote control — where’s a good associate when you need one?
Now, in re Subarus, we have nothing against them; they are fine cars. Some of our best friends drive Subarus. One of our co-clerks — a member of the Elect, no less — drives a Subaru Forester. The judge for whom we clerked — Judge Diarmuid O’Scannlain (9th Cir.), a top feeder judge — used to drive a purple Subaru (affectionately nicknamed “Grimace” by his clerks).
But as we know from the judicial pay controversy, federal judges don’t get compensated like partners at Sullivan & Cromwell. And Cohen is no ordinary S&C partner — he’s the chairman of the firm and its top rainmaker, generating tens of millions in business every year. A Subaru is shockingly downmarket for him. We realize that true wealth doesn’t have to advertise itself, and six-figure cars are for the nouveau riche, but this still seems a tad extreme.
More to the point, why is Rodge Cohen even driving himself? Wouldn’t it be more efficient for him to have a chauffeur-driven Maybach — john quinn, holla — so he can spend every waking minute on the phone, negotiating billion-dollar bank mergers? Isn’t it a waste of the brilliant Cohen’s brain cells to have him paying attention to yield signs when he could instead be thinking about yield curves?
More tidbits from the Rodge Cohen profile, along with commentary, after the jump.
Earlier this month, we mentioned that Hogan & Hartson and London-based Lovells were in “early stages of merger talks.”
Today brings the news that the firms are in “advanced talks to merge,” according to Nathan Koppel of the Wall Street Journal. But it’s not a done deal yet:
One of the biggest challenges to a Hogan/Lovells deal, lawyers say, will be marrying the firm’s contrasting styles. Hogan is considered relatively hard charging, paying partners based on how much business they bring in. Lovells take a more genteel approach, compensating partners based largely on their seniority.
UPDATE: Bruce MacEwen, who thinks that “this deal makes superb sense,” has a detailed analysis over at Adam Smith, Esq. (gavel bang: commenter).
A memo from Hogan head Warren Gorrell, plus selected comments from our prior post — we read the comments, so you don’t have to! — after the jump.
The general public really doesn’t understand what top-flight counsel does for their corporate clients. If they did, the pitchforks and torches crowd would be as angry at Wall Street lawyers as they are at Wall Street bankers.
Friday’s “revelation” about the advice given to Bank of America by Wachtell Lipton illustrates the point. Am Law Daily reports:
Amid the piles and piles of formerly privileged documents related to the Bank of America-Merrill Lynch merger, there are a few notes and e-mails from mid-December 2008 showing that BofA’s lawyers at Wachtell, Lipton, Rosen & Katz were saying very different things to their client and to federal regulators.
The e-mails show that early on the morning of December 19 [Wachtell litigation partner Eric Roth] advised the bank’s chief executive, Ken Lewis, and its interim general counsel, Brian Moynihan, on how difficult and financially risky it would be to try to invoke a so-called MAC — or material adverse change — clause, which would allow the bank to get out of the merger with Merrill.
But another e-mail from associate general counsel Teresa Brenner to Moynihan, sent several hours later and on the same day as Roth’s e-mail, says, “Eric made a very strong case as to why there was a MAC” during a conference call with some officials from the Federal Reserve.
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.
In case you hadn’t heard, Wall Street is in meltdown mode right now. Our colleagues over at Dealbreaker have been working over the weekend and around the clock to cover all the latest developments.
Here are the two big stories from the financial world. First, the top-level parent company of Lehman Brothers, Lehman Brothers Holdings Inc., is filing for Chapter 11 bankruptcy protection. (But no sleeping in for Lehmanites; they have been informed that they’re still expected to show up to work this morning.)
Second, Merrill Lynch, the investment bank that some feared might be next to go down the Bear Stearns / Lehman Brothers path, has reached a deal to sell itself to Bank of America, for $50 billion.
What do these deals mean for lawyers? Well, at least in the short term, they bring good news: more work. (Over the long term, of course, the news may be less good, as current and potential future clients vanish from the landscape on Wall Street.)
For its bankruptcy, Lehman is turning to Weil Gotshal & Manges, long known for its top-notch bankruptcy practice. From Dealbook:
Lehman has hired Weil, Gotshal & Manges, the law firm that handled Drexel [Burnham Lambert]‘s bankruptcy filing [in 1990]. Harvey Miller, the head of Weil’s restructuring practice, is known as one of the deans of the bankruptcy bar.
In addition, Lehman is trying to sell its more valuable assets, including its broker-dealer and asset-management operations. It appears to be represented in those efforts by Sullivan & Cromwell, according to TheDeal.com (subscription). Meanwhile, Wachtell, Lipton, Rosen & Katz, a powerhouse in financial-institutions M&A, is getting a piece of the action on the Merrill deal. As reported by the Wall Street Journal, the Merrill / B of A deal was hammered out in “a marathon series of meetings at Wachtell, Lipton, Rosen & Katz, the law firm which has long represented Bank of America in its deals.” Wachtell isn’t lending out their offices for free. As TheDeal.com reports, WLRK is indeed representing Bank of America in the transaction (for a fee that will be well into the eight figures — Ed Herlihy doesn’t come cheap). Merrill Lynch is being advised by Shearman & Sterling.
If you’re aware of other winners and losers from these deals, please share what you know, in the comments. Lehman Announces Bankruptcy Filing For Holding Company [Dealbreaker] Bank of America Reaches Deal To Buy Merrill Lynch [Dealbreaker] What a Lehman Bankruptcy Filing Might Look Like [DealBook] Bank of America to Buy Merrill [Wall Street Journal]
Are you challenged by the costs and logistics of maintaining your office, distracting you from the practice of law?
Many small firms are successfully moving part—or even all—of their practice to a virtual setting. This even includes multi-jurisdictional practice spanning several states and practice areas, although solo and small partnerships are still the largest adopters of virtual law.
Can you do the same? The new article Mobile in Practice, Virtual by Design from author Jared Correia, Esq., explores how mobile technology bring real-life benefits to a small law firm. Read this new article—the next in Thomson Reuters’ Independent Thinking series for small firms—to explore how a mobile practice:
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: [email protected].
Since late last year, things have been booming in Hong Kong / China in cap markets, especially Hong Kong IPOs. M&A deal flow has recently been getting a bit stronger as well. Although one can’t predict such things with any certainty, all signs are pointing to a banner entire 2014 for the top end US corporate and cap markets practices in Hong Kong / China. This is not really new news, as its been the feeling most in the market have had for a few months now and things continue to look good.
The head of our Asia practice, Evan Jowers, has been in Hong Kong for about 10 days a month (with trips every other month to both Shanghai and Bejing) for the past 7 months (Robert Kinney and Evan Jowers will be in Hong Kong again March 15 to 23), and spending most of his time there meeting with senior US hiring partners at just about all the major US and UK firms there, as well as prospective candidates at all associate levels and partner levels, and when in the US, Evan works Asia hours and is regularly on the phone with such persons, as our the other members of our Asia team. Our Yuliya Vinokurova is in Hong Kong every other month and Robert is there about 5 times a year as well. While we have a solid Asia team of recruiters, Evan Jowers will spend at least some time with all of our candidates for Asia position. We have had long standing relationships, and good friendships in some cases, with hiring partners and other senior US partners in Asia for 8 years now.
Everyone is talking about the importance of Social Media in Corporate America. But it is relatively safe to say that most law firms and lawyers are slightly behind the social curve. Most lawyers, at minimum, use LinkedIn, for networking. Some even use Twitter for pushing out short, pithy content, while many have Blogs, where they write their little hearts out. The adage “it is better to give than to receive” is not always true though in the world of Social. In the Social World – it is best to listen, give back and engage.
Social Media is a communications tool that can deeply educate you about the needs and wants of your clients and prospects when used in conjunction social media monitoring and sharing tools.
Take this quick quiz and see if you know how to use Social to help you engage more with your clients or to better service the ones you have.