Wall Street firm targets District-based energy practice
Wednesday, January 19, 2011; 9:23 PM
A major Wall Street firm plans to announce that it has lured away a group of lawyers from a rival's D.C.-based energy and commodities practice, part of a push by law firms to expand their Washington footprint in an era of increased regulatory scrutiny.
As many as nine partners from McDermott, Will & Emery, a firm with origins in Chicago, are expected to join New York-based Cadwalader, Wickersham & Taft in the coming days, likely bringing along dozens of junior lawyers.
Many of the lawyers are based in the District, possibly increasing Cadwalader's head count here by roughly a third, according to sources close to the negotiations. The sources spoke on the condition of anonymity because they have not been authorized to speak publicly.
Those familiar with the legal market described the potential move as significant, establishing a new industry-specific practice at Cadwalader and suggesting that firms are ready to start adding to their workforces again after the economic downturn.
"There will be increasing numbers of occasions when significant groups move from one firm to the other, lock, stock and barrel," said Paula Alvary, a founding principal of the law firm consulting group Hoffman Alvary, which was not involved in the acquisition. "Due to the duration of the recession, there's some pent up interest to look for other platforms and identify which firms appear to be recovering more quickly or more consistently."
Cadwalader, like many firms, laid off hundreds of lawyers in 2008 and 2009 as it struggled to adjust to a falloff in demand for its corporate and dealmaking services. But the firm's financial performance rebounded sharply in 2009, with the profits per partner increasing to $2.4 million, a 28 percent jump over the year before, according to figures reported by the American Lawyer. The firm is among the 10 most profitable in the country.
The addition of a ready-made energy team will be the Wall Street firm's first industry-specific practice. The firm now has about 75 lawyers practicing in its Washington office.
D.C.-based partners Paul J. Pantano Jr., co-head of McDermott's energy and commodities group, and Karen A. Dewis, co-head of the firm's mergers and acquisitions practice, are said to be among those who will announce plans to join Cadwalader. Neither returned calls seeking comment.
Both firms confirmed that high-level discussions were continuing. A McDermott spokesman said the individuals in question were within the firm's energy-related commodities and derivatives trading practice.
"McDermott's global energy practice is far broader than that," the spokesman said. "Regardless of how these discussions end, this will in no way change the firm's strong commitment to our diverse clients operating within the global energy industry."
Consultants who advise law firms on strategic growth say they expect to see more energy industry-specific hiring as companies deal with the litigation, regulatory concerns and other issues that will arise as the industry shifts to new sources of energy.
"There's going to be a very interesting, complex, global matrix of legal needs that will evolve," said Jeff Coburn, a management consultant with Boston-based Coburn Consulting, which was not involved in the negotiations. "There are practices, and certainly energy is one of them, where you have to be in Washington, you have to have your ear to the ground and you have to be at the meetings with the people involved in furthering those interests both through legislation and regulation."