Charles Landgraf, who led law firm Dewey & LeBoeuf’s lobbying group in Washington for 12 years, joined Arnold & Porter in May, following months of turmoil at his former firm that ended in Chapter 11 bankruptcy last week. Until last month, Landgraf, 58, had spent his entire legal career at Dewey, starting as an associate in 1978 and working his way up to managing partner of the London and D.C. offices.
During the weeks leading up to Dewey’s bankruptcy filing on May 28, Landgraf was the only Washington-based partner to serve on the firm’s “office of the chairman,” the five-partner group created in March to replace the sole leadership of former Chairman Steven Davis. Landgraf was the last of the remaining four partners — Davis stepped down in April amid a criminal investigation by the Manhattan District Attorney’s Office into whether he misled lenders about the financial state of the firm — to announce his departure to another firm.
Landgraf, a well-known insurance lobbyist, is now a partner in Arnold & Porter’s financial services and public policy groups. He has represented Lloyd’s of London (a longtime client of Dewey and Landgraf that has paid the firm roughly $1 million in lobbying fees each year since 2001, according to the Center for Responsive Politics), Aegis Insurance Services and and Fidelity National Financial.
Capital Business caught up with Landgraf last week. The following is an edited transcript of that conversation.
Why did you choose to go to Arnold & Porter? Who went with you?
The firm is particularly strong in financial services regulation, which fits well with my insurance practice, and a very distinguished government relations legislative team. So far, one — [former Dewey & LeBoeuf associate] Paul Howard, my chief deputy. Quite possibly [more]. I feel I have an opportunity now to focus on client service and put management responsibilities behind me, and re-devote myself to client business.
When we spoke in March, you and the other members of the office of the chairman sounded confident you’d be able to steady the ship and keep the firm open. At what point did you think, “I need to find another job?”
I was the last of the four to leave, although all four of us remained very close to the end. It was only the last few days before I left [May 16] that the others resigned [Jeffrey Kessler to Winston & Strawn, Richard Shutran to O’Melveny & Myers and Martin Bienenstock to Proskauer Rose]. We were all very committed to trying to preserve the firm as a stand-alone firm or seek a combination with another firm. It was only two weeks before we departed — the last week in April, that the last of those merger talks ended. Early the following week, we concluded the stand-alone operation wasn’t viable.
Can you tell us what the last few months at Dewey were like? A lot has been written about the compensation system that drove many partners to jump ship.
By January and February of this year, I had joined a group of partners pushing to come up with a new compensation formula that would put us on a more realistic schedule for distributing what we thought would be a good year’s net income this year. The most recent four quarters — the last three quarters of last year and first quarter of this year — were very strong. The irony was the first quarter this year was much stronger than the first quarter of the previous year. All the indicators were we’d have a good year. The problem was there was a lot of built-up tension about the fact that we had a compensation schedule last year that exceeded the actual earnings, and that had been true for a couple years. That buildup of un-met expectations put pressure on this year. We were trying to come up with an alternative schedule in February to squeeze the expectations into a total number that was closer to our actual net profits for each of the last three years, which had been stable rather than growing as projected — but expectations were larger than that.
By the time we got serious about a new compensation schedule, people were beginning to leave. That created a cascade of departures. Probably if we had started that [process] earlier, a quarter earlier, maybe we would’ve been able to make it work. And if banks had settled on renewing the revolver, it would’ve settled partners’ anxieties.
What do you think about criminal investigation into Steven Davis?
After the press reported that some partners had asked Manhattan DA’s office to start an investigation, we — the Office of the Chair — sought and received confirmation from the prosecutors that they had indeed, it seemed that morning, opened an investigation file, but it appeared that the press attention was sought by those partners, not the DA’s Office ...Unfortunately, it is probably no coincidence that on that weekend following the Friday press reports of the criminal investigation, all realistic hope of a large-scale combination with other law firms effectively ended. They had withdrawn by Sunday morning.