I’ve written previously of my firm conviction that it’s people who make
the times and not the times who make the people, and we’ve seen it in
action again vis-a-vis the demise of Coudert. The two firms
who pounced on the situation the fastest and came away with
what are arguably the most difficult-to-reproduce practice groups (those
in Asia and Russia) are Orrick and DLA Piper Rudnick—and both are
led by driven, visionary chairmen.
Ralph Baxter of Orrick and Nigel Knowles of DLA are nicely
profiled by The Lawyer this week, and their protestations
to the contrary notwithstanding, they clearly eye their respective firms
as competitors to gain pride of place at the very top of the global legal
food chain—a “top five, global, full-service law firm,” as Knowles
puts it. Both:
- have run their firms about 10 years;
- will tell anyone who asks and many who don’t about their global expansionist
plans; - pounced on the opportunities presented by the demise of Coudert so
quickly as to become, in the eyes of some, accelerants of events; - are universally described as "charismatic;" and
- brook no interference with their leadership: “Nigel said it
was a good idea to take on the EY Law team [in Russia] and he pushed
it through,” says
a partner at DLA Piper. “If you’re in a law firm and
you elect your managers, you have to let them manage." Ditto
for Baxter.
And yet despite the breathtakingly obvious fact that their tussle
over various pieces of Coudert’s practice was a zero-sum game, they deny
they’re in competition. Says Baxter, with some prickliness,
"Next year, in the spring, a number of law school graduates
will graduate and the best of them will be recruited by Latham and by
Orrick. Latham and Orrick are not in a clash, we’re in a market."Latham and Orrick and Shearman & Sterling want the same
people. That doesn’t put us at odds with each other, we’re just in
a market.“In China, the quality of lawyers that worked at Coudert is outstanding
and any law firm would want them. That somebody else would want them
doesn’t put us in a clash. We’re not in very direct competition with
DLA."
One’s tempted to wonder how many ways one can express the same thought
in different words, but Baxter is nothing if not "on message."
Yet there’s more than a grain of truth in what he says. The number
of outstanding US/UK-trained lawyers in China (including Hong Kong) is
a finite pool which will by its nature take years to grow in any material
scope. And every one who goes to Orrick does not go to DLA Piper
and vice versa. This brings to mind a former
Wall Street buddy of mine, a trader, who deflated more than one delicate
ego with the trenchant observation that "there is no such thing as scarcity
and there is no such thing as surplus; there is only price." (The
oil industry has always known this; President Carter never did.)
But Baxter, a student of mergers and lateral acquisitions if anyone
is, has an insight about acquiring individuals versus acquiring teams,
which is worth reproducing at some length (emphasis supplied):
“You can expand lawyer by lawyer, and that’s the slowest possible way to do it and the highest risk way to do it. If you hire one lawyer at a time 100 times, you’ll have a group of people who’ll interact in a certain way, but you’ll only know that once you’re done. If you hire 100 lawyers all at once, you’ll
already know how they work – that’s why merger is appealing.
“Teams of people who have the tradition of working together, they have a social cohesion and therefore have a more predictable cultural future and cultural impact on the firm that we already are.
“We learnt that best when we brought in 40 litigation lawyers from Donovan
Leisure Newton & Irvine in New York in 1998. Since then we’ve had a healthy
appreciation for the potential of bringing in entire teams."
This strikes me as astute: For all the lip service we may pay
to "culture," how often do we act based on what it
takes to preserve it? The fact that Orrick absorbed as much of Coudert
as it has, with, to all appearances, cohesion intact, is no accident. Baxter,
of course, neglects to mention that Orrick’s 1998 swoop on Donovan-Leisure’s
litigation department meant curtains for that storied firm. Have we
seen the Coudert highlight reel before?
Nor have we remotely seen the last of these two competitors: Knowles
is every bit as determined as Baxter to have his firm ascend to the ranks of the Global 5. The way he puts it, indeed, there is no alternative:
“When you say ‘set the strategy’, these things only take five minutes. It wasn’t a mind-blowing, towel-around-the-head thing to work out that we ought to be a top five, global, full-service law firm. Because what else can you be?” he says matter-of-factly.
You can, of course, be Coudert (or Donovan Leisure). Caveat
omnia.
