James Woolery’s decision to end a brief stint on the business side of Wall Street to return to the ranks of The Am Law 100 is among the more notable lateral moves in recent memory—one with implications both for the firm he is joining and the one he left behind.
A former corporate partner and business development chair at Cravath, Swaine & Moore, Woolery left the firm in January 2011 to join Cravath client JPMorgan Chase, where he coheaded the North American M&A group for the nation’s largest bank. On Sunday the 43-year-old Woolery broke the news, via The New York Times‘s DealBook, that he was leaving the financial services giant to join Cadwalader, Wickersham & Taft and become the firm’s first deputy chairman.
As Cadwalader’s second-in-command, Woolery’s overriding mission will be to reboot the firm’s M&A practice in the wake of senior partner Dennis Block’s September 2011 departure to Greenberg Traurig. His other duties will include serving as cochair of the corporate department, handling the firm’s business development, strategy, and external relations, and bolstering Cadwalder’s ties to JPMorgan and the financial services industry at large, according to sibling publication the New York Law Journal.
In interviews with a half-dozen current and former Cadwalader and Cravath partners, all of whom requested anonymity in order to speak freely, The Am Law Daily pieced together the circumstances that led to Woolery’s hire. The stakes are particularly high for Cadwalader, with one current partner noting that boosting the profile of the firm’s M&A group could create a ripple effect across a range of other practice areas at a time when the firm is regaining its financial footing after a rough four-year run.
Woolery, who officially started his new job on Monday, spoke with The Am Law Daily from his office at the firm’s downtown Manhattan headquarters in the World Financial Center about his decision to leave JPMorgan, which announced this week it would seek to cut 19,000 jobs by the end of 2014.
"This move was about an opportunity to drive an organization that was very well thought out and well planned," says Woolery, recalling breakfast meetings over oatmeal with Cadwalader chairman W. Christopher White at which the two men outlined their strategic vision for the firm. Woolery also cites Cadwalader’s "nimble" and "business-like" style as major factors in drawing him to the firm, whose management committee and general partnership he says he met with several times in New York and via video conference over the past several months.
White was similarly effusive in a press release issued by the firm touting Woolery’s arrival.
"Jim Woolery is the epitome of the Cadwalader lawyer—an exceptional legal mind that can fashion practical business solutions to complex legal problems," White said in his statement. "Jim brings more than two decades of experience advising corporations and boards on the most important business challenges facing them. His arrival at Cadwalader adds to our already strong corporate capabilities."
Woolery says Mark Rosen, president and CEO of New York–based executive search firm Mark Bruce International, was the main facilitator for his move to Cadwalader. (Rosen did not respond to a request for comment about his role representing Woolery.)
"I wasn’t looking to join a traditional firm with a staid or clubby atmosphere," says Woolery, noting that the remark was meant not as a knock on Cravath but rather a comment on the "sometimes antiquated" ways in which many large firms operate today.
At Cadwalader, a firm long known for an "eat-what-you-kill" approach to compensation that rewards partners for the business they generate, Woolery says he wants to find a "third way" that incorporates a performance-based system that emphasizes "team building" and encourages partners to help one another build their practices.
Woolery says he has already received calls from partners at other large firms eager to explore opportunities at Cadwalader, but adds that he has no plans to poach any partners from Cravath, where he spent 17 years after graduating from the University of Kentucky College of Law in 1995.
"I have great respect for Cravath—I grew up at that firm—and that is something I wouldn’t consider," Woolery says. "This is not about ‘eat-what-you-kill’ versus lockstep. Lockstep is [just] not the model we use to attract and retain the best talent in the competitive market."
A handful of former Cravath partners that have left the firm over the past decade say that Woolery—a native of Ashland, Kentucky who is the son of local lawyer Robert Woolery II and a distant cousin of former Love Connection host Chuck Woolery—always had an entrepreneurial streak and was keen on building his own practice.
At Cravath, which Woolery joined as a summer associate in 1994 before becoming partner in 2002, he was in the middle of the firm’s lockstep tier—a position within the firm’s partnership structure that would have entitled him to roughly a little more than $2 million a year in compensation, says one former partner familiar with Cravath’s profit structure.
According to the most recent Am Law 100 financial data on Cravath, the 476-lawyer firm had gross revenue of $568 million and profits per partner of $3.1 million in 2012. At Cadwalader, Woolery could be in line to earn more than $5 million, though that figure will hinge on his ability to bring in new business without the foundation of Cravath’s storied M&A pedigree. (Woolery declined to discuss his compensation.)
The Wall Street Journal reports that Woolery has already brought one notable matter with him to Cadwalader—advising JPMorgan in connection with its role as financial adviser to a special committee of computer maker Dell’s board of directors on the company’s proposed $24.4 billion leveraged buyout. Woolery says that he expects "there will be a strong relationship between Cadwalader and JPMorgan that will go a lot deeper than underwriting."
As it happens, JPMorgan has a long-standing relationship with Cravath, whose current presiding partner, C. Allen Parker, released a statement praising his former colleague’s move to Cadwalader.
"Jim has been a good friend for almost 20 years, both personally and professionally, and he has long been interested in the responsibilities and challenges of being a leader in a law firm," said Parker, who succeeded Evan Chesler by ascending to Cravath’s top management post on January 1. "I believe that Cadwalader will be a great practice and leadership platform for him, and we all wish him the best there." (Parker and Chesler either declined or did not respond to The Am Law Daily‘s requests for comment.)
Sources say Woolery was too young to be seriously considered as a candidate to take the reins at Cravath, which has just two offices in New York and London and is essentially run by a consensus of the firm’s roughly 90 partners. Though his path to the top may have been blocked, Woolery says he is proud of the five years he spent heading Cravath’s business development group.
In that capacity, Woolery tells The Am Law Daily that he worked with Cravath’s younger partners to shift the firm’s methods for grabbing roles on marquee deals to be less focused on "pitch books" and more toward "research and market intelligence." A group of those younger partners were the subject of a 2010 Journal story in which Woolery was quoted as saying "this is not your grandfather’s Cravath."
Woolery, who does not have an MBA, learned at the knee of longtime Cravath corporate partner Samuel Butler, who retired in 2003 and is now special counsel at the firm. Butler, who served as the firm’s presiding partner from 1980 until 1999, was also a member of the board of directors of Covington, Kentucky–based chemicals company Ashland Inc., which has turned to Cravath for counsel on multiple transactions over the years, including the second-largest deal in the company’s history: its $3.2 billion acquisition of International Specialty Products (ISP) in May 2011.
Woolery, who had advised Ashland on other matters but left Cravath four months before the ISP deal was announced, did not work on that merger. Nor did JPMorgan, according to Bloomberg, whose annual M&A rankings released last month show that the New York–based banking giant’s market share for announced global and U.S. deals fell between 2011 and 2012. JPMorgan also lagged behind Goldman Sachs, Morgan Stanley, Citigroup, and Barclays based on other transactional metrics compiled by Bloomberg.
On the other hand, deal data collected by Thomson Reuters and Dealogic and cited by both The Times and The Journal shows that JPMorgan currently leads the industry in announced deals within the United States so far this year, with 20 transactions worth a total of $93.5 billion. (Roughly half of that total is due to JPMorgan’s Dell work, as well as the bank’s role advising Berkshire Hathaway and 3G Capital in connection with their proposed $28 billion takeover of condiment king H.J. Heinz.)
Statistics aside, Cadwalader’s hire of Woolery represents a major step for the firm, which has failed in recent years to crack the top tier of M&A legal advisers, according to our previous reports. Cadwalader’s website currently lists only 23 attorneys—14 of them partners—in the firm’s M&A practice, and current corporate cochair Louis Bevilacqua mostly handles restructuring deals.
Most of the major M&A matters recently handled by Cadwalader have been driven by partners in other practice areas. Those assignments include the firm’s current role serving as antitrust counsel to US Airways Group on its proposed $11 billion merger with American Airlines parent AMR, and its representation of Microsoft on its $1.1 billion acquisition of more than 800 patents from AOL last year.
Cadwalader antitrust head Charles "Rick" Rule— who joined the firm in 2007 from Fried, Frank, Harris, Shriver & Jacobson—handled both of those transactions for the firm. Other recent lateral hires have brought more work with them.
Former Linklaters antitrust chief Alec Burnside, for instance, came aboard in early 2011 to launch a Brussels outpost that went on to land a role advising Irish airline Aer Lingus last year defending it against an $883 million hostile takeover bid by budget rival Ryanair Holdings. (The European Commission has moved to block that deal.)
Woolery says he wants to capitalize on the regulatory expertise afforded by Rule, Burnside, and others by bolting on a top-notch M&A practice. "Business and regulatory law should go together," he says, adding that many clients doing big deals will often try and split such matters between different outside firms.
Two other key lateral hires have recently helped Cadwalader advise clients on high-profile matters. Kenneth Wainstein—a former federal prosecutor and counterterrorism adviser in the Bush administration who joined the firm last year to head its business fraud group—was retained by the NCAA in January to conduct an internal investigation of its conduct in a probe into the sports program at the University of Miami. (The NCAA, the governing body for college sports, released a report this month compiled by Wainstein and his team.)
Cadwalader corporate partner Christopher Cox—who joined the firm in January 2012 from Cahill Gordon & Reindel—took the lead advising Irish drug company Elan this month on its $3.25 billion sale of the drug Tysabri to Biogen. (On Monday, Elan received a $6.6 billion takeover bid from Royalty Pharma; a Cadwalader spokesman did not respond to a request for comment about whether the firm is advising the Dublin-based target on the offer.)
The firm has also seen some prominent partners depart over the past year. Wilmer Cutler Pickering Hale and Dorr hired hedge fund expert Drew Chapman, the former head of Cadwalader’s alternative investment group, last summer for its securities practice in New York. Pillsbury Winthrop Shaw Pittman also picked up former Cadwalader restructuring cochair Deryck Palmer and partners Christopher Mirick and Andrew Troop in New York in January 2012.
Nonetheless, the firm—one of the oldest in the U.S., with roots going back to a solo shop founded in 1792—appears to be gaining momentum after a rough patch. The Am Law Daily reported last month that Cadwalader’s profits had increased for the first time in three years in 2012 as gross revenue rose 4 percent to $466.5 million, while profits per partner jumped 11.6 percent to $2.65 million.
The addition of Woolery is in some ways not out of character for Cadwalader, which has a history of making bold moves. Its hire of Dennis Block from Weil, Gotshal & Manges in 1998 was once chronicled in a New York magazine feature story about the frothiness of the lateral market.
A decade later, however, Cadwalader faced an existential crisis as it confronted the full force of the economic downturn. Like many large Wall Street firms, Cadwalader had become heavily reliant on securitization work, and top Block clients such as Bear Stearns (sold in an early 2008 fire sale to JPMorgan) and pharmaceutical giant Pfizer (whose former CEO Jeffrey Kindler stepped down 2010, two years after the company hired a new general counsel) ceased being reliable sources of income, say those familiar with the matter. (In a twist, Block is now advising a major shareholder objecting to the Dell buyout on which Cadwalader has grabbed a role.)
Cadwalader was one of the first Am Law 100 firms to begin mass layoffs of associates amid the onset of the global economic recession in 2008, a controversial move that many large U.S. and international firms soon followed. Profits plunged 30 percent that year at Cadwalader and the firm chose White to replace Robert Link Jr. as chairman.
Cadwalader’s attorney head count has also dropped from 721 in 2007 to 464 last year, according to data compiled by sibling publication The National Law Journal. Link retired from Cadwalader in 2010 and White—whose sister Maureen is a former finance chair for the Democratic National Committee—did not respond to a request for comment about how Woolery’s arrival might further revive the firm’s fortunes.
Though Woolery’s new title of deputy chair has led to speculation that he is automatically in line to eventually take over the firm’s top post, he says any succession plan that would see him succeed White will have to be determined by Cadwalader’s partners.
As for Woolery’s former firm, his departure from Cravath in January 2011 was one of several losses from what has traditionally been a corporate and litigation stalwart.
While most of the firm’s top partners—Business Insider put together a list in 2010—have stayed put, a tally of those who have left in recent years either for positions on Wall Street or public service shows that Cravath is not immune to the market forces that affect the rest of the Am Law 100, a notion The American Lawyer‘s Vivia Chen touched on last week in her Careerist column.
Public service has been a draw for other Cravath partners as well. Former corporate partner Timothy Massad—who left the firm in 2009 to serve as chief counsel for the Troubled Asset Relief Program—was confirmed in 2011 as assistant counsel for financial stability at the U.S. Department of the Treasury.
Litigation partner Katherine Forrest—one of Cravath’s "most powerful" partners, according to Business Insider—left the firm in late 2010 to become deputy assistant U.S. attorney general for antitrust at the U.S. Department of Justice. Less than a year later, Forrest was sworn in as a U.S. district court judge in Manhattan, a perch from which she has recently sparred with the Obama administration over a controversial military detention law.
Cravath also saw corporate partners Ronald Cami and Julie Sweet depart in 2010 to take top in-house roles at TPG Capital and Accenture, respectively, while litigation partner Francis Barron left the firm the same year to become Morgan Stanley’s chief legal officer. (Barron rejoined Cravath last year.)
Morgan Stanley’s current head of investment banking is Robert Kindler, who spent 20 years at Cravath before leaving the firm in 2000 to become a banker at Chase Manhattan, now part of JPMorgan. Another former Cravath partner, George Bilicic, left Cravath that same year to join Merrill Lynch. Bilicic has worked at investment banking boutique Lazard since 2008.
Former Cravath tax partner Lewis Steinberg left the firm in 2005 to become a managing director at UBS. After a brief sojourn at Linklaters in 2009, Steinberg returned to UBS before joining Swiss banking rival Credit Suisse in 2010 as a managing director and head of strategic advisory in its investment banking department.
Cravath has also seen partners head to other firms, something that was almost unthinkable prior to the departure of Daniel Cunningham, the former managing partner of its London office, for Allen & Overy in 2001. Cunningham, who was the first partner to leave Cravath for another firm, brought several lawyers from the firm with him. (Cunningham left the Magic Circle firm in 2009 for Quinn Emanuel Urquhart & Sullivan.)
In January, Kirkland & Ellis hired Cravath M&A partner Sarkis Jebejian in New York, only a year after Cravath’s longtime environmental practice head Jeffrey Smith left to join the local office of Crowell & Moring. In late 2011 former Cravath corporate partner John Gaffney, who had left the firm in 2008 for an in-house position at an energy company, returned to private practice at Gibson, Dunn & Crutcher in New York.
Cravath has offset the losses by making a few splashy hires of its own. In 2011 the firm brought on former Justice Department antitrust chief Christine Varney as a partner in New York. This month Cravath picked up another partner with the addition of former U.S. Patent and Trademark Office director David Kappos.
Meanwhile, the firm’s stable of M&A experts—partners like Scott Barshay, Richard Hall, Faiza Saeed, Robert Townsend, and William Whelan III—have kept its corporate practice humming. Hall has relocated from New York to London, while Saeed and Townsend have been named coleaders of the firm’s Americas M&A group, according to British publication Legal Week. Another top Cravath corporate partner, John White, took the unusual step of agreeing to step down from the firm’s equity partnership if his wife, Debevoise & Plimpton litigation chair Mary Jo White, is confirmed next month as the new head of the SEC.
Varney is part of Cravath deal teams advising Anglo-Dutch consumer goods giant Unilever on the $700 million sale of its Skippy peanut butter brand to Hormel Foods, Paris–based Compagnie de Saint-Gobain on the $1.7 billion sale of its U.S. bottle and jar unit to Ireland’s Ardagh Group, and Mexican brewer Grupo Modelo on its proposed $20.1 billion sale to Anheuser-Busch InBev, which the Justice Department recently filed suit to block on antitrust grounds.
A team of lawyers from Cravath led by corporate partner Erik Tavzel are advising a special committee of the board of Assisted Living Concepts on its announced $278 million sale this week to Fort Worth–based private equity firm TPG—where former Cravath colleague Cami is now general counsel. Cravath also took the lead for Barnes & Noble this year on its $89.5 million sale of a 5 percent stake in the company’s struggling e-book Nook Media division to British publishing giant Pearson. (A spokeswoman for the firm says it does not have a role advising on Barnes & Noble chairman Leonard Riggio’s bid this week to buy the bookstore chain’s retail business.)
Still, that a lawyer once considered one of Cravath’s brightest stars did not return following his move to JPMorgan—whether by his choice or that of the firm—suggests a break from previous eras that saw corporate partners Allen Finkelson and Alan Stephenson leave for banking jobs at Lehman Brothers and Wasserstein Perella, only to return to Cravath after a few years.
Woolery’s decision to join Cadwalader and the departures of other Cravath partners for positions elsewhere—not all of which were financially driven—does not in any serious way suggest the impending demise of the firm or its lockstep system.
Nonetheless, those familiar with the firm’s internal workings and the legal industry in general say such defections serve as a reminder that despite its veneer of invincibility, Cravath is susceptible to the same broad spectrum of stresses, be they economic or professional, that all Am Law 100 firms now face.
Additional reporting by Julie Triedman and Sara Randazzo.