According to Edward Koren, head of Holland & Knight's 80-attorney private wealth services practice, the main difference between the clients he represented when he began practicing almost four decades ago and his current clients is this: "They're much richer these days," says Koren.
Trusts and estates work was once a staple of law firms' offerings, but the list of firms that have dropped private client and trusts and estates practices (or who have seemed indifferent to lateral partner departures in those practices) have included O'Melveny & Myers, Weil, Gotshal & Manges, and, most recently, Debevoise & Plimpton. But at the same time, other Am Law firms, including McDermott Will & Emery, Katten Muchin Rosenman, and Loeb & Loeb, which has counted Los Angeles–based billionaire Eli Broad as a client, have expanded private client–related practices, seeing it as a lucrative line of business. "Our commitment to growing the practices has been in response to rising demand," says McDermott Will firmwide cochair Jeffrey Stone. He adds, "There has been a enormous amount of wealth generated over the past 15 years, and at the same time the work has become more frequent and complex, thanks in part to constantly changing and more nuanced laws." For example, the federal estate tax has been in flux for more than a decade, and was briefly phased out completely for 2010. But some Am Law firms have fled the practice, citing, among other things, the work's incompatibility with a firm financial model that's based on litigation and deal work that requires more associate man-hours. Koren, whose clients have included the late New York Yankees baseball team owner George Steinbrenner and his family, admits as much: "We don't get assignments you can dump 25 associates on." He adds, "There are very few seven-figure [per matter] fees. A big fee for us is in the six figures."
While firms define and organize their private client practices differently, generally speaking it includes handling tax, cross-border, investment, estate planning, real estate, charitable contributions, and family-owned business-related matters for high-net-worth individuals. At some firms, the practice also includes airplane and art transactions and IP matters. Some of the firms that have essentially doubled down on private client practices say that it reflects their commitment to a standing practice. Joshua Rubenstein, head of Katten's trusts and estates practice, points out that the firm's private client practice, which numbers about 100 attorneys, dates back to the beginnings of the firm's two predecessor firms.
But other Am Law firms contend that retaining this type of work serves as a hedge against how the legal marketplace could look in the future. In Stone's view of the future, private client work will likely be among the most stable practices for big firms. "With the rise of e-discovery, predictive coding, and staff attorneys, a leverage model that requires an army of junior associates for big-case litigation may not be as viable in the future," Stone says.
Katten's Rubenstein, who is the fourth generation in his family to work in the trusts and estates area, concurs: "I think the firms that are getting out of the practice are chasing yesterday's news, and the firms that are growing the practice are looking forward."