Cleary Gottlieb Steen & Hamilton confirmed Tuesday that it was one of the six firms the Treasury Department considered as candidates for a role as lead adviser on the $700 billion bailout plan.
Only two of those six firms pursued the work that eventually went to Simpson Thacher & Bartlett.
Four of the six law firms have confirmed that the Treasury reached out to them: Simpson, Cleary, Davis, Polk & Wardwell, and Wachtell, Lipton, Rosen & Katz. The two others, including the firm the Treasury turned down, remain unidentified. Two of the most likely candidates -- Sullivan & Cromwell and Latham & Watkins -- would not comment on the matter. A third, Shearman & Sterling, has not responded to messages.
Jennifer Zuccarelli, a spokeswoman for the Treasury, has so far declined to provide copies of letters the Treasury sent to the six firms or the letter the Treasury sent to the firm it ultimately rejected.
The four firms who turned the Treasury down appeared to be concerned mostly about conflicts and the possibility that they would have to give up a lucrative client in order to work so closely with the government.
"The Treasury procurement process was pretty inflexible," says one lawyer from one of the four firms that turned the Treasury down. "This is prime work, but we were unable to obtain sufficient comfort that we would be able to represent our regular clients on the program, even with separate teams, if we bid for the Treasury assignment."
Richard Beattie, chairman of Simpson Thacher, says the Treasury did not put any pressure on the firm to drop clients and that the firm is not concerned about losing business.
"They did not say that," Beattie says. "It's ridiculous. We represent JPMorgan Chase and would not give up a client like that."
Beattie describes the firm's role advising the Treasury on the bailout as "an honor."
This article first appeared on The Am Law Daily blog on AmericanLawyer.com.
