Milbank, Tweed, Hadley & McCloy Tuesday raided Latham & Watkins' New York office for a five-partner banking and leveraged finance team.
The partners included the global co-chair of Latham's banking practice group, Marc P. Hanrahan, who has had a strong relationship with Goldman Sachs & Co., among other banks, a source familiar with the situation said. Their departure from Latham represents a rare group parting from the 2,000-lawyer firm and a hit to its banking and finance practice.
Mel Immergut, chairman of Milbank, said in a statement that Hanrahan's group would "have an enormously positive impact on our traditionally strong banking and leveraged finance practice and enhance many other practice areas of the firm, including financial restructuring, litigation, securities and corporate."
Hanrahan did not respond to a request for comment, and Milbank declined to make any of the new partners available for interviews. Immergut declined to comment beyond his written statement.
James Brandt, managing partner of Latham's New York office, in a statement wished the partners "well in their future endeavors" but added that Latham's "strength in New York is built on a very deep bench of talent across the practice." The firm has 25 partners in the leveraged finance group, a subset of the banking practice where Hanrahan's team worked.
"Over the years, we have built a phenomenally strong finance capability in New York that benefits from a team that enjoys a stellar reputation in the market and has a wealth of expertise and contacts," Brandt said in the statement. "We are one of the strongest finance firms in New York on all fronts and we see exciting opportunities for further growth ahead."
The Latham raid represents a rare acquisition by Milbank of partners in the United States from another law firm. Milbank last entered the U.S. lateral partner market in March 2009 when it picked up Mark Shinderman, the head of Munger, Tolles & Olson's bankruptcy and restructuring department in Los Angeles.
Hanrahan and two of the partners, Ronan M. Wicks and Marcus J. Dougherty, joined Latham in March 2004 from Skadden, Arps, Slate, Meagher & Flom. Hanrahan and Wicks had joined Skadden in 1998 from O'Melveny & Myers; Dougherty came two years later from London-based Norton Rose.
Hanrahan's group complemented Latham's high-yield debt practice and allowed the firm to offer both bank and bond representation, a source familiar with the firm said. Hanrahan was expected at the time of his joining Latham to work with Credit Suisse, Goldman Sachs and the Royal Bank of Scotland. Those clients, along with others, including Barclays Bank PLC, were on his Latham biography, which has now been removed from the firm's website. Hanrahan was particularly close to Goldman, the source said.
The two other partners joining Milbank are Patrick Flanagan and Lauren Hanrahan, who is not related to Hanrahan. The group will join Milbank's global leveraged finance group and will augment the 530-lawyer firm's banking relationships.
In addition to being a rare partner acquisition by Milbank, the loss of a large partner group is atypical for Latham & Watkins, which is more often known for acquiring large groups. This spring, Latham picked up 13 partners in New York, London, and the Middle East from White & Case. It also this year picked up a four-partner group in Houston and New York from Vinson & Elkins.
Latham's New York office recently underwent a changing of the guard. The firm last month confirmed that Brandt, a litigation partner, would take over as managing partner of the 285-lawyer office from David Gordon.
The financial crisis hit Latham hard and in February 2009, it laid off 440 employees, including 190 associates. Gross revenue fell 5 percent to $1.82 billion in 2009. Profits per partner increased 5 percent to $1.9 million.
Milbank was also impacted by the slowdown and confirmed it let go of 49 associates in May 2009. Its gross revenue fell 3 percent in 2009 to $601.5 million, while profit per partner rose 5 percent to $2.23 million.
Latham has seen two partners leave its New York office this year. Mergers and acquisitions partner David Schwartzbaum joined Greenberg Traurig in January. Real estate partner Joshua Stein left last week to launch his own practice, Joshua Stein PLLC. He said his move was "completely unrelated" to the departure of Hanrahan's group.
"My move came about because of a desire to have more independence and a simpler and more direct relationship with clients," he said.