Cravath, Swaine & Moore’s office at 825 Eighth AVe.in New York.
Four months after making headlines with its hire of Cravath, Swaine & Moore corporate partner Eric Schiele, Kirkland & Ellis has returned to the firm for two more hires.
Sandra Goldstein, long considered one of Cravath’s most powerful partners and a former head of litigation at the firm, is moving to Kirkland’s New York office with litigation associate Stefan Atkinson, said a source briefed on the matter. Atkinson, like Goldstein, will be an equity partner in Kirkland’s litigation group.
A Friday evening email to Goldstein at Cravath returned a message that she had resigned from the partnership as of April 13. All inquiries on client matters are being directed to Daniel Slifkin, the current head of Cravath’s litigation group. A request for comment sent to Goldstein at Kirkland and her personal email address were not immediately returned by the time of this story.
Goldstein’s move to Kirkland, which was first reported by Reuters and The Wall Street Journal, comes as Cravath and other traditionally lockstep New York firms grapple with challenges to their compensation model from outfits like Kirkland extending lucrative pay packages to recruit high-end laterals.
Kirkland, which last year topped Latham & Watkins to become the nation’s highest-grossing law firm with $3.165 billion in gross revenue, has previously tapped Cravath for new talent. In late 2016, Kirkland hired Cravath M&A partner Jonathan Davis in New York, a move that came four years after former Cravath M&A partner Sarkis Jebejian jumped to Kirkland.
Schiele, who worked alongside Cravath’s presiding partner Faiza Saeed on some of the firm’s largest deals, including The Walt Disney Co.’s pending $66 billion buy of Twenty-First Century Fox Inc., made the move to Kirkland in January. In early 2016, Cravath saw M&A superstar Scott Barshay leave its ranks for Paul, Weiss, Rifkind, Wharton & Garrison, which agreed to pay him nearly $10 million per year, according to reporting by The American Lawyer.
The partner exits have put pressure on Cravath’s lockstep model. The firm, which will celebrate its 200th anniversary next year, has made tweaks to the timeline of its partnership compensation structure. But Cravath has also resisted incorporating major changes that some of its contemporaries, such as Simpson Thacher & Bartlett, have made to their own lockstep compensation systems.
In a statement provided in March to the New York Law Journal, Cravath defended its system as encompassing “our approach to talent development, client service and compensation. It is the foundation of our collaborative culture, and it drives the consistency in quality across our platform that enables us to deliver the best advice to our clients in their most challenging matters.”
Saeed, a top Cravath dealmaker who in 2016 became the firm’s first female leader after succeeding C. Allen Parker as presiding partner (Parker subsequently became general counsel at Wells Fargo & Co.), did not return a request for comment about Goldstein’s departure. Kirkland declined to discuss the matter.
Goldstein, who specializes in litigation related to M&A deals, often worked closely with Saeed, who handles the corporate side of such transactions. Goldstein headed Cravath’s litigation group from 2010 until 2016, when Slifkin assumed leadership of the practice. During her time at Cravath, where she made partner in 1987, Goldstein had lead roles on several key engagements, including her successful 2011 defense in a Delaware court of a poison pill put in place by book retailer Barnes & Noble Inc. and the 2014 defeat of a securities class action filed against Xerox Corp.
As for Kirkland, Goldstein and Atkinson are the latest additions in what has been a robust few months of lateral partner recruitment by the firm, which in December absorbed a high-profile investment management team from Debevoise & Plimpton.
Kirkland recently brought on a pair of energy, infrastructure and project finance partners from Norton Rose Fulbright in Washington, D.C., in Rohit Chaudhry and Brian Greene, both of whom previously worked at Chadbourne & Parke. Kirkland also quietly hired Shaun Mathew, deputy head of the shareholder activism response team at Vinson & Elkins, as a corporate partner in New York. (Mathew’s move came about a month after the former head of Vinson’s shareholder activism team, Kai Haakon Liekefett, jumped to Sidley Austin.)
In Boston, where Kirkland opened an office last year in an effort to capture more private equity work, the firm hired Choate, Hall & Stewart’s former private equity practice co-chair Christian Atwood in January. Kirkland’s Boston office also raided Proskauer Rose for Scott Jones and Marguerite Lombardo, both of whom are now tax partners at the firm.
Other moves of note by Kirkland this year include its hire of Latham & Watkins’ former private equity co-head Jennifer Perkins in New York, bankruptcy and restructuring partner Susan Golden in the same city from her role as a trial attorney in the U.S. Department of Justice’s Office of the U.S. Trustee and bringing back former partner and ex-Jenner & Block intellectual property transactions chair Adam Petravicius in Chicago.
In London, Kirkland reportedly agreed to pay roughly $10 million to bring on Freshfields Bruckhaus Deringer private equity partner David Higgins late last year as its new local co-managing partner. Kirkland’s London office also recently boosted its restructuring expertise by bringing aboard partner Matthew Czyzyk and three associates from four different Global 100 firms.
It was not immediately clear how much Kirkland has agreed to pay Goldstein, who likely would have been at the high end of Cravath’s partnership compensation scheme. Profits per partner at the all-equity firm were roughly $4 million last year, according to ALM Intelligence data. At Kirkland, which unlike Cravath has a large nonequity partnership tier, profits per equity partner averaged $4.7 million in 2017.
In late 2016, Kirkland shook up its own compensation framework by slashing the equity stakes of some partners, including many senior litigators. The firm has previously paid big money to recruit star laterals, including former Winston & Strawn litigation chair James Hurst, who reportedly received a $9 million guarantee in order make the move to Kirkland’s Chicago headquarters in late 2014. Hurst now serves as a member of Kirkland’s 15-person management committee.
Kirkland’s recent spate of star hires comes amid an incredible run of financial growth by the firm and as several top paid partners come off of its books. Quinn Emanuel Urquhart & Sullivan snagged prominent Kirkland appellate litigator Christopher Landau in January, the same month as Robert Khuzami, a key lateral hire by Kirkland in 2013, left the firm to become second-in-command at the U.S. Attorney’s Office in Manhattan. Khuzami revealed in federal government disclosure forms an $11.1 million Kirkland pay package.
The litigation group at Cravath once helmed by Goldstein has received some new blood in recent months. The firm confirmed in September a rare lateral recruit in counsel Evan Norris, a former federal prosecutor from the Eastern District of New York who led a team prosecuting a massive corruption case involving soccer’s global governing body. Norris’ arrival came amid the departure of several veteran Cravath lawyers.
Earlier this year, Cravath saw its first woman partner, trusts and estates expert Christine Beshar, die at 88. Beshar retired from the partnership in 1999 but remained senior counsel at the firm until her death. George Gillespie III, another former Cravath partner, trusts and estates specialist and longtime adviser to the board of The Washington Post Co., died at 87 on Sept. 15.
At least two other former Cravath partners have left the firm in 2018.
Susan Webster, the former head of Cravath’s general corporate practice, retired from the partnership and became general counsel at the Fremont Group, a private investment firm controlled by the Bechtel family. Cravath corporate and capital markets partner Joel Herold also left the firm’s New York office in January to become chief legal officer at entertainment industry investor Reservoir Media Management Inc.