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There is no greater insult you can pay Chicago firms these days, it seems, than to call them Chicago firms. Call them “national” or “international,” but “Chicago,” alas, just doesn’t have the patina that some of the city’s largest firms want when they compete for high-stakes corporate work. This is more than just semiotics. Firms are drifting away from Chicago for the same reason that they are trying to shed the label: Increasingly, the action is in New York. In May, Chicago’s Sidley & Austin joined with New York’s 425-lawyer Brown & Wood, pulling off the biggest New York merger since Rogers & Wells merged with London’s Clifford Chance two years ago. The Sidley merger followed the acquisition of 180 lawyers from New York’s Whitman Breed Abbott & Morgan by another Chicago firm, Winston & Strawn, last August. These deals may be just the beginning. Katten Muchin Zavis, which recently called off merger talks with New York’s 350-lawyer Stroock & Stroock & Lavan, is looking for serious bulk in New York. Ditto McDermott, Will & Emery; Sonnenschein Nath & Rosenthal; and Chapman and Cutler. Mayer, Brown & Platt, meanwhile, is “open to considering” a merger with a New York firm, says Jason Kravitt, a member of Mayer Brown’s management committee, who spends most of his time in the firm’s 175-lawyer New York office. Why the rush to the East? It’s simple: New York is where the money is. Since the big investment banks and many of the surviving commercial banks are headquartered there, New York is where much of the best deals work is staffed. That’s nothing new, but with the cost of running law firms shooting through the roof, the need to corner premium work has taken on a sudden urgency. “If you are going to have a national compensation structure for associates that is first-tier, then you have to be intense in finding top-tier work,” says Kravitt, a corporate lawyer. “A lot of the work that is most remunerative and most prestigious is the best M&A work or finance and capital markets [work].” And that means New York, at least until Silicon Valley returns to its former health. New York exerts a further gravitational pull for Chicago firms that want to get in on the best international transactions. According to many lawyers, European corporations looking to do business in the U.S. shop first in New York for legal help. “For a non-New York firm to break into the international scene and become visible is difficult … because they are not part of historical relationships that have already been forged [between European corporations and] New York firms,” says David Bernick, a Kirkland & Ellis partner and management committee member. Adds McDermott chairman Lawrence Gerber: “If you’re going to be a player in the international arena, and that is where we practice, [New York and London] have to be very significant offices.” McDermott Will plans to at least double its New York office, which now has a shade more than 100 lawyers, within the next three years. Kirkland, meanwhile, is one of the few top-tier Chicago firms that is not looking to merge in New York. With its lofty profits per partner ($1.4 million, on average, in 2000) and sizable New York office (about 160 attorneys), it already cuts a dashing figure in the city. Soon, Sonnenschein may also be turning heads in New York. The firm opened an office in the city in 1985, and it grew to 55 lawyers in 1999. But due to the firm’s relatively low profits per partner, it had trouble retaining New York lawyers and bringing in new ones, says a former partner in the New York office. “We would constantly look for [lawyers to hire],” the lawyer says, “but it was a shot in the dark, because our profits per partner were so low.” (The firm’s average profits per partner grew a meager 17 percent during the 1990s, from $315,000 in 1990 to $370,000 in 1999, which was low by New York standards.) Sonnenschein’s New York office dipped to 38 lawyers in 2000, before the firm rebounded in August by hiring 18 corporate lawyers from New York’s Cooperman Levitt Winikoff Lester & Newman. Robert Winikoff, a former name partner of the firm, is now head of Sonnenschein’s New York office and a member of the firm’s executive committee. He says that the firm is placing greater emphasis on productivity and profitability. Winikoff predicts that Sonnenschein’s average profits per partner in 2001 will exceed $450,000, and says that it is committed to large-scale growth in New York. In July, the firm’s New York office added 12 trusts and estates and tax lawyers from New York’s Rosen & Reade and six bankruptcy lawyers from New York’s Pryor Cashman Sherman & Flynn. Sonnenschein can accommodate 225 to 250 lawyers in its midtown New York office, and Winikoff says, “it would not surprise me if we go to that size soon.” In his short time at the firm, Winikoff, an M&A and securities lawyer, has already developed a distinctly Chicagoan mind-set. “I don’t view Sonnenschein as a Chicago firm,” he says. “The majority of our attorneys are outside of Chicago.” Ah, yes: another law firm formerly known as Chicagoan.

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