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According to the Chicago Public Library’s Web site, the Windy City takes its nickname not from the wind howling off of Lake Michigan but from the boosterism-inspired claims 19th century Chicago businessmen made to East Coast investors. Detractors said the Chicagoans were full of wind. An uncharitable observer of the New York legal scene might be inclined to similar thoughts today because, of all the law firms scrambling to expand in New York, none have been more aggressive or forthright in their ambition than those from Chicago. “They’ve definitely done the biggest deals,” noted Ward Bower, a principal with the law firm consultancy Altman Weil. Indeed, within the last two years, large Chicago firms have swallowed up substantial and venerable New York firms such as Whitman, Breed, Abbott & Morgan, Rosenman & Colin and, most spectacularly, Brown & Wood. New York expansion has long been particularly compelling to large Chicago and Midwest firms, Bower said, because of their broad corporate client base. While large law firms in markets like Boston, San Francisco and Washington, D.C., often choose to focus on regional industries or lucrative practice niches, the biggest Chicago firms have prospered by being attuned to the varied needs of their traditional clients, the mammoth industrial corporations based in the heartland. Starting in the 1980s, as corporate America increasingly eyed international markets and participated in a Wall Street-based deal economy, Chicago firms headed east. Through the 1990s, the top Chicago firms steadily built strength in New York; by the end of the decade, most had more than 100 Manhattan-based lawyers. They have met with considerable success. Chicago firms’ New York offices have built some of the strongest litigation groups around, and they have made substantial inroads in transactional practices like bank finance, corporate debt and structured finance. Securitization, in particular, is emerging as something of a Chicago specialty. But two years into the new century, a 100-lawyer or even a 150-lawyer New York office is beginning to seem insignificant by the new Chicago standards. “Being that small in New York, it’s hard to get the kind of work you’d like,” said Thomas Cole, the chairman of Sidley Austin Brown & Wood, whose New York staff of about 450 lawyers suggests what the new standards are. The work Cole and other Chicago lawyers would like the most is the large-scale, high-value transactional work traditionally dominated by New York and London firms. This is ambition, but it is also fear. Particularly as corporations expand globally, the top Chicago firms fear that an inability to compete for such work may mean they will be left out of an emerging category of global super-firms. Most are betting that a larger New York footprint will make a critical difference in the kind of work they get and the positions they occupy in a consolidating profession. SUPER-FIRM STRATEGY No firm currently embodies the global super-firm strategy more than Sidley Austin, whose April 2001 merger with Brown & Wood remains the deal by which all other New York-Chicago combinations are measured. The firm’s New York office is now the eighth-largest law office of any firm in New York. Moreover, for a merger of such enormous proportions, Sidley Austin has so far generated surprisingly little friction in the ranks. Legal recruiter Lynn Mestel said the expectations of bitter departures have so far not been met. “It was a smart merger,” she said. “It was as good as it was going to get for either of them.” One of the good things about the merger is the commanding presence the firm now has on Wall Street, with leading structured finance and investment-grade debt practices. The former Brown & Wood pioneered the securitization area, and gave the combined firm one of the largest and most respected such practice groups around. None of these are premium practice areas, but Cole said he expected the combined firm’s larger scale and higher profile to give the firm a better shot at high-end work when the market improves. Indeed, the firm may be in the right place at the right time. The dearth of premium work for anyone means that formerly high-flying investment bankers who spent the boom years planning blockbuster mergers and initial public offerings now increasingly encounter Sidley, Austin, Brown & Wood while working on corporate debt and equity offerings. James Carlson, Mayer, Brown, Rowe & Maw’s New York managing partner, agreed the downturn could level the playing field a bit with the top New York firms. “They compete on a combination of skill and mystique,” he said. “The downturn has taken away the premium business that builds the mystique.” Mayer Brown is another leading contender for a place in the circle of global super-firms. Like Sidley Austin, its New York office has leading structured finance and securitization practices, and it also boasts a particularly strong litigation group. However, at 185 lawyers, that office is considerably smaller than Sidley Austin’s. On the other hand, Mayer Brown does have a 270-lawyer office in London, a result of its January acquisition of Rowe & Maw, the largest acquisition of a U.K. firm by an American firm to date. American and British law firms have long sought to serve the massive deal flow between New York and London from both ends. If Mayer Brown has secured a substantial London end, it must now look to grow the New York end. “For a short time, it’s all right to be out-of-balance between New York and London,” said Bower. “Over time, they have to balance out.” Carlson agreed. “In five years,” he said, “I expect us to have 500 lawyers in New York and 500 lawyers in London.” On the other hand, five years may be too long for Robert E. Bostrom, managing partner of Winston & Strawn’s New York office. “Our strategic plan is to get to about 400 lawyers in a year or so,” he said. The office currently counts 250. That means the firm is looking for a merger, again. The firm’s New York office reached 100 lawyers a year after its 1989 opening with the acquisition of 75-lawyer Cole & Dietz. In 2000, the firm acquired most of the New York lawyers of Whitman, Breed, Abbott & Morgan. That last merger caused a bit of a flap, as some Whitman Breed partners left out of the merger blasted the combination in the legal press. “Every merger has its hiccups,” said Bostrom. “Overall, it’s been a very successful merger.” The firm is now looking to build on a foreign client practice that came in with Whitman Breed, as well as bolster its litigation, bank finance, corporate debt and private equity practices. Bostrom also wants to launch a New York structured finance and securitization practice. It may not be easy to find a perfect fit, merger-wise. “We may have to push the plan out a bit,” he acknowledged. “With all the consolidations that have occurred, the pool has diminished.” Dennis W. LaBarre would be inclined to agree. The New York managing partner of Jones, Day, Reavis & Pogue, LaBarre has looked at merger possibilities and lateral groups and thinks the current mania for expansion is hard to justify. “A lot of it doesn’t compute,” he said. “You have to be careful about building a business around so-called portable business.” Not that the firm is not interested in expanding. As a firm originating in Cleveland, Jones Day has faced many of the same competitive issues as Chicago firms, only much earlier. It began expanding in the 1970s and came to New York in 1986. Until the end of the decade, Jones Day had the largest New York office of any firm from the Midwest. The firm now has 170 lawyers in New York and should get to 200 by the end of the year, LaBarre said. The firm is focusing New York expansion on bankruptcy, energy and intellectual property. Last year, the firm scored a coup by hiring three bankruptcy partners from Weil, Gotshal & Manges’ storied department. Earlier this year, the firm approached intellectual property boutique Pennie & Edmonds about a merger, but a source close to the talks said the offer was none-too-generous and swiftly rejected. Kirkland & Ellis has also focused its New York expansion on bankruptcy and intellectual property, practice areas that play off its powerful big-ticket litigation franchise. But Kirk Radke, the senior corporate partner in the firm’s 140-lawyer New York, said the firm had no plans to grow as quickly as some of the other Chicago firms. Partners’ concerns about diluting work quality and firm culture are powerful brakes on expansion, Radke said. ORGANIC GROWTH Perhaps the most prestigious and certainly the most profitable firm in Chicago, Kirkland & Ellis may be a little pickier about who it allows to share in what The American Lawyer‘s AmLaw 100 estimated were profits per partner of $1.4 million in 2000. “Organic growth has yielded great success for us,” said Radke. Still, Radke does not rule out a more aggressive strategy in the future. “Things change, the world changes,” he said. “There’s a risk associated with every strategy.” Compared to the other big Chicago firms, McDermott, Will & Emery has fewer big, institutional clients to help drive its expansion. Which may explain why it has less interest in slowly building its Wall Street profile through structural finance and corporate bond work. “We want to go after the best work,” said Peter J. Sacripanti, the partner-in-charge of McDermott Will’s 110-lawyer New York office. The firm announced its intent to the New York legal market recently with the hiring of two young partners from Shearman & Sterling’s mergers and acquisitions group. One of the laterals, Spencer D. Klein, is now the head of McDermott Will’s mergers and acquisitions practice. Sacripanti said the firm, which has also expanded in Boston and London, had had periodic New York merger talks but none were active at the moment. He described the firm’s approach to expansion as largely opportunistic. “If we came across a great structured finance partner, we’d consider that too,” he said. Acting more aggressive than opportunistic, Sonnenschein Nath & Rosenthal and KMZ Rosenman have made major forays into the New York market in recent weeks. Sonnenschein acquired 50-lawyer RubinBaum last week, pushing its New York office to about 135 lawyers. Meanwhile, KMZ Rosenman was born of Katten Muchin Zavis’ March acquisition of 240-lawyer Rosenman & Colin. Both firms had lagged behind the other large Chicago firms in their New York presence. A decade ago, Sonnenschein was in the top rank of Chicago firms with Sidley Austin and Mayer Brown. The firm’s position has slipped a bit. Sonnenschein’s New York managing partner Robert Winikoff said his firm was now seeking to make up that ground, getting to 200 lawyers within a year or so. The KMZ Rosenman merger faces different challenges. While the combined firm is relatively large, neither the former Katten Muchin nor Rosenman & Colin had major-league corporate practices. The hope, as with most mergers, is that the merger will create a firm that is considerably more than the sum of the parts. “If you don’t do anything, you’ll wither,” said Richard Zakin, a law firm consultant and the former New York managing partner of St. Louis’ Bryan Cave. “A lot of these are two plus two equals five.”

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