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It’s the highest-grossing firm in New York, and for that matter, in the United States. Could Skadden, Arps, Slate, Meagher & Flom be on the verge of becoming D.C.’s top revenue earner, too? On this year’s D.C. 20, Legal Times‘ annual list of the top-grossing Washington law offices, Skadden climbed to No. 3, powered by a 19.7 percent jump in revenue. It edged ahead of D.C. mainstay Arnold & Porter (No. 4), and is now challenging Hogan & Hartson (No. 1) and Wilmer Cutler Pickering Hale and Dorr (No. 2) for the top spot. And it’s already far ahead of many of its local rivals in D.C. profits per partner ($2.28 million) and revenue per lawyer ($1.16 million). Perhaps the reason Skadden is in a position to reach No. 1 is because it acts like a quintessential Washington firm. It has 299 lawyers in the District, and they’re handling some of the highest-end work available. It has a superstar rainmaker: Robert Bennett, go-to guy for the scandal plagued and perhaps the king of the D.C. legal-rati. And its roster boasts scores of government recruits with deep ties to federal agencies. “In no sense would anyone say that Washington was a stepchild,” says head of the D.C. office Michael Rogan. He adds that while Skadden is headquartered in New York, the firm functions under a “one firm” mentality, making Washington an equally important part of the family. In other words, D.C. lawyers get a piece of the New York client pie, and vice versa. “We kind of view our offices and our relationships as different floors in the same building,” Washington antitrust partner C. Benjamin Crisman Jr. says. The firm, which opened in Washington in 1976, has also strongly resisted adding multiple tiers to its partnership or adding large lateral practice groups. That’s a key difference with several other firms on the D.C. 20. Skadden is still single-tiered, it’s highly leveraged, and 50 of the 72 Washington partners started out as associates. “It’s culture. We all grew up together. We all support each other,” says Washington litigation partner Andrew Sandler. MINING CLIENTS A good example of Skadden’s “one-firm” mentality is its work on the massive bid by BHP Billiton to purchase fellow mineral mining company Rio Tinto. If BHP’s bid is successful, the transaction could reach $380 billion, and will stand as one of the biggest deals ever. Skadden D.C. partners are heading up much of the work for BHP, though Skadden’s New York, London, and Sydney offices are also in play. The firm’s antitrust, mergers and acquisitions, and tax practices have the biggest chunk of work, though smaller bites are going to practices like environmental. Crisman, who leads the antitrust team, says that New York partner and mass torts star Sheila Birnbaum connected him with BHP. She first represented the company about a decade ago, and Skadden has since become its primary U.S. counsel. Birnbaum introduced Crisman to BHP in 2000 when its general counsel needed help developing a worldwide antitrust compliance policy. Around the same time, Birnbaum and New York corporate partner Peter Atkins introduced BHP to D.C. M&A partner Ronald Barusch. Today, Barusch leads the Washington M&A team working on the Rio Tinto bid. BHP and Rio Tinto both have headquarters in London and Australia, and substantial operations in the United States. That makes the tax implications of the deal extra complex. It’s the job of D.C. partner Paul Oosterhuis, head of Skadden’s international tax practice, to help structure the deal in a way that minimizes the tax disadvantages in all three countries involved. “We’re often on calls at six in the morning, or six at night,” he says, referring to the time differences between the locations. INSIDER ACCESS Oosterhuis describes the 54-lawyer tax practice as being divided into four groups: One chunk serves as a support system for M&A work handled in D.C.; another supports transactional work generated by the energy practice; another component focuses on helping U.S.- and foreign-based multinational clients with tax planning; and finally, there’s the tax controversy group. That level of organization, says tax controversy partner Fred Goldberg Jr., “encourages us to work together and share.” For many of the deals handled by the tax group, Goldberg acts as a liaison to the agencies. He has plenty of experience inside government: He was commissioner of the Internal Revenue Service from 1989 to 1992 and assistant secretary for tax policy at the Treasury Department in 1992. The insider ties helped Goldberg serve as a bridge last year when Skadden’s tax lawyers in New York and D.C. handled Fortress Investment Group’s initial public offering. In structuring the IPO, Skadden lawyers managed to avoid nearly all corporate tax on Fortress. When that raised concerns at the IRS, Goldberg was there to open the lines of communication. Goldberg, of course, isn’t the only Skadden partner with a lot of pull inside the government. Robert Bennett is Skadden’s Washington frontman, and may just be the best-known lawyer in the 1,900-attorney firm. “Having Bob being known as Mr. Skadden, Arps … it’s a tremendous advantage to us,” says office head Rogan. Bennett co-heads the 110-lawyer litigation department in D.C. and thinks of the group as a boutique nested within the larger firm. He came to Skadden in 1990 along with fellow D.C. litigation chief Carl Rauh, and he says the culture of their smaller firm came with them. Bennett acknowledges that Rauh does “an awful lot of the managing…. I’m more the outside guy, and he’s more the inside guy.” Bennett is clearly no stranger to the spotlight. He recently helped Sen. John McCain (R-Ariz.) handle the fallout from allegations of improper relations with a lobbyist. And he represents the CIA’s ex-clandestine service director Jose Rodriguez in congressional and Justice Department probes surrounding the destruction of interrogation tapes of terror suspects. Though he’s the best-known D.C. litigator, Bennett isn’t the only star in the group. Andrew Sandler leads the firm’s consumer financial services enforcement and litigation practice. His practice caught fire in the latter part of 2007 when the subprime mortgage market collapsed. He first began counseling financial institutions on fair lending back in the mid-1990s, and today, says the lawyers in his group represent clients in more than 30 different investigations and 10 class actions related to the subprime meltdown. Colleen Mahoney heads up Skadden’s securities enforcement and compliance practice. She has a long history at the Securities and Exchange Commission, where she was deputy director of the Enforcement Division from 1994 to 1998, before serving as the commission’s acting general counsel for a short time. She came to Skadden a decade ago. Lately, Mahoney’s group has had a lot of overlap with Sandler’s practice, since the SEC is behind many of the subprime investigations. She explains that her practice is “sort of a snapshot, or sort of a mirror image, of what the hot topics at the SEC are.” Aside from the subprime work, her group is presently focused on stock option accounting issues, insider trading investigations, representing hedge funds, and Foreign Corrupt Practices Act work. Litigation is the biggest practice group in Washington, but the office also houses the lion’s share of Skadden’s energy lawyers. The firmwide practice is based in the D.C. office, where about 50 of its 60 lawyers reside. Partner Martin Klepper describes the group as “one practice, split into two parts.” He belongs to the energy and infrastructure projects side; the other half of the practice has an energy regulatory focus. On the infrastructure side, Klepper says one of the biggest ongoing projects is for the state of New Jersey, where Skadden lawyers have been working with the state government to structure a deal that would transfer all major toll roads to a private nonprofit corporation. Energy regulatory partner John Estes III says his representation of client Energy Transfer Partners in a Federal Energy Regulatory Commission investigation, and numerous related civil actions, is one of the largest ongoing matters for his part of the practice. Estes came to Skadden in 1988 from the FERC, where he was an appellate litigator. Frequently, though, both sides of the energy practice team up. The partners say both groups are involved in work for utilities that are interested in building U.S. nuclear energy facilities — though they won’t reveal their client list. LEVERAGE AND LATERALS Skadden’s stability in D.C. also has a lot to do with its partnership structure. Of the seven single-tier partnerships on the D.C. 20, Skadden’s 4.15:1 leverage is near the top of the list. Only Sidley Austin has a higher ratio of nonpartners to partners. While Skadden’s leadership doesn’t dole out the coveted golden handshake to just anyone, once a partner is in the club, he or she is likely to be there for good. After all, when you’re making more than $2 million a year, why go anywhere else? Rogan joined Skadden as an associate in 1980 after five years at the SEC. He has spent his entire private practice career at Skadden, and the same is true for much of the Washington partnership. Two of the three lead D.C. partners on the BHP Billiton deal, for instance, are also lifers. Crisman became the fifth lawyer in Washington, when he joined as an associate in 1978. And Barusch started as an associate in Skadden’s Boston office in 1978, and moved to Washington in 1981. Though a few retired during the past year, and one went in-house, Skadden only lost one partner in 2007 to another firm. Media and intellectual property partner Kenneth Kaufman departed for Manatt, Phelps & Phillips. For his specific practice area, he says there was just more opportunity at Manatt. “At Skadden, we certainly worked on a number of very interesting matters in this area, but I was probably the only partner with a significant background in entertainment law,” he says. The office also has brought on a couple recent laterals. Antitrust partner Steven Sunshine just completed his first year at the firm, after joining from Cadwalader, Wickersham & Taft, where he was head of the antitrust group. Sunshine has been busy representing diamond cartel De Beers against several class actions in New Jersey federal court — work he brought over from Cadwalader. And last Thursday, the office announced that Greg Luce, previously co-chair of Jones Day’s health care practice, has joined Skadden to lead the health care enforcement and litigation practice. Clearly, though, 2008 may not be the best year ever for Skadden. BHP Billiton aside, its transactional practices are getting battered like everyone else’s. “The pipeline, I would say, isn’t as full as it’s been,” says Rogan. “Whether the second half of the year, we keep pace with the first half, we’ll have to see.” If not, No. 1 in D.C. may still be a few years away.
Marisa McQuilken can be contacted at mmcquilken@alm.com.

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