Zachary Carter watches as Cyrus Vance Jr. announces his Candidacy for District Attorney of New York County.
Zachary Carter watches on as Cyrus Vance Jr. announces his candidacy for District Attorney of New York County. (Rick Kopstein)

A year after an abrupt management change began a firmwide restructuring, three practice group leaders have recently left Dorsey & Whitney for positions elsewhere.

The first of the trio to announce his departure was Zachary Carter, a former U.S. Attorney for the Eastern District of New York and current cochair of Dorsey’s white-collar crime and civil fraud practice who will leave the firm at month’s end to become New York City’s new corporation counsel under Mayor Bill de Blasio.

Leaving this week, meanwhile, are private equity chair Christopher Bellini, who is joining Cozen O’Connor’s new Minneapolis office, and IP litigation cochair Paul Ackerman, who is moving to Andrews Kurth’s New York office with fellow IP litigation and patent prosecution partner Gary Abelev. A fifth Dorsey partner, Denver-based patent specialist Timothy Worrall, has joined Polsinelli, though his move has not yet been officially announced.

Ackerman, Abelev and Carter did not respond to The Am Law Daily’s requests for comment about their respective moves, and Bellini, a former Piper Jaffray banker elected to Dorsey’s partnership as an income partner in 2010, declined to comment. An email sent to Worrall at Polsinelli yielded an autoreply message that he is traveling this week. His Dorsey bio has been removed from the Minneapolis-based firm’s website.

Asked about the losses, Dorsey managing partner Kenneth Cutler downplays their impact. “We have more than 60 practice groups here, so we give out a lot of titles,” he tells The Am Law Daily. “We don’t want anyone to leave, but we have plenty of people here capable of generating business.”

Still, though the defections come at what is always a busy time of year for lateral moves across The Am Law 200—largely because January marks the start of a new fiscal year for most large firms—they represent the latest in a steady stream of Dorsey departures.

More than a half-dozen senior partners retired from the firm on Jan. 1. Among those stepping down were 37-year veteran Robert Dwyer Jr., a New York–based corporate partner tapped last year to head Dorsey’s lateral recruiting efforts. The other recent retirees include former Denver office head Steven Merker, public finance partner Verlane Endorf, tax partner John “Jack” Windhorst Jr. and former Southern California office leader Christian Dubia, who resigned from the partnership for medical reasons.

Yet another retiree, Minneapolis-based health care and M&A partner Paul Torgerson, has joined St. Paul–based nonprofit hospital chain HealthEast Care System as general counsel and chief administrative officer. (Dorsey now does work for HealthEast Care, whose most recent tax filing shows it paid $1.2 million for legal services in 2011 to St. Paul–based Moore, Costello & Hart, one of Minnesota’s oldest firms until closing its doors in 2012.)

Dorsey also suffered a loss in its nonlawyer executive ranks last year when Richard Holdrup, the chief financial officer it hired in October 2012, left over the summer to become chief operating officer of Am Law 200 rival Dykema Gossett. Dorsey replaced Holdrup—who did not respond to a request for comment about his decision to switch firms after only a few months—in late 2013 with former Gardere Wynne Sewell CFO Robert “Skipp” Swayze.

Cutler says that despite the departures, his firm’s gross revenue rose last year for the first time in six years, even as market conditions for large firms remain challenging.

“Revenue was up $13 million last year, and our [revenue per lawyer] and [profits per partner] numbers are also up,” says Cutler, who was elected to a three-year term as managing partner in late 2012 after his predecessor Marianne Short left to become general counsel of Minnetonka, Minn.–based health insurance giant UnitedHealth Group, a longtime Dorsey client.

(The Am Law Daily will begin publishing stories based on its early reporting about the 2013 finances of Dorsey and the nation’s other largest firms within the next few weeks. The American Lawyer is set to publish this year’s edition of its annual Am Law 100 rankings in May, with the Am Law 200 rankings to follow in June.)

Short, who did not respond to a request for comment, joined UnitedHealth just weeks after being reelected as Dorsey’s leader in a development that three former partners say stunned many at the firm. While acknowledging that the transition was sudden, Cutler says Short’s move was a critical one for both her and Dorsey given UnitedHealth’s importance as a client.

According to three former partners and another ex-Dorsey employee, maintaining client relationships could prove tough for the firm as more senior partners join the latest batch of retirees in heading for the door.

While joking that “we’ve got a lot of older guys,” Cutler refutes the notion that age is a significant problem for the firm and notes that a new generation of talent—11 Dorsey lawyers became partners as of Jan. 1—is ready to play a bigger role serving a client roster that, in addition to UnitedHealth, includes Best Buy, Canon and U.S. Bank.

Dorsey also continues to handle work related to the $975 million construction of a new stadium for the National Football League’s Minnesota Vikings, was retained by Utah-based Profire Energy as its primary outside counsel late last year and recently advised on a $1.4 billion deal for the Minnesota-based Mosaic Company, the largest producer of potash and phosphate fertilizer in the U.S.

Competition for some of those clients is something Dorsey will have to contend with on its hometown turf given that larger Am Law 200 rivals like Cozen, Dykema and Hogan Lovells have all opened Twin Cities outposts in recent years. Complicating matters further is the fact that the arrival of new players in the local market has coincided with a sharp drop in Dorsey’s overall head count, which suffered one of The Am Law 100′s sharpest drops by falling from 735 in 2002 to 531 in 2012, according to a report by sibling publication The National Law Journal.

The losses continued last year, with The Am Law Daily reporting in March 2013 on the defection of Dorsey’s U.K. tax practice to London boutique Hage Aaronson. (The latter firm changed its name to Joseph Hage Aaronson late last year after hiring former Fried, Frank, Harris, Shriver & Jacobson partner Gregory Joseph in New York.)

Those leaving in London did so shortly after Dorsey confirmed that 2012 had been another disappointing year financially, with gross revenue slipping 3.1 percent to $313.5 million and profits per partner sliding 8 percent to $515,000, according to our previous reports.

More partners exited on the heels of those results. All told, according to data compiled by RivalEdge—a company bought by Am Law Daily parent ALM Media LLC in 2012 that tracks legal industry moves—Dorsey has lost about two dozen partners since Jan. 1, 2013, including those that have left already this year.

Last year’s defectors moved to other Am Law 100 firms such as Bracewell & Giuliani; Haynes and Boone; Morgan, Lewis & Bockius; Squire Sanders; and Venable. (Dorsey edged out Haynes and Boone to land at No. 99 on The American Lawyer’s 2013 Am Law 100 list.)

Some of Dorsey’s 2013 losses had nothing to do with the practice of law. Roger Magnuson, the head of the firm’s national strategic litigation group and a longtime advocate for prominent Republican causes whom Cutler describes as one of the most brilliant lawyers he ever worked with, died in November at 68 following a lengthy battle with melanoma. Trygve Kjellsen, a corporate partner who joined Dorsey last year from Faegre Baker Daniels, died that same month at 42. The firm’s longtime pro bono director, Bricker Lavik, died at 62 on March 1. Dorsey hired Lawrence McDonough to succeed him last summer.

Head count figures notwithstanding, Cutler takes issue with the suggestion that Dorsey is shrinking. Asked, for instance, about the closure of the firm’s office in Sydney late last year, he notes that the lone partner based there, M&A expert John Chrisman, has relocated to Hong Kong.

Cutler also insists that the Dorsey brand remains strong brand throughout the Midwest and Pacific Northwest—former Democratic vice presidential candidate and American Lawyer Lifetime Achiever Walter “Fritz” Mondale remains senior counsel in its Minneapolis base—and that the firm is committed to growth.

Along those lines, Dorsey made some lateral hires of its own last year, most recently adding adding real estate partner Mark Durrant in Salt Lake City from local firm Ray Quinney & Nebeker in December. Also coming aboard in Salt Lake last month was former LeBoeuf, Lamb, Greene & MacRae restructuring partner Lon Jenkins, who joined Dorsey as of counsel from Utah’s Jones Waldo.

Last year’s other incoming laterals included Pinsent Masons M&A partner Alan Farkas and Katten Muchin Rosenman real estate partner Sloan Kelly in London, corporate partner Whitney Holmes in Denver from Morrison & Foerster and regulatory affairs partner Thomas Lorenzen from the U.S. Department of Justice in Washington, D.C. (Nolan Taylor, who had been of counsel with Dorsey while conducting a Mormon mission in Oklahoma, returned to the firm’s Salt Lake office in August.)

Amid the churn, Cutler says reversing Dorsey’s financial slide remains his primary focus, and three former partners credit him with making long-overdue changes, such as tying the compensation of practice leaders to their group’s performance. One former partner praised Cutler for knowing what “Dorsey is really about,” but expressed concern about who would lead the firm once the 66-year-old firm leader steps aside.

Dorsey’s 11-member policy committee selects the firm’s managing partner, who then chooses his own managing committee that serves a cabinet-like function. Carter, who will soon become New York City’s top in-house lawyer, was a longtime policy committee member that a trio of Dorsey alums say many at the firm thought might one day could become managing partner. At the same time, these sources say they see the logic in Carter, a prominent de Blasio backer with a history of public service, leaving for a high-level government post.

As Dorsey—which earlier this month signed a lease to remain the anchor tenant at the downtown Minneapolis office tower that serves as its headquarters—works to find its footing, local rivals Faegre & Benson and Leonard, Street and Deinard have both recently completed mergers. (Faegre announced its tie-up with Baker & Daniels in 2011, while Leonard Street became part of the new Stinson Leonard Street on Jan. 1 after merging with Stinson Morrison Hecker, according to our previous reports.)

Four former Dorsey partners and staffers told The Am Law Daily this week that the firm has held merger talks with several firms in recent years without finding a partner. Two cited Dorsey’s unfunded pension plan—relatively common among Am Law 100 firms and the subject of a feature story by The American Lawyer two years ago—as getting in the way of potentials deals. (Unfunded pension plans have scuttled many large firm merger discussions in recent years.)

Dorsey confirmed that its pension plan is unfunded, but declined to comment about merger partners or succession planning. The firm has focused instead on making smaller moves, forging a union with San Francisco IP shop Flehr Hohbach Test Albritton & Herbert a decade ago and picking up five lawyers last year from a Silicon Valley bankruptcy boutique Murray & Murray. Dorsey also inked an alliance with a Chinese firm in 2011.

Cutler himself says Dorsey, like many members of The Am Law 100, has had its share of discussions with other firms, but “won’t do anything unless it fits strategically and culturally.”

Noting the demise of Dewey & LeBoeuf, Cutler says he is wary of ending up with the wrong partner. He also says that as long as he in in charge, Dorsey is “not interested” in a deal that involves the firm becoming part of the increasingly popular yet controversial Swiss verein structure employed in many large international tie-ups. “I don’t understand how the model works,” Cutler adds. “It’s not in the cards [for us].”