Scott Barshay (Photo copyright Matt Greenslade/photo-nyc.com)
Instantly reshuffling the decks of top deal advisory work, M&A powerhouse Scott Barshay has joined Paul, Weiss, Rifkind, Wharton & Garrison from Cravath, Swaine & Moore, where he spent his entire career.
Barshay broke records by serving as lead adviser on a staggering $292 billion in M&A transactions last year alone—roughly a third of Cravath’s $927 billion in announced deals in 2015. The American Lawyer highlighted 50-year-old Barshay’s frenzied year of dealmaking in its April issue.
Barshay began work at Paul Weiss on Friday and will serve as his new firm’s global head of M&A. No associates or other partners will be joining him in the move, Paul Weiss confirmed. A spokesperson for Cravath said the firm wished him well.
The move could carry a significant impact for both firms. Though strong in M&A, Paul Weiss ranked 20th on the Bloomberg legal advisory league tables in global announced deals last year, behind Hogan Lovells and Linklaters. Cravath ranked second, partly thanks to Barshay’s clients.
Reached by telephone over the weekend, Barshay noted that Cravath retains a lot of top M&A talent, including the co-heads of the M&A department, Faiza Saeed and Robert Townsend III. He also pointed to other stars at his former firm, including Richard Hall and Mark Greene.
“While I’ve very much enjoyed practicing law at Cravath, I am thrilled to join Paul, Weiss, a firm I’ve long admired,” Barshay said in a statement. “Paul Weiss’s wide range of highest quality practices and extraordinary lawyers will be invaluable in serving the needs of our clients.”
Unlike Paul Weiss, a full-service firm with nearly 1,000 lawyers, most of Cravath’s 472 lawyers are focused on high-end M&A and litigation. The elite Wall Street firm doesn’t offer Paul Weiss’s diversity of practices, including its bench in regulatory work and private equity.
Barshay’s move is also notable because so few partners leave Cravath for rival firms. In 2015, bankruptcy partner Richard Levin left for Jenner & Block. In 2012, Jeffrey Smith, the firm’s former environmental practice leader, joined the New York office of Crowell & Moring. But Barshay’s jump to Paul Weiss may rank among the most prominent departures since David Boies left to start his own litigation boutique in 1997.
More frequently, the rare Cravath partners who’ve left the firm have gone to banks or the government.
In 2010, the firm lost four partners when Francis Barron, Ronald Cami, and Julie Sweet left for top in-house jobs at Morgan Stanley, TPG Capital, and Accenture, respectively, while litigator Katherine Forrest became the Justice Department’s deputy attorney general for antitrust. (Forrest was appointed to the federal bench in 2011.)
Among those who made a leap to Wall Street are M&A heavyweight James Woolery, who decamped to JPMorgan Chase in 2011, and later returned to Cadwalader to run the firm before abruptly departing in 2015; and Lewis Steinberg, who joined UBS in 2005 (with a brief detour to Linklaters).
Unlike Cravath, which has a pure lockstep model of compensation, Paul Weiss has a modified lockstep and a significant bonus pool, allowing the firm’s largest rainmakers to earn far higher incomes.
Cravath has had a few down years in profitability growth since the global financial crisis, though last year it posted modest growth in profits per equity partner. By comparison, Paul Weiss posted its 20th straight year of higher profits last year, topping $4 million profits per partner.
Barshay’s significant M&A representations over the past year include advising 3G Capital and H.J. Heinz in the $60 billion Kraft-Heinz merger; Anheuser-Busch InBev (ABI) in its $107 billion acquisition of SABMiller; Cameron International in its $15 billion sale to Schlumberger; Honeywell in its $90 billion proposal to acquire United Technologies; and Starwood Hotels in its contested pending $13.6 billion sale to Marriott International.
Along with his client list, Barshay brings several ongoing transactions to his new firm. He continues to represent ABI and Starwood, and he is advising medical diagnostics client Alere on its $8 billion purchase by Abbott Laboratories, in addition to other non-public matters, he said.
“Scott is widely recognized as one of the country’s leading M&A lawyers, advising the world’s largest companies on their most complex corporate transactions and governance issues,” said Paul Weiss chair Brad Karp. “We are delighted to welcome Scott to our firm.”