(Photo: Diego M. Radzinschi/ALM)
In what Cadwalader, Wickersham & Taft has called an attempt to refocus on its core clients, the Wall Street firm confirmed Thursday its withdrawal from bases in Beijing and Hong Kong.
It’s the third major firm in the past 15 months to pull back from China, an increasingly tough market for foreign outfits. In mid-2015, firms, Fried, Frank, Harris, Shriver & Jacobson closed its outposts in Hong Kong and Shanghai, while Chadbourne & Parke shuttered its office in Beijing that same year.
Some 25 lawyers, including four equity partners, will be affected by Cadwalader’s decision to close up shop in China. The firm told The American Lawyer that its two offices in the country will officially shut their doors by year’s end.
Cadwalader’s looming closures, first reported Thursday by Bloomberg Big Law Business, was made by an expanded management committee convened this past summer to determine the best way to move the storied firm forward after a string of recent exits.
Lawyers at the firm first learned of the decision Thursday morning, when Cadwalader managing partner Patrick Quinn explained that a committee of partners, including an eight-member management committee, had taken “stock of what has worked and not worked for our firm over the past few years.”
Going forward, Quinn wrote in an internal memo obtained by The American Lawyer, the firm has decided to focus more narrowly on financial institutions, large corporations and private equity funds. The new focus, he noted, triggered the decision to close Cadwalader’s outposts in Asia. (The New York-based firm also has offices in Brussels, Charlotte, Houston, London and Washington, D.C.)
“It was a very difficult decision,” Quinn wrote. “We have very capable attorneys and staff in these offices—great lawyers and great people. However, by re-focusing the firm’s resources and investments on practices that are most closely aligned with our strategy, we can grow sustainably and with a higher degree of predictable success.”
Though Quinn wrote that demand so far this year is up, Cadwalader has shrunk considerably in recent months. The firm now lists 386 lawyers on its website, down 14 percent from the 448 lawyers reported by Cadwalader for The American Lawyer’s Am Law 100 rankings for 2015. After the 25 additional departures in Asia, Cadwalader will be left with about 360 lawyers, or almost half the size of the firm just before the financial crisis of 2008. (The Am Law 100 list excludes law clerks, staff attorneys and other non-lawyer professionals and advisors when determining head count.)
Cadwalader is increasingly looking like a securitization and structured finance-focused shop. The firm has 138 lawyers—more than a third of its current total—listed in that practice. The corporate group, Cadwalader’s second-largest, lists 109 professionals, though a number of them are cross-listed with other practices.
Meanwhile, Cadwalader’s litigation and antitrust sections have been decimated by defections, with a significant winnowing in bankruptcy and other practice areas. Since Jan. 1, at least 17 partners have moved on to other firms, including some with significant business.
The largest loss occurred in August, when a four-partner antitrust team led by one of the firm’s biggest rainmakers, Charles “Rick” Rule, decamped for Paul, Weiss, Rifkind, Wharton & Garrison. Earlier this week, Cadwalader corporate litigation chair Martin Seidel jumped to Willkie Farr & Gallagher, while the firm’s executive compensation head Steven Eckhaus left in early September to join McDermott Will & Emery.
Additions have been harder to come by at Cadwalader. The firm recruited King & Wood Mallesons’ European finance chief Jeremy Cross for its funds finance practice in London this summer, while capital markets partner Chris Gavin joined its New York office in February from Perkins Coie. Earlier this month, Cadwalader added Orrick, Herrington & Sutcliffe structured finance associate David Ridenour as special counsel in Washington, D.C.
In a conversation with The American Lawyer in early July, Quinn noted that Cadwalader was counting on organic growth to recoup losses. And in his email to the firm Thursday, he noted a few bright spots, such as the firm’s ranking in The American Lawyer’s Midlevel Associates Survey rising to 9th nationally this year, up steadily from 127th three years ago. Cadwalader also elevated five associates to partner this year.
The firm is now looking to some of its younger partners to lead the way forward. Quinn announced that Richard Brand, 36, a former M&A partner at Kirkland & Ellis, has been promoted to co-chair the firm’s corporate department, while Yushan Ng, 39, will co-head its restructuring practice. Brand and Ng were also part of the firm’s special strategic review committee.