When Simpson Thacher & Bartlett attorney Kenneth E. Young was looking in 2006 to move his family from New York to Philadelphia, he was searching for a law firm environment in the city that would most closely resemble the type of high-end corporate work he was handling at his Wall Street firm.
Six months into working from Dechert's Philadelphia offices near 30th Street Station, Young soon came to realize he was working on the opposite side of the table from his old firm on the same large-scale transactions and financings.
"I could continue to have this sophisticated practice that was really important to me and get to live in the city I wanted to live in," Young said of his switch to Dechert.
In fact, most of Dechert's longtime corporate clients — and there are several — connect with partners in the firm's Philadelphia office even though the work is often handled by teams of Dechert lawyers around the globe created specifically for that client.
While Dechert is often involved in the blockbuster corporate deals that fill the business pages of many newspapers, its work goes far beyond one-off transactions to include years-long partnerships focusing on clients' business development initiatives.
"We got started representing industrial companies in Pennsylvania when being an industrial company in Pennsylvania meant something," Dechert corporate and securities department Chairman Henry Nassau said of the firm. "As the regional economy has migrated to more of a service economy, so many of the businesses faded away."
In the late 1970s, Dechert began shifting its focus, too. The firm started handling more transactional work and, increasingly over time, the corporate department handled less of the routine securities filings associated with corporate practices and more of a client's overall acquisition strategy, Nassau said. For a subset of the firm's clients in the private equity space — a key practice for Dechert — buying businesses is their business.
"That is a business model that requires more legal assistance and input every step of the way," Nassau said.
Not only does Dechert's client roster keep the firm's corporate attorneys busy on a more regular basis, it requires they be business advisers as much as legal representatives.
The KKR Transformation
One of the best examples of that dual approach came through the firm's representation of KKR & Co. L.P., one of the world's leading private equity firms. Just as Dechert saw its corporate practice transform over the years, KKR had to make changes to its business model. KKR historically focused on private equity deals — particularly leveraged buyouts.
That model started to face challenges as pension funds — the main investors in private equity funds — began to take a backseat to more individualized defined contribution plans, such as 401(k) plans.
Coupling that with the fact that regulatory changes have caused private equity companies to engage in more public filings, KKR was looking to expand its investment opportunities beyond big-money investors to include a larger volume of smaller investments, as well as more public offerings.
Young had handled private equity matters for KKR while at Simpson Thacher and knew KKR was going through this diversification. He organized a team of corporate lawyers at Dechert that included Daniel O'Donnell, then head of the practice and current CEO of the firm, to meet with KKR to talk about its options.
Young said a lot of firms were approaching KKR to help, but from a "silo" perspective — they could help on either private equity or '40 Act expertise. Dechert, he said, has a deep bench strength in both private equity work and work on registered securities regulated under the Investment Company Act of 1940.
The Dechert and KKR teams sat around with a white board brainstorming ideas — something they still do to this day — and the result was Dechert being hired to help launch in 2011 a $1.5 billion offering of shares in a newly formed business development company, Corporate Capital Trust Inc. Dechert's attorneys have continuously worked for the business, handling leveraged finance transactions, regulatory and securities matters.
One deal led to another and Dechert soon found itself as a key adviser in helping KKR "go retail."
While registering a new fund typically takes three to four months, Dechert's team got two done in 90 days. The group created a high-yield, open-end mutual fund geared toward individual investors and a corporate opportunity fund that fell somewhere between the mutual fund and KKR's typical pension fund investor market.
Dechert's team approach, spending time with clients on research and design, has added that extra value, Young said.
"We spend a lot of time with them thinking about what works and what is next," Young said. "As a lawyer, that's so much more fun than getting a call that says, 'Here's the deal, go do it.'"
And the complicated nature of the work and how it fits into KKR's larger business model gives the firm a chance to show off its full capabilities, Young said.
"One of the things we like to focus on is that sort of concept of don't just call us to do your deals, but how can we be partners and really integrate the teams?" Young said.
Last fall, for example, Dechert set up a training program for the junior analysts at client Court Square Capital Partners. Senior Dechert lawyers spent two days running through a private equity deal "soup to nuts," Young said.
It's Dechert's soup-to-nuts approach to client service that has landed it many repeat customers.
Partnership for Success
For years, Dechert has represented Apple in Trademark Trial and Appeal Board proceedings and appeals involving trademarks iPhone, iCloud, the iTunes logo and the tagline "There's an App for That." Dechert Philadelphia partner Glenn Gunderson has led that representation for the firm.
In 2012, Dechert teams led by Philadelphia partners Jason Rozes and David W. Forti represented Bank of America and Barclays Bank and UBS Real Estate Securities in two separate deals regarding a combined origination and disposition of mortgage and mezzanine loans totaling nearly $2 billion.
By May 2011, a team of corporate M&A and finance and real estate attorneys helped close a $3.1 billion acquisition of the real estate assets of Atria Senior Living Group on behalf of client Ventas, a health care real estate investment trust. The deal required state licensing in 24 states for 118 senior care facilities.
Since 2011, Dechert has represented Franklin Square Capital Partners and its various entities through a team of corporate and securities, employee benefits, labor and employment, tax and litigation attorneys. Most recently, the team, led by Philadelphia-based partner James Lebovitz, represented FS Investment partners in a $2.6 billion common stock offering, FS Investment Corp. II in a $2 billion offering and FS Energy & Power Fund in a $1.5 billion offering.
Philadelphia-based partner William Lawlor has led the firm's efforts in representing both Crown Holdings Inc. and Crown Cork & Seal Co. Dechert has represented Crown Holdings for decades, handling nearly every domestic and cross-border transaction and financing the company has pursued.
The firm said acting as the company's primary corporate counsel has created efficiencies, as the firm is intimately familiar with Crown Holdings' corporate and tax structure. The firm has created an interdisciplinary team of lawyers dedicated to handling Crown's matters. Most recently, it handled a $1 billion bond offering.
The firm's corporate work is continuing strong into 2013. Dechert is currently representing investment bank Evercore Group LLC, the financial adviser to Clearwire Corp., in connection with Sprint Nextel Corp.'s acquisition of Clearwire and a rival offer from Dish Network Corp. Young is leading that deal.
Not an Easy Road
Corporate work for any firm hasn't been easy to come by since the economy tanked in 2008. That was acutely felt at Dechert, where real estate finance — particularly work on commercial mortgage-backed securities — was a major practice.
As Nassau put it, "We lived through the valley of death" when it came to the real estate practice. The practice went from 130 attorneys to 60 in a matter of months. But Nassau said that group has been the fastest growing at the firm in the last 12 months, with many expecting the collateralized loan obligations market to grow exponentially in the next year.
It was the hardest five years Nassau ever faced in his more than 30 years of practice. He said the firm pushed through by expanding to other regions of the globe where the economy wasn't so bad and moving into practice areas that were stronger, such as health care and natural resources.
"We didn't have a strategic plan of how we'd diversify," Nassau said. "We followed the money."
Dechert has long had a strong mutual funds practice based out of Washington, D.C., and London and deep bench strength in the private equity world, with historic roots in Philadelphia. Nassau said it was only in the last 10 years that those two practices have started to converge. That convergence has led to more sophisticated work for the firm, such as what it has been handling for KKR, he said.