White-collar attorneys are hot commodities right now in Pennsylvania, thanks in large part to the value they can add to firms beyond what is traditionally thought of as "white-collar defense."
Over the past year, spurred on by both an uptick in government enforcement activity and clients' increased attentiveness to compliance, several large Pennsylvania firms including Dechert, Ballard Spahr, Pepper Hamilton and Eckert Seamans Cherin & Mellott have looked to both the lateral market as well as to government agencies for new recruits who are well-versed in the areas of corporate compliance and government enforcement.
In some instances, the moves involved acquiring whole firms. In what has been an otherwise quiet lateral market in Pennsylvania, white-collar lawyers continue to be pursued with great interest from firms.
"I think most firms who have not had that kind of practice want one and those who have one are generally trying to grow it," said Richard L. Scheff, chairman of Philadelphia-based Montgomery McCracken Walker & Rhoads.
The firm leaders and practice heads The Legal spoke to said they plan to remain aggressive in the white-collar and corporate compliance space because those services are among the foremost needs of their clients.
Where firms look to hire from when growing their white-collar practices largely depends on the size and scope of each firm's existing white-collar presence.
Recruiter Frank D'Amore said the days of tapping an attorney in government to spearhead your firm's fledgling white-collar practice are largely gone because firms can no longer afford the risky proposition of attempting to build a practice without an existing book of business.
But for firms with more established white-collar practices, D'Amore said, hiring from government positions makes sense.
And while those attorneys obviously don't bring their own clients with them, the firm leaders and practice group heads The Legal spoke to said white-collar lawyers who come straight from government have their own unique advantages.
For example, Thomas M. Gallagher, chair of Pepper Hamilton's white-collar litigation and investigations practice group, said the "secret advantage" lawyers who come straight from government have over laterals is that they often tend to have the "freshest connections and contacts with people still in government."
That familiarity with current enforcement authorities is a "nice calling card" for attorneys, Gallagher said.
In addition, firm and practice group leaders said, white-collar attorneys are easily adaptable to practice areas beyond white-collar defense, making them extremely valuable regardless of whether they're lateral hires.
Scheff, who focuses his own practice on white-collar defense and government investigations, said attorneys who are experienced in internal corporate investigations and criminal trials stemming from government action have a lot of "transferrable skills."
"If I take someone with an investigative or criminal background, I know that person can not only do internal investigations, handle criminal investigations and can give advice as far as compliance, but to the extent there's a private civil lawsuit in need of a skill set of investigations, that's someone who has been on their feet and can ask questions or cross-examine witnesses," Scheff said, adding that while white-collar attorneys might not be as well-versed in civil procedure as a commercial litigator might be, combining the expertise of the two attorneys can be highly effective.
"Not everyone who has that background necessarily wants to do that kind of work, but it can be very lucrative," Scheff said.
Stephen S. Stallings, who joined Pittsburgh-based Burns White in 2011 as chair of its white-collar and government enforcement practice group after years of running a solo practice, said his caseload always includes a significant amount of commercial litigation.
Daniel O'Donnell, chief executive officer of Dechert in Philadelphia, said more and more large firms have been looking to white-collar attorneys, particularly those who came from government positions, to bolster the number of lawyers who have significant first-chair trial experience.
O'Donnell said it's very difficult for large firms to develop that kind of experience from within because the majority of major civil suits never make it to trial.
"And yet, of course, if you want to be successful in civil litigation you need to have people who actually have deep trial experience because while most cases don't go to trial, some do," O'Donnell said. "If you look back, the U.S. Attorneys' Offices in this country have historically been able to attract people who are highly credentialed, ambitious and extremely talented. Most of those people cut their teeth trying white-collar type cases. What you're seeing is the major law firms needing to add to their overall trial experience pool and taking people from U.S. Attorneys' Offices."
White-collar attorneys' skills can be useful in other areas as well, firm leaders said.
Andrew C. Kassner, executive partner of Philadelphia-based Drinker Biddle & Reath, said most of the firm's white-collar attorneys have subspecialties.
For example, Kassner said, Ronald A. Sarachan, the co-chair of Drinker Biddle's white-collar and internal investigations team and the former chief of the environmental crimes section of the U.S. Department of Justice, is well-acquainted with environmental law in both criminal and civil litigation contexts.
Kassner said the firm has a system in place to facilitate a consistent dialogue between civil litigators and white-collar attorneys so that civil matters with the potential to lead to white-collar criminal investigations can be identified and dealt with accordingly.
Henry E. Hockeimer Jr., chair of Philadelphia-based Ballard Spahr's white-collar defense and internal investigations group, said Thomas W. McNamara, a white-collar partner in the firm's San Diego office, has done a significant amount of receivership work.
Meanwhile, Gallagher said white-collar attorneys at his firm are often deployed to conduct due diligence and assess risk in corporate transactions, particularly those that are governed by the Foreign Corrupt Practices Act of 1977.
Of course, the main focus for all white-collar attorneys at large law firms remains white-collar work and, according to the firm leaders The Legal spoke to, there is plenty of that work to go around, though it may look a bit different now than it did a few decades ago.
Nearly all of them said the white-collar practice has accelerated in recent years due to factors such as the recession and increasingly aggressive government enforcement efforts, particularly in the financial, health care and pharmaceutical sectors.
But a number of attorneys noted that the uptick in white-collar work really began as far back as the 1980s.
"For quite some time this is an area of the law that has been busy and growing," Scheff said. "Largely, that has been because of increased government activity in this area. You can pick an industry — whether its pharmaceutical, banking, any regulated industry — and it has seen over the years a significant uptick in enforcement activity."
Since then, lawyers said, the practice has grown and changed in response to increasingly tough anti-corruption laws and a number of significant corporate scandals.
"The fact is, there are more federal crimes today than there ever have been and every piece of legislation that affects business — Sarbanes-Oxley, Dodd-Frank — includes the potential for criminal sanctions or at the very least significant government enforcement action that could have a major impact on clients' business or their very existence," O'Donnell said, adding that international white-collar laws, particularly in Europe and Asia, have also gotten more strict over the years.
In addition, high-profile corporate scandals like the Enron and Arthur Andersen collapses, as well as the KPMG tax shelter fraud investigation, have made corporate compliance a frontburner concern for clients, O'Donnell said.
The result, Scheff said, has been a maturation of the corporate world, where companies are now being more proactive about identifying and remedying internal problems often before the government even steps in.
That means white-collar attorneys are now spending more time helping clients to conduct their own internal investigations before the government ever gets involved, attorneys said.
In fact, Hockeimer said his firm is often asked to take even more pre-emptive measures than that, including reviewing clients' compliance programs and keeping them abreast of trends in government enforcement.
"Most clients don't want to have surprises," Hockeimer said.