January 11, 2012 5:11 PM
In Rare Move, Cravath Partner Leaves Firm for Crowell
Posted by Brian Baxter
CORRECTION: 1/12/11, 10:35 a.m. EST. The original version of this story omitted in the eighth paragraph Cravath's hire of Christine Varney from the Justice Department last year. We regret the error.
Jeffrey Smith, the former head of Cravath, Swaine & Moore's environmental practice, left the firm as of January 2 to join the New York office of Crowell & Moring, which officially announced his hiring Wednesday.
Smith founded Cravath's environmental group 20 years ago as a lateral hire from Philadelphia's Clark, Ladner, Fortenbough & Young. (Clark Ladner dissolved in 1996, with the firm’s key players joining Pepper Hamilton.)
Two decades after joining one of the nation's most prestigious firms, the 59-year-old Smith says he faced a "difficult choice" about whether to leave Cravath, but that his "entrepreneurial spirit" couldn't resist what he calls the "diversity of opportunity" presented by Crowell's offer to join its corporate and environmental and natural resources practice groups.
Having lateraled both into and out of Cravath, Smith has accomplished two rare feats. Movement in either direction is not something that happens with any frequency at the firm, whose profits per partner of nearly $3.2 million in 2010 put it in the top tier of The Am Law 100.
Cravath did lose four former partners in 2010 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 departed to become the Justice Department's deputy attorney general for antitrust. (Forrest was appointed to the federal bench last year.)
Cravath partners have also left for the lucrative world of Wall Street banking. Among those to make that leap: M&A heavyweight James Woolery, who decamped to JPMorgan Chase last year, and Lewis Steinberg, who joined UBS in 2005 (with a brief detour to Linklaters).
Lateral departures of the non-David Boies variety to rival firms have been scant. One notable exception: structured finance expert Daniel Cunningham, the former managing partner of Cravath's London office, who left for Allen & Overy in 2001. Cunningham became senior partner and cohead of A&O's global U.S. practice before jumping from the Magic Circle firm to Quinn Emanuel Urquhart & Sullivan two years ago.
On the inbound side, Cravath, which prefers to promote internally, made its last major lateral hires in September by bringing on Christine Varney from the Justice Department's antitrust division and former Skadden, Arps, Slate, Meagher & Flom bankruptcy partner Richard Levin four years earlier to launch a restructuring practice. (Cravath replaced Steinberg with Willkie Farr & Gallagher tax partner Andrew Needham in 2005 and last August promoted Matthew Morreale to partner to head the environmental practice within the firm's corporate group.)
At Cravath, Smith helped build up its environmental practice, which he acknowledges "ebbed and flowed" between about a half-dozen to a dozen lawyers at various points. While at Cravath, Smith says he worked closely with former firm partner—and erstwhile First Solar and Solyndra general counsel—John Gaffney, who joined Gibson, Dunn & Crutcher in November, according to our previous reports.
Over time, Smith says that his practice gradually evolved into one that encompasses more regulatory and environmental policy work, something he says made it less than an ideal fit for a firm divided almost entirely between pure litigation and transactional counsel. While Cravath maintains offices in New York and London, it does not have a physical presence in Washington, D.C., where many environmental legal matters are handled.
At Crowell, Smith will work out of the firm's New York office, something he says was a key selling point as he considered the various firms vying for his services. (Smith confirmed that a legal recruiter helped him in his search for a new employer, but declined to name the agency he used.)
Instead of working to support a larger M&A group as he did at Cravath, Smith says he will now be able to step outside the predominantly New York–focused transactional box and engage in broader debates about environmental initiatives.
Smith says his clients generally come from the oil and gas, chemical, manufacturing, and financial services sectors, and notes he is looking forward to working with a similar roster of companies at Crowell. Among the challenges presented by his new position, he says, is creating a "hybrid" practice that combines Beltway expertise with transactional know-how within the firm's environmental group.
At Cravath, Smith advised on such transactions as specialty chemicals company Ashland's $930 million sale of its global chemicals distribution business to a unit of buyout shop TPG Capital, and Universal Health Services' $2 billion acquisition of mental health clinic operator Psychiatric Solutions.
At his new firm, Smith is joining a 50-lawyer environmental and natural resources practice that is among the most sought-after in the field as a result of their efforts advising clients on a range of legal issues, according to our previous reports.
Last year, former Wyoming governor David Freudenthal joined Crowell's environmental group as senior counsel to advise clients on climate change, oil and gas production, and hydraulic fracturing. The firm, which has six offices in the U.S. and outposts in London and Brussels (as well as strategic alliances in Egypt and Saudi Arabia), is an Am Law 100 rarity in that it has an office in Anchorage, having picked up five environmental partners there from Patton Boggs in 2009.
According to the most recent Am Law 100 financial data, Crowell saw gross revenues decrease by 3.4 percent last year to $327.5 million, while profits per partner dropped 15.1 percent to $900,000. The Blog of Legal Times, a sibling publication, attributed much of the drop-off to a decrease in contingency fee income for Crowell in 2010.Make a comment