When Debevoise & Plimpton trusts and estates lawyer Jonathan Rikoon began job hunting earlier this year for the first time since 1995after being informed by Debevoise management that the firm no longer wanted to support private client workhe had no idea what to expect.
"I've been cocooned in one practice for so long, it was a great surprise that there was a large number of firms that were interested in our practice," Rikoon said Monday. Conversations with 20 firms and follow-up interviews with a handful of those ultimately led him to Loeb & Loeb, which announced Monday that a seven-lawyer group led by Rikoon and partner Cristine Sapers, currently counsel at Debevoise, will join the firm's New York office next month.
The move is part of a broader trend that has seen some top-tier firms shedding trusts and estates practices that tend to be more top-heavy and difficult to leverage. Rikoon says that as time passed, he and his group were particularly out of sync with Debevoise's lockstep culture. Rikoon, 57, says he was paid the same as others with comparable seniority and had to charge rates of more than $1,000 per hour, even if doing so didn't always fit with his practice. And though private client work sometimes leads to referrals for deal work and other matters, Rikoon says Debevoise's focus on $1 billion-plus transactional assignments made such referrals unattractive. Loeb, by contrast, is "eager" to take in such ancillary work, he says. (At Loeb, he adds, his group will also charge rates 15 percent to 20 percent lower than they do now.)
"There's a lot about the business of practicing law that, really, I never learned," he says of working in a lockstep firm, adding that "as either an employee or partner at a lockstep firm, one can actually get complacent. I probably got too complacent." During the search process, in which he was aided by Mestel & Company consultant Samuel Roberts, Rikoon says he learned the right questions to ask about partner compensation and law firm practices.
Rikoon wouldn't comment on how his compensation at 300-attorney Loebwhich had average partner profits of $1.5 million in 2012, according to The American Lawyer's reportingwill compare to 615-attorney Debevoisewhere, according to The American Lawyer's reporting, average profits were $2.08 million in 2012but says he will receive a set amount in 2013 until he is able to be assessed by the same metrics as other Loeb partners. At that point, "We'll find out how many dollars it yields for me," says Rikoon, who earlier in his career worked as an associate and counsel at Paul, Weiss, Rifkind, Wharton & Garrison and briefly at now-defunct Mudge Rose Guthrie Alexander & Ferdon.
Debevoise presiding partner Michael Blair referred questions about the departures to a firm spokesman, who provided a statement wishing the lawyers well and saying, "Debevoise supports the group in this process and will be working closely with them to ensure a smooth transition for clients." ( The New York Times broke the news February 5 that Debevoise planned to cut the practice.)
As of April 15, Rikoon and his group will join a 45-lawyer trusts and estates team at Loeb that is spread across the firm's offices in Los Angeles, New York, and Washington, D.C., says Bruce Wexler, Loeb's New Yorkbased practice group leader. The other lawyers making the move include Liora Brener, a Debevoise associate who joins Loeb as senior counsel, and associates Rachel Demeny, Cheryl Testa Espinoza, Jillian Owens, and Louise Ding Yang. "Trusts and estates is a core practice of the firm," Wexler says. "It's an area we identified years ago as something we wanted to focus on, and it's just been a fabulous area for us."
Several other firms have gone in the opposite direction in recent years. Paul Hastings quietly exited private client work earlier this year when a three-lawyer tax team left for Bryan Cave in Irvine, California, and New York. Wilmer Cutler Pickering Hale and Dorr shed its wealth management practice in November when a four-partner team jumped to Choate, Hall & Stewart in Boston. Weil, Gotshal & Manges got out of the business in April 2011 when its entire seven-attorney trusts and estates group left for McDermott Will & Emery; and Wilson Sonsini Goodrich & Rosati oversaw the transition of a six-attorney group to Silicon Valley boutique Hopkins & Carley in 2010.
In 2006, Loeb once again benefited from the closure of a larger firm's practice when O'Melveny & Myers's two marquee trusts and estates partners, Stuart Tobisman and Leah Bishop, moved to the firm's Los Angeles office, shutting down O'Melveny's practice (Rikoon says one of the first things he did when interviewing with Loeb was swap notes with Tobisman and Bishop about their move).
Other firms continue to bulk up in private client work. On Monday, for instance, Cozen O'Connor announced the opening of an office in West Palm Beach, Florida, that will focus on trusts and estates work, among other areas, according to sibling publication The Legal Intelligencer. Sidley Austin hired Andrew Auchincloss as a private client partner in February from investment management company Bernstein, and Kaye Scholer added trusts and estates partner David Hirsberg in West Palm Beach, also in February.
Joshua Rubenstein, the head of Katten Muchin Rosenman's 50-lawyer trusts and estates group, says that even as firms have shuttered the practice since the 1980s, he's also seen a number of firms, including Loeb, target the area as a revenue source. "The problem is they're such relationship-oriented businesses, you can't slap them together," Rubenstein says. "You have to nurture them over a protracted period of time."