The Score: Kelley Drye Snags NFL Stars with Agent Hires
Earlier this month, Adisa Bakari left his role as president of the sports and entertainment practice at Dow Lohnes to join Kelley Drye & Warren.
Joining Bakari at Kelley Drye is Jeffery Whitney, the former vice president of Dow Lohnes’s sports group, which represents roughly 35 players in the National Football League, several coaches and media and entertainment personalities, and 60 professional boxers. All of those clients will now join Kelley Drye in Washington, D.C., where native son Bakari built Dow Lohnes’s sports group from the ground up.
Bakari, who played defensive back in college at Delaware State, realized early on that his gridiron career wouldn’t include playing in the NFL on Sundays.
While doing executive compensation work as a summer associate at Dow Lohnes in 1997, he wondered why professional athletes didn’t seek out the same level of representation as high-level business executives. Himself a man of humble beginnings, Bakari knew that most young men with designs of playing pro ball were unlikely to recognize their need for legal counsel.
He broached the subject of creating a sports and entertainment group at Dow Lohnes that would offer the same contract negotiation and employee benefits expertise to prospective pro athletes as other high net worth individuals. The firm agreed and Bakari inked his first client in former NFL receiver Zamir Cobb, who he says grew up watching Bakari play high school ball in northwest Washington, D.C.
A decade later, Bakari’s client list now includes NFL stars such as Antoine Bethea, Maurice Jones-Drew, and Matt Forte, as well as promising rookies like Le’Veon Bell. A zealous advocate for his clients in sometimes contentious contract negotiations, Bakari believes that the future of the sports agent business will be at large Am Law 200 firms.
"Many athletes today suffer from inadequate representation," Bakari says. "Athletic careers can be short, especially in the NFL, where retirement can come by the time a player reaches his early 30s. It’s important early on that they become well-rounded business people."
Bakari reels off statistics showing that 80 percent of NFL players find themselves broke three years after retirement. The NFL, which took in nearly $10 billion in revenue during its last fiscal year and has billion-dollar television broadcast contracts with a handful of networks, will spend roughly 50 percent of its earnings on player benefits under the terms of a collective bargaining agreement it signed with players in 2011. That deal came after a nearly five-month labor lockout, before which Bakari helped Bethea ink a new contract with the Indianapolis Colts.
The contracts of NFL players are not guaranteed, so Bakari knows his clients have to maximize their earnings potential. "We need more Magic Johnsons and Roger Staubachs," he says, citing two former star athletes whose business successes have in many ways surpassed their athletic achievements.
Bakari admits that he has a vested interest in his clients doing well long-term, rather than flaming out after a quick career in the NFL. Even after Bethea, Jones-Drew, and Forte hang up their spikes, Bakari plans on being their lawyer for any other business needs his clients might have.
Working at a large firm, rather than being out on his own like many sports agents, allows Bakari to offer his clients a wide array of legal services. One of the reasons Bakari believes many NFL players and those in other sports find themselves in financial straits is an over-reliance on traditional agents for "jack-of-all-trades" advice, which doesn't help them deal with complicated legal issues like the "jock taxes" that can affect earnings for those playing in certain states.
"If a player comes to me to help him on his first contract, and he’s also in the process of getting married, I can send him down the hall to our trusts and estates or tax lawyers," Bakari says. "Many of these guys go broke after a divorce—they don’t have prenuptial agreements."
While at Dow Lohnes, where Bakari made partner in 2010, the same year fellow lawyer-agent Whitney left his own solo practice to join the firm, the sports group held an annual retreat for clients to help teach them the business skills necessary to succeed off the field.
Sports Illustrated wrote about Dow Lohnes’s retreat last year, and over the past few years there has been an increased focus on the lives of current and former NFL players. In part, that’s been due to a high-profile suit against the league by hundreds of retired players, who claimed the NFL looked the other way by failing to inform them about the potential long-term consequences of concussions and other forms of head trauma.
Earlier this month, the NFL and its lawyers from Paul, Weiss, Rifkind, Wharton & Garrison reached a $765 million settlement in the consolidated concussion cases thanks to the mediation efforts of Irell & Manella litigation partner Layn Phillips. The settlement sum will reach nearly $1 billion when accounting for the roughly $200 million in fees for plaintiffs’ lawyers led by Seeger Weiss that the NFL has also agreed to pay. (The league, which discloses its own outside legal fees due to its status as a registered nonprofit, will also likely pay a tidy sum to Paul Weiss.)
None of Bakari’s clients were part of the concussion litigation. When asked about the settlement, which has been criticized in some player circles, Bakari credits DeMaurice Smith, a former partner at Latham & Watkins and Patton Boggs now serving as executive director of the NFL Players Association, with making player safety a "paramount issue" and putting a greater emphasis on boosting benefits. Smith has also put into place new rules regulating how agents can recruit potential clients.
The NFLPA examined the recruitment of New York Giants wide receiver Victor Cruz by the sports agency launched earlier this year by Shawn "Jay-Z" Carter and industry giant CAA—a union that upset many NFL agents—before clearing the rap mogul of wrongdoing in late May. (Kimberly Miale, a registered NFL player agent and former associate at Boston’s Heifetz Rose, has been hired by the joint venture called Roc Nation Sports.)
Other NFL agents doubling as financial planners for their clients have come under scrutiny in recent years due to potential conflicts of interest, while some agents have been given prison terms for defrauding their former clients.
Nonetheless, the sports agent business remains a highly competitive field—Bakari says the most common Jerry Maguire-esque misconception about agents is that they're all about the glitz and glamour of the red carpet—even though the profit margins in negotiating nonguaranteed NFL contracts remain low. The maximum fee an NFL agent can charge for negotiating a standard contract is 3 percent and for other types of contracts it can be a mere 2 percent. (As noted by former agent Andrew Brandt, who last year took a position at the Villanova University School of Law, those fees are payable over the lifetime of a players' contract with agents frequently undercutting one another to sign new clients.)
At a large firm, Bakari has the option of hourly billing, and he hopes that the platform provided by Kelley Drye will help him expand his practice into handling other matters for players not subject to any fee restrictions. He wants to hook up his NFL clients with Kelley Drye’s robust advertising and marketing practice, which can put them in touch with companies that pay top dollar for celebrity endorsements. (Commissions for marketing deals can range from 15 to 30 percent.)
Lewis Rose, a past chair of the advertising and marketing practice at Kelley Drye and current managing partner of the firm's office in Washington, D.C., said in a statement announcing Bakari and Whitney's hire that "their clients provide a natural synergy to services we offer throughout several of our practice areas."
With six offices throughout the U.S. and one overseas in Brussels, Kelley Drye also offers Bakari a wider geographic base to reach out to new clients, most of which he gets through word-of-mouth referrals or pitching them about his services in highly sought-after face-to-face meetings.
"If we can get in a room, I can show them we offer more than the competition," says Bakari, adding that Kelley Drye’s wide variety of practice areas can provide prospective clients one-stop shopping for all their business needs. "There’s a reason Jay-Z has his own lawyers or why CAA has Winston & Strawn on retainer."
Bakari also wants to branch out into other sports like the National Basketball Association and Major League Baseball, where fees for sports agents aren’t capped. He acknowledges that the arena of player representation in the NBA has long been dominated by Williams & Connolly, where former partner Lon Babby has gone on to serve as president of the league’s Phoenix Suns. (Current Williams & Connolly partner James Tanner Jr. represents NBA stars like Tim Duncan, Ray Allen, and Jeremy Lin.)
"There is big money to be made in pro sports," says Bakari, noting that times have changed with players being paid higher salaries and teams hiring outside counsel rather than handling all of their legal needs in-house. "I think you’ll see more and more large firms realize that this can be a profitable practice area."
The Am Law Daily has previously reported on the Am Law 200 lawyers like Bakari serving as registered NFL agents, as well as the efforts of other firms like Jackson Lewis to enter the sports business through the hire of former MLB agent Gregg Clifton and ex-National Hockey League Players’ Association executive director Paul Kelly to cohead its collegiate and pro sports industry group.
As for Dow Lohnes, the loss of Bakari and Whitney are the latest defections from the firm, which has been struggling since the loss of key client Cox Communications this summer, according to a story by sibling publication the Daily Report. Dow Lohnes has offices in Atlanta and Washington, D.C. The firm did not respond to requests for comment.