Winner, General Litigation Department of the Year: Debevoise & Plimpton
Debevoise routinely gets clients off the hook with regulators, but in one of the biggest cases to spill from the financial crisis, the firm got regulators off the hook.
It was a narrative that the judge called "worthy of an Oliver Stone movie." In 2008 the Federal Reserve Board seized control of American International Group Inc. as "the global financial system teetered on the brink of collapse." Then, "in an act of Napoleonic plunder, [it] stole AIG's assets, redistributing some to shore up other flagging [banks] while keeping much of the residue for itself."
Sinister as it may sound, this narrative was highly credible coming from superlawyer David Boies of Boies, Schiller & Flexner and his No. 1 client, former AIG chairman Maurice Greenberg. Greenberg's Starr International Company Inc. tapped Boies to sue the Federal Reserve Bank of New York on theories of constitutional and fiduciary law in 2011, demanding $25 billion in damages.
To counter Greenberg and Boies, the New York Fed relied on Debevoise & Plimpton litigation cochair John Kiernan, whose father served as a director of the bank over 30 years ago. Ultimately, Kiernan would win before both U.S. District Judge Paul Engelmayer—who called the lawyering "extraordinary"—and the U.S. Court of Appeals for the Second Circuit. In a unique court-like proceeding, Kiernan (alongside Davis Polk & Wardwell) also persuaded AIG's directors not to join a parallel suit in Washington, D.C., which is still pending.
In an eclectic ruling dismissing the New York case in late 2012, Judge Engelmayer imagined the Fed bankers delivering a series of Hamlet-like soliloquies in modified iambic pentameter: "'To act or not to act? Is it better to act decisively … and thereby end the grave threat to the economy posed by AIG's continuing CDS exposure?'" Or is it better, as the judge put it in another passage, "'to stand down … lest a jury in Delaware … someday sock us with an astronomical verdict?'"
New York Fed general counsel Thomas Baxter Jr. was especially gratified that the judge cited Theodore Roosevelt's 1910 speech, The Man in the Arena, a classic encomium of taking action in public life. "Policymakers in September 2008 faced a hard choice whether to rescue AIG or let it go bankrupt," says Baxter. Kiernan explained to the court that "they stepped 'in the arena' and made a tough call."
"In the arena" is not a bad catchphrase for Debevoise's litigation department, which overflows with government officials both former and future. Even after last year's departure of Mary Jo White and her lieutenant Andrew Ceresney to lead the U.S. Securities and Exchange Commission, the firm boasts two former attorneys general (Michael Mukasey in the United States and Lord Peter Goldsmith in the United Kingdom), eight former assistant U.S. attorneys, and alumni of a half-dozen other agencies.
It should come as no surprise that white-collar is Debevoise's strongest brand, with Bruce Yannett and Mary Beth Hogan as the standard-bearers. Beyond their own importance, government investigations often spill over into general litigation or feed the firm's other recognized strengths: in intellectual property (led by David Bernstein and Bruce Keller) and international arbitration (led by American Society of International Law president Donald Donovan and International Bar Association vice president David W. Rivkin).
Over the past two years Debevoise showed stellar results in all these areas, despite fielding only 43 litigation partners—or fewer than a quarter of its predecessor as the grand prizewinner, Gibson, Dunn & Crutcher. No rival of any size could match the magnitude of Debevoise's recent litigation results. Few could boast of litigating matters that touched on more than 90 nations over the period. The Debevoise map of the world covers just about everywhere outside littoral Africa and the Fertile Crescent.
In spotlighting Debevoise as one of the last remaining pure lockstep firms, The New York Times wrote that the firm's rhetoric evokes a "utopian socialist community." Nonpartners might beg to differ, yet Debevoise boasts a ratio of merely 3:1 between its highest- and lowest-paid partners. The same figure has been reported by The American Lawyer for New York's other endangered lockstep firms, but it's lower than any ratio (among the firms that disclosed this information to us in 2012), and it compares with an average of about 11:1 in 2012 for Am Law 100 firms that share this data. Hogan, who replaced White as cochair of the litigation department, relishes the time savings that come with a simple system of credit sharing. "What takes us 30 seconds takes other law firms three months," she says.
Apparently making good use of the time they save on infighting, the utopian socialists at Debevoise & Plimpton over two years produced two $25 billion results, a pair of trial defense wins worth $3.5 billion apiece, and the biggest investor-state award in arbitration history. (The firm is working on a range of new matters since our competition ended.)