Kirkland's Cravath hires continue as US dealmaker exits 'once-untouchable' M&A practice
Cravath M&A heavyweight becomes third notable partner to leave the firm in recent years for Kirkland
January 23, 2018 at 02:43 PM
5 minute read
The original version of this story was published on Law.com International
Kirkland & Ellis has hired yet another partner from Cravath Swaine & Moore's once-untouchable M&A practice, with dealmaker Eric Schiele the firm's latest star lateral recruit.
Schiele, whose hire Kirkland announced on Tuesday (23 January), advised on several major deals while at Cravath, a firm where he spent almost 18 years, having made partner in 2008.
Kirkland has now recruited three Cravath partners since 2012, helping the Chicago-founded Am Law 100 firm stand toe-to-toe with the upper echelon of New York's Wall Street elite.
Sarkis Jebejian was the first to jump to Kirkland in 2012. In late 2016, Jonathan Davis headed to Kirkland, citing his work across the table from the firm in representing Molson Coors on a sidecar sale related to the late 2015 mega-merger between beer industry giants Anheuser-Busch InBev and SABMiller (That transaction generated at least $261m in legal fees.)
Schiele, who also worked across the table from Kirkland on AB InBev-SABMiller-Molson Coors transactions, said that his relationship with Jebejian and Davis was only one factor that drew him to the firm.
"There was a little bit of familiarity to it, but what attracted me is that it's a really great mix that Kirkland has," Schiele said. "There is all the reach and resources you would expect with a big global platform and excellent brand, but at the same time it's a very entrepreneurial place and it has an energy that you would expect from a smaller firm."
Some of the major deals Schiele worked on while at Cravath include advising Walt Disney on its pending $66bn purchase of Twenty-First Century Fox, Time Warner on its proposed $85.4bn cash-and-stock sale to AT&T, and AB InBev's acquisition of SABMiller.
Schiele said it was a difficult decision to leave Cravath, which he said was an "excellent" firm.
Months before Davis left Cravath, the lockstep stalwart suffered perhaps the biggest blow yet to its M&A practice: the departure of Scott Barshay to Paul Weiss Rifkind Wharton & Garrison. Barshay has since led deals for a number of clients he worked with at Cravath, including Qualcomm and Kraft Heinz.
Jebejian and Davis have been busy as well, teaming up this week to represent Spectrum Brands Holdings on the $2bn sale of its consumer battery business to Energizer Holdings. Davis has also worked as the lead on multibillion-dollar deals alongside partner Daniel Wolf, who joined Kirkland from Skadden Arps Meagher Slate & Flom in a high-profile lateral move from 2009 that helped launch Kirkland's M&A ascent.
Kirkland has financial incentives to offer partners as compared with Cravath's lockstep compensation system, which rewards seniority and keeps senior partners from making much more than three times the salary of a junior partner. While the firm's profits per equity partner are very similar ($4.195m for Cravath in 2016, compared with $4.1m at Kirkland), Kirkland's partners have a much wider pay spread, with some earning more than eight times their junior partners.
Schiele said he met with a number of Kirkland's leading partners, including firm chairman Jeffrey Hammes, corporate lawyers Jon Ballis and David Fox and bankruptcy bigwig James Sprayregen. He also met individually with Kirkland's M&A partners in New York.
"It's very clear how excited they are about building the place, and the resources they're given in order to do that," Schiele said. "It's a group that has an entrepreneurial hunger about it that is really evident when you start having conversations with them."
That M&A team last year placed sixth in Bloomberg's year-end rankings of law firms advising on the most deals by value, up from sixteenth in 2016. Kirkland advised on 465 deals last year worth more than $305bn, according to Bloomberg. Cravath ranked tenth last year.
"Eric is an outstanding M&A lawyer and one of the most respected transactional attorneys in the country," said a statement from Kirkland's Hammes, who assumed leadership of the firm in 2010. "He will be an invaluable addition to our top-tier M&A and private equity practice in New York."
A spokeswoman at Cravath, which named a new leader of its own two years ago in M&A partner Faiza Saeed, wished Schiele well in his future endeavours.
Schiele's departure comes the same month that Susan Webster, a former head of Cravath's general corporate practice, retired from the firm and took a role as general counsel in New York for the Fremont Group, a private investment firm controlled by the Bechtel family.
As for Kirkland, the firm has been busy the past few weeks on the lateral hiring front, bringing back former partner and ex-Jenner & Block intellectual property transactions chairman Adam Petravicius in Chicago, adding former Choate Hall & Stewart private equity co-chairman Christian Atwood for its new office in Boston and bringing on a high-profile investment management and funds group from Debevoise & Plimpton in New York.
In London, the firm also recently sealed the hire of Freshfields Bruckhaus Deringer private equity heavyweight David Higgins on a deal understood to be worth $10m (£7.5m) a year.
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