Magic circle firm suffers raft of walkouts as Kirsch heads to Gibson Dunn and doubts linger over litigation future

News that Clifford Chance's (CC's) former global litigation chief Mark Kirsch is to join the New York office of Gibson Dunn & Crutcher alongside fellow securities litigation partner Joel Cohen and counsel Christopher Joralemon capped a month of heavy partner losses from the magic circle law firm's New York office.

In addition to the trio departing for Gibson Dunn, CC's US litigation practice also lost securities litigation co-head Mark Holland to the New York office of Boston's Goodwin Procter, while fellow partner George Schieren also handed in his notice – making the firm's fourth partner loss in as many weeks.

Combined with the departure of a quartet of partners in May, CC is now left with just four partners in its New York litigation team – Jim Weidner, Robert Houck, Jeff Butler and Anthony Candido. One further partner among the four is also set to leave, although the firm would not be drawn on which.

The departures, not all of which are part of the firm's wide-ranging restructuring of the size and shape of its partnership, come as CC moves to refocus its US litigation practice. Under its new US litigation  chief Juan Morillo, CC is distancing itself from the securities litigation practice it gained through its merger with Rogers & Wells in 1999. Instead it is concentrating on regulatory, investigations and white-collar crime, antitrust, commercial disputes and international arbitration. The restructuring means the firm is also poised to lay off up to 29 associates from its New York office.

Morillo commented: "The firm's US litigation practice needed to change. It needed a new beginning and what the firm did was necessary to turn a new page. We have refocused the practice by more closely aligning our US practice to the global practice and emphasising the areas in which we have a competitive advantage.

"We are now focusing on those areas such as cross-border criminal, regulatory and litigation matters and domestic areas such as white-collar and antitrust in which we have a competitive advantage."

The Washington office, which still has around five litigation partners, will mainly advise on government and regulatory-related disputes, while New York will focus on commercial and cross-border disputes.

Some partners within the firm said that the securities litigation team was no longer profitable; however, this has been disputed by several ex-partners.

One told Legal Week: "Rogers & Wells' securities litigation practice was the jewel in the crown for CC at the time of the merger. It was the most profitable part of the practice, alongside antitrust."

At the time of the merger, the litigation practice at Rogers & Wells equated to roughly half of the firm's 400 lawyers. Headed by James Weidner it was the second largest litigation practice in New York – making CC's reduction down to just three partners all the more marked, particularly at a time when most are predicting an increase in litigation work.

Weidner is currently the only Rogers & Wells partner left in CC's New York litigation team, after almost a decade of high-profile departures.

Notable moves include the 2002 departure of antitrust litigation heavyweight Kevin Arquit to Simpson Thatcher & Bartlett in New York, a move which was followed by an exodus of four partners including antitrust partner Steve Newborn to Weil Gotshal & Manges in 2003.

The departures have left many in the market questioning the future of the practice. One ex-partner said: "The litigation practice at CC was too small and unstable. There was a loss of some very good quality people and clients. The market does not see the firm as a powerhouse."

Another added: "The litigation practice is falling apart at CC which is a travesty. The problem was that they had less to do in a busy market. And now the question is: does the firm even want a litigation practice? If you cannot match the team, you will not get the work and you cannot run a practice with just a handful of lawyers."

However, Morillo maintains that in its current guise the practice will compete successfully. He added: "The folks who now form litigation are united and our practice compares favourably to the contributions that others with the same practice area emphasis are making. We have critical mass where we need it."