Let’s face it, when you hear “Cravath tax lawyer in the news,” you’re thinking James Colliton – the senior tax associate who was convicted and jailed for his role in a bizarre underage sex scandal.
That stigma may be part of the reason (OK, probably not) Lewis Steinberg chose Linklaters over his alma mater, Cravath, when he returns to practicing law in June. Steinberg left Cravath four years ago for an investment-banking job at UBS.
The reason for the return, after the jump.
Surprisingly, it’s about money.
Steinberg, 52, says his move is a sign of the times as bankers, worried about how government intervention and political pressure will affect their compensation, look to move into fields that could offer better and more stable compensation. One of those fields, Steinberg says, is the law.
“Four or five years ago I felt a bank was an environment [in which] I could provide skills in an efficient way for my clients, and, to be frank, be well compensated for it,” Steinberg says. “Now it’s no longer a friendly environment to do it. And I can actually give my clients better service [at a law firm]…I can be adequately compensated and perhaps better compensated.”
UBS isn’t eligible for TARP, which comes with its own host of restrictions, but the AIG bonus backlash and other factors have combined to convince Steinberg that law firms are the smart place to be right now. Linklaters had PPP of $2.1 million last year, so it might not be too much of a cut for the significantly lower volatility.
As for the stability… Cravath hasn’t had any layoffs (and made the Elite Eight of the ATL Safest-Firm bracket), and certainly isn’t expected to. Linklaters is another story, though. The firm has already laid off 350 people this year (200 lawyers, 300 staff) since January, most notably, 270 on January 29. Linklaters currently ranks #6 on our overall Top 10 list and #4 for lawyers laid off.
Steinberg was also the impetus behind Cravath’s hiring of Andrew Needham (Arizona BA ’82, Georgetown JD ’86, LLM ’90, Penn MBA ’92) from Willkie in March, 2005. At the time, it had been 62 years since the previous time Cravath brought in a true lateral partner (Roswell Magill, from Treasury, also a tax partner).
Related posts:
{ 4 comments… read them below or add one }
He sounds confident. But the way law firms are laying off people these days, I wouldn't be surprised if it all didn't turn out the way he expected it to.
He might be on to something. The equation used to be that the expected value of (massive_banking_dollars * low_percentage_of_keeping_job) > (reasonably_large_law_dollars * high_percentage_of_keeping_job). Now you've got TARP and other factors depressing the banking dollars and the likelihood of keeping the job goes down on both sides of the equation.
He sounds confident. But the way law firms are laying off people these days, I wouldn't be surprised if it all didn't turn out the way he expected it to.
He might be on to something. The equation used to be that the expected value of (massive_banking_dollars * low_percentage_of_keeping_job) > (reasonably_large_law_dollars * high_percentage_of_keeping_job). Now you've got TARP and other factors depressing the banking dollars and the likelihood of keeping the job goes down on both sides of the equation.