Thomas J. Reid (right), Managing Partner, and John A. Bick (left), head of Corporate Department at Davis Polk, share with Leaders League their insights on the market evolution as well as the firm's strategic action.
Leaders League. With revenue per lawyer of nearly two million dollars, your firm has few rivals in the high-end segment. How do you see this market?
Thomas J. Reid. There are three types of player on this segment: firms which try to seize every opportunity to secure a case and which practice in all disciplines; firms located only in New York, such as Cravath and Wachtell; and lastly New York firms which are able to accompany their clients throughout the world, whether in Asia or in Europe, with a very selective presence offering added value. We are doing our best to stay in this latter category.
Leaders League. Strategically, what recent action have you taken?
T. J. R. Over the past three to five years, we’ve increased our presence in China, thanks to our Hong Kong office, which now has eighty lawyers working on important transactions. We’re also very proud of our decision to open an office in Washington. We’ve recruited four key partners there over the past twenty months: Kimberley D. Harris, who previously worked at the White House as Deputy Assistant to the President and Deputy Counsel to the President, Susan C. Ervin, Howard A. Shelanski and John B. Reynolds III. Lastly, we’ve developed our potential in Europe with some high-level recruiting in Paris and London.
Leaders League. Do you feel your model is being put to the test by the financial crisis and the globalization of the law market?
T. J. R. The corporate law firms market has been saturated since 2008. In New York, we’ve seen several British firms working almost for free because of the need for references and the need to be working. The crisis has created an unstable, risky environment to which our fast-growing range of premium services is ideally suited. We’ve been involved in some strategic transactions in the financial sector, including Citigroup’s two-phase sale of Smith Barney to Morgan Stanley (for thirteen billion dollars).
Davis Polk has a hundred and sixty partners, almost all of whom began their career in the firm and have a well-established client base. Our strength lies in this heritage, together with our talented and dedicated lawyers.
Leaders League. How would you define Davis Polk’s values?
John A. Bick. We concentrate on quality, which shows all the time, case after case. We place emphasis on the importance of strong relationships: between one case and the next for a client, our lawyers must keep the client up to date with the latest trends. We encourage responsiveness and independent, personal advice. We defend our clients in a constructive way, without ever adopting a scorched-earth policy. A deal has to be approached with due consideration of the commercial issues at stake and must lead to enduring solutions.
T. J. R. The art of anticipation is part of the advisory culture that we encourage. Our experience of the financial industry and other spheres helps us to provide our clients with guidance. In the financial sector, for example, we’ve worked on ‘living wills’ (emergency crisis-resolution plans) for eleven banks under systemic risk, including Citigroup and Morgan Stanley.
Leaders League. How do you maintain your ability to anticipate?
T. J. R. When you’re working on sensitive cases, it’s vital to anticipate any potential repercussions. But we have the benefit of past experience: we’ve developed in accordance with the high-level requirements of our longstanding clients.
Leaders League. What projects are you working on on the management side?
J. A. B. The fact that we operate a lockstep system means we can align our partners’ interests. Information circulates because we have an essentially collegiate structure. There’s no room for conflict over fees. Management is kept to a strict minimum (with three partners on the management committee) and we have confidence in our teams. That’s a result of our culture, which is entirely client-focused.