How Paul, Weiss Didn't Become Cadwalader Wickersham & Taft

To avoid "extinction" - yes, Bloomberg Law actually uses that term with Cadwalader Wickersham & Taft - that oldest New York law firm is planning a merger with deep-pocketed Hogan Lovells.

That could also be the fate of other law firms which hadn't shifted their strategies as the sector changed. The scary part, as we know from the collapse of Dewey LeBoeuf, is that many mergers don't pan out as expected. 

The story of how another old New York law firm - Paul, Weiss - dodged that need-to-merge bullet, keeps increasing Profits Per Partner and can choose to remain independent began in 2008.

That's when, at age 48, lifer partner Brad Karp was voted in as chair. Essentially, like Cadwalader, Paul, Weiss had as its core competence serving the financial sector. It was known as a Wall Street litigation firm. Karp broadened that to adding on transactional practices and not only in finance. Overall, transactional is more lucrative than litigation. M&A is a major profit center in the legal sector. 

The addition of transactional, you could say, became the platform for Paul, Weiss' ability to build a large war chest. In 2021, Karp predicted in Bloomberg Law what happens to other law firms which don't have that kind of financial reserve: They could go out of business. 

See, growth, Karp maintained, was imperative for law-firm survival. For example, it takes money - big money - to recruit, retain and motivate the legal stars whose talent and track record bring in the business, enhance the brand and enable expansion. In the past several years Paul, Weiss orchestrated becoming a dominant presence in London by poaching stars such as Neel Sachdev. It is the old joke that large law firms operate like Hollywood used to. That is, having star names on the marquee.

If Paul, Weiss does merge it probably will be from a position of strength. What could drive that is to add on a new practice area and not do that organically. More efficient to just acquire a specialist firm in that category.

Thrown off your game, maybe the first time since you started working? You made all the right moves and then the world moved in another direction.

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