On the Shoulders of Giants

25 On the shoulders of giants Incentivised by tax breaks, a rich pool of talent and cheaper real estate, US corporations continue to choose Chicago as their home, and as they arrive, so too do law firms Angela Bilbow [email protected] @bilbowCDR HOMEto the likes of McDonald’s, ConAgra, Boeing, Archer Daniels Midland and Kraft Heinz, as of summer 2017, the state of Illinois had the fourth most Fortune 500 corporate headquarters in the United States, many of which are based in down- town Chicago, the state’s business hub. International law firms Sidley Austin, Mayer Brown and Kirkland & Ellis were all founded in Chicago well over a century ago, with those firms still retaining business links to some of their original founding clients to this day. Reflecting on its rich legal history, Mark Filip, head of Kirkland’s government enforcement group, who also helps lead the litigation group, tells CDR: “Chicago is blessed to have a really long tradition in good law firms. In a lot of the histor- ical firms, the people there all benefit from being able to stand on the shoulders of people who built things over the course of their lives.” His firm, founded in 1909, still represents core clients who have been there from the begin- ning, for example, a “small company” that once was known as Standard Oil of Indiana – famous in US legal history – that later became BP, and Abbott Laboratories, which, as one of the biggest WWW.CDR-NEWS.COM 26 THE AMERICAS employers in the state of Illinois, is a real corner- property capabilities. stone of the economy. In February last year Clyde & Co opened its In more recent years, Chicago has attracted a Chicago office, with its New York managing number of other firms, Bartlit Beck Herman partner Mike Knoerzer commenting at the time: Palenchar & Scott in the 1990s, followed by “Many of our clients have significant operations in Perkins Coie in the early 2000s, while Steptoe Chicago and across the Midwest, so having a pres- & Johnson gained on-the-ground presence in the ence there is important for us as a national player.” city in 2007, as did Reed Smith that same year via And they continue to come. At the time of going a merger with Sachnoff & Weaver, among others. to print, sources pointed to White & Case eying Enter Quinn Emanuel Urquhart & Sullivan the city, while King & Spalding (K&S) opened in 2009, and a new and “relatively conflict-free” there in September last year, appointing high- offering. The firm’s Chicago managing partner profile former US attorneyZachary Fardon as its Jonathan Bunge joined in 2015 from Kirkland, managing partner, who quickly hired ex-govern- and was later followed by former colleague Daniel ment colleague and friend Patrick Collins, and Lombard. Collins’ colleague Jade Lambert from Perkins Up against firms who have enjoyed such long- Coie. standing relationships with the city’s corporations, The firm had had links with Chicago for some Bunge says: “There are a lot of great law firms in time, says Fardon, noting its “steady but not explo- Chicago and a lot of excellent lawyers. For Quinn, sive growth plan. Chicago is an obvious market we don’t try to be everything to everybody, litiga- where K&S, with its talent and its aspirations, tion, and trials in particular, are our niche and we needed to have a presence”. think we do it well.” However, it was a question of the right context With its disputes-only model, Chicago had as much as anything else. “There are two things seemed like somewhat of an open field to the firm. that conflated to create that context, one which “We have fewer conflicts than full service firms, with was personal – I started my career at the firm by and large. But that gives us some opportunities in the 1990s in DC and so I know the firm and it that the bigger firms might not have, for example, knows me.” we can be adverse [litigants] to banks,” Bunge Fardon had stayed in touch with many of the explains. firm’s leaders, who are also personal friends. And He speculates that client relationships are when his role in government abruptly ended last perhaps more fluid than they once were, in the year, when the Trump administration ordered the sense that they will often have longstanding rela- resignation of all 46 US attorneys appointed under tionships with established firms for certain matters the Obama administration, “my friends from and will consider another firm if they think it will K&S reached out to me”. do a good job on a particular case. “I was excited about the chance to re-join the One tool that has worked well for Quinn, not firm, to re-ramp my practice in a place I know and just in Chicago, but also in its global offering, is its trust, and to help the firm establish itself in this alternative fee arrangements. great market. There was a familiarity, an intimacy “We tend to be very flexible about alternative even, between me and the firm. It felt right and fee arrangements and are open to figuring out made sense,” says Fardon. some sort of arrangement that the client would As K&S continues to grow, in size and revenue like, sharing the risk. I think clients these days like but also in brand, its strengths in litigation and that because some of them at least are frustrated international arbitration, as well as areas like and tired of the hourly billing model.” healthcare and product liability, are all “sweet To some extent, Bunge believes it can be easier spots” for the firm and are “all areas where the for a lawyer from Chicago to get hired on a case in Chicago corporate market has great need”, Fardon Kansas or Indiana, than it might be for those in explains. New York or Los Angeles, so there can be regional home advantages to have a base there. Their kind of town Setting aside Chicago’s legal market, and admit- New king on the block ting he is biased, Fardon believes it to be one of The city has been a hotbed of lateral hiring the greatest cities in the world, but also one of the activity in the disputes space, which has ramped most complex, he adds, citing Illinois’ financial up in the past 12 months, with Jones Day, struggles in terms of governance, management Steptoe, Kirkland, Kennedys and Morgan and fiscal responsibility, in recent years; although Lewis & Bockius, representing just a few of the he admits “on the other hand, that has embold- many investing in the city, particularly in insur- ened it to create tax incentives for companies to ance, cybersecurity, white-collar and intellectual relocate here”, which is reflective of progress. SPRING 2018 CCommercialD DisputeR Resolution 27 “Chicago is one of the best places to practice law in the world. It has a long-standing tradition of excellence and a culture of collegiality and civility among lawyers” Zachary Fardon King & Spalding To Fardon, the city is a mixed bag, but on proliferation of opioids in the country. balance a very attractive place for both companies Led by (then) top lawyer Stephen Patton, and people. However, its legal market is consistent who returned to Kirkland last year, in 2014, in its virtues: the City of Chicago sued five pharmaceutical “I think the Bar in Chicago is second to none. majors – Purdue Pharma, Cephalon, Janssen Chicago is one of the best places to practice law Pharmaceuticals, Endo Health Solutions and in the world. It has a long-standing tradition of Actavis – for misrepresentations in the marketing excellence and a culture of collegiality and civility of highly addictive opioids. among lawyers.” This focus on pharma has garnered substantial Indeed, this rings true, Kirkland’s Filip says: recent attention at the US Department of Justice “Zach is a valuable addition to the community”, and elsewhere, with the US Federal Trade while pointing to other “super talented” lawyers Commission securing settlements over pay-for- and firms in the city. Fardon is equally as compli- delay tactics in the sector, including that with mentary of the “wonderfully talented” Filip. Cephalon in 2016 for USD 125 million, on which “As someone who has spent half of his career Kirkland took the reins in a settlement involving in government and half in private practice, I relish 48 US states. being opposite great lawyers in any context. The Chicago market is steep and deep and rich in 2018 outlook talent. You could go firm by firm and in every While Filip expects to see more firms arriving one of them there are lawyers I have a profound in Chicago, he names Paul Weiss, Sullivan & respect for,” Fardon says. Cromwell and Wachtell, Lipton, Rosen & Katz as those with a strong presence there, despite not Local work having their signs on a door in the city. In terms of market trends, Fardon does not note As new firms arrive, he does not believe a lot any stark change to date in terms of the nature and will change in terms of increased competition, at quality of litigation in Chicago. least not for enterprise-level disputes. With its long heritage of hosting big compa- “All sophisticated clients now look for the nies, and as more choose to relocate, disputes best person. They are pretty agnostic about over contracts, IP, among others, will naturally whether that person is sitting in one particular increase. city or another, in part because technology is so Fardon identifies increased litigation associated advanced, but also because people are understand- with cyber and data breaches, a specialty of his ably insistent that if they want to have a meeting colleague Lambert, as more companies become face to face, whether it’s in Chicago or Zürich, they victims of hacks and deal with the collateral conse- expect you to be there,” he asserts.

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