Editors' Blog

Cadwalader's very predictable succession problem

Posted 8/03/2007 by Deal Comment

So it was rumored, so it has come to pass.

The persistent gossip in restructuring circles was that Andrew Wilkinson would be quitting Cadwalader Wickersham & Taft as the Eurotunnel restructuring winds down for a major investment bank (see comment). And so, with Cadwalader’s workaholic restructuring star confirming today that he is moving to Goldman Sachs to co-head its restructuring department, he has.

It seems apparent that Wilkinson had entertained the possibility of a move to Goldman for some time, though the talks were until recently thought to have gone cold.

Cynics have also questioned whether Wilkinson’s move is related to pressure to justify his multimillion-dollar package at Cadwalader at a time when the slow insolvency market has given him less chance to exercise his famed work ethic. It has also been questioned how Wilkinson’s bond-holder credentials would fit in with the bulge bracket bank’s ambitions.

Yet with Goldman fresh from recruiting Lachlan Edwards from Rothschild, not to mention last year’s appointment of Kirkland & Ellis restructuring heavyweight James Sprayregen, the bank has some serious talent just as insolvency professions are predicting an upturn in work (though when aren’t they?).

For Cadwalader, the outlook is far less positive. As has been repeatedly pointed out for years, the US firm’s London arm is over-reliant on restructuring in general and Wilkinson’s bond-holder work in particular.

In addition, Cads’ critics argue convincingly that the firm has never managed to cultivate a culture in London that encouraged a team ethos or nurtured new talent. Perhaps that is one reason why, as some lawyers argue, that its arch rival, Bingham McCutchen, has made ground on the firm in recent years.

Where other US firms have usually adapted the brash, eat-what-you-kill style of Manhattan, Cadwalader largely imported the culture wholesale into London – it’s just that it got a UK lawyer to do it.

The City community has been asking for years what will happen to Cadwalader’s London arm post-Wilkinson. The firm has yet to come up with a satisfactory answer.

alex.novarese@legalweek.com