Editors' Blog

Cravath peers out a little further beyond Manhattan

Posted 11/01/2008 by Richard Lloyd

New York’s Cravath Swaine & Moore has never been known for aggressive overseas expansion. Among its closest New York rivals, only Wachtell Lipton Rosen & Katz has been more conservative about venturing away from its Big Apple roots. So when Cravath announces that it is moving one of its most senior New York litigators, John Beerbower, to London, the shift is worth attention.

The first point of interest is Cravath’s steady build-up of its London office, which now numbers 15 lawyers. Although the firm shows little appetite to broaden its offering beyond US law, London’s rivalry with New York for the status of world financial capital has led Cravath to reassess its sole overseas outpost.

Until recently, Cravath was more than happy to station a couple of partners in London for a few years each, typically handling a range of M&A, finance and capital markets work. With about 15 attorneys, Cravath’s London office was relatively diminutive.

Now the firm has signaled that it’s prepared to increase those numbers and to keep partners in London for the long haul. Finance expert George Stephanakis, for instance, is expected to stay in London beyond the typical five-year stint. In addition to Beerbower, corporate partner David Mercado will transfer to London this summer, bringing the number of Cravath partners stationed in London to five.

For the last few years Mercado has spent much of his time handling Latin American deals, but with the flag of Spanish soccer team Real Madrid already hanging in his Manhattan office, he seems more than ready for his European move. Mercado’s move has also been touted for nudging Cravath’s London arm from its current securities focus towards a broader corporate/M&A team.

But while adding another corporate partner in the UK is not wholly unexpected, moving a senior litigator like Beerbower is more surprising.

“London is important, and we want to make sure that the firm is covered in the City — and by that we mean the whole firm,” Mercado says of Beerbower’s move.

For the first time, Cravath’s powerful litigation department will have a representative on the ground in London.

A partner at the firm for 27 years, Beerbower is a classic product of the Cravath system, boasting a broad level of experience in commercial litigation and arbitration. His work for European corporations such as German telecom giant Deutsche Telekom, oil major Royal Dutch Shell and aerospace company BAE Systems reflects the healthy share of international companies on Cravath’s client list.

The very fact that Beerbower will be an American litigator in London means that he’s joining a rather exclusive club. Among Cravath’s closest US competitors, Simpson Thacher & Bartlett is one of the few to have a US litigation partner on the ground in London. Paul Weiss Rifkind Wharton & Garrison typically has at least one of its senior New York courtroom operators visiting the UK at any one time but doesn’t have any permanently based there. Sullivan & Cromwell has the most established litigation presence of the lot, having had a partner on the ground for the last 20 years.

There is a clear logic in moving senior US litigation expertise to London. Thanks to Sarbanes-Oxley and an uptick in enforcement of the Foreign Corrupt Practices Act, European companies with a New York listing or business in America continue to fall under the demanding glare of US regulators and prosecutors. While litigation or a regulatory investigation involving a European company may take place in the US, the evidence and a majority of the witnesses are typically to be found overseas.

In addition, America’s class action plaintiffs’ Bar casts a growing shadow over the Europe, especially after Royal Dutch Shell’s $352m settlement last year with non-US shareholders over its restatement of oil reserves. Being on a client’s doorstep to advise on the American litigation threat makes more sense than parachuting in a partner from the US when a suit is filed.

Although Beerbower’s move may not signal a sudden stampede of US litigators across the Atlantic, prepare for a few of his compatriots to follow suit. US litigators may be reluctant travellers, but their view of the world now appears to extend a little beyond the shores of Manhattan.

rlloyd@alm.com