The Gold Standard
Debevoise & Plimpton is number one on The A-List—again. Here’s how the firm keeps rising to the top. By Adrian Brune
MARTIN FREDERIC EVANS (everyone calls him “Rick”) has one of those sigh-provoking Manhattan views that makes you wonder how he gets any work done. From his forty-third-floor midtown perch, the Debevoise & Plimpton presiding partner can, as he puts it, “see the storms rolling in.”
Right now, however, the skies are crystal-clear for Evans and Debevoise. For the second consecutive year, the firm is number one on The American Lawyer’s A-list, our ranking of the nation’s best law firms. If its scores are any indication, Debevoise has hit upon the rarest of formulas: it makes money—a lot of it—while honoring its pro bono commitment, treating younger lawyers like human beings, and working, albeit with somewhat less success, at making sure its workforce is diverse.
We rank firms for The A-List according to their performance in those four categories: revenue per lawyer, pro bono, associate satisfaction, and diversity. You don’t have to be perfect to make it to the top. Among the 20 a-list firms, Debevoise ranked number seven in revenue per lawyer; number three in pro bono; number four in associate satisfaction; and number 12 in diversity. But you do have to be consistent. The firm had high enough scores across the board to carve out a 40- point lead over the number two firm on the list, New York’s Patterson Belknap Webb & Tyler.
So how does Debevoise keep doing it? Is there something so different in its DNA? On the surface, at least, the answer would seem to be no. The firm is a lot like other elite New York players. It has the requisite band of tough corporate specialists and litigators. Its highest-profile cases won’t win it any warm-and-fuzzy awards. And not everything’s perfect in the partnership: earlier this year, for instance, Ralph Ferrara, who opened Debevoise’s Washington, D.C., office
and was a top gun in the securities bar there, took his $30 million book of business to LeBoeuf, Lamb, Greene & Macrae.
Yet current and former partners and associates say the firm has a key advantage: a culture that emphasizes collegiality, allows partners to experiment with new clients and business opportunities, and honors public service. In interview after interview, Debevoise lawyers use words like “integrity,” “intellect,” and, by far their favorite, the aforementioned “collegiality” to describe the firm. Even Ferrara, whose well-publicized jump to LeBoeuf battered the 20-lawyer D.C. office, describes Debevoise as “a spectacular firm, with spectacular people.”
What Ferrara didn’t mention—and what was reportedly an issue in his decision to jump ship—is the firm’s continuing use of a lockstep pay structure for partners. A top-earning veteran like Ferrara, who, according to our sibling publication Legal Times in Washington, pulled down $2 million a year, could see his salary double at a competing firm (and presumably did when he exited).
Even so, some of the firm’s biggest revenue-generators are the most vocal proponents of the lockstep system and say it is an absolute must in keeping the firm’s culture intact. The fact that the high end of the lockstep scale guarantees a $2 million–plus payday is probably one reason. Another, says Jeffrey Rosen, co-chair of the firm’s mergers and acquisitions group, is that lockstep keeps the firm “pleasant and efficient . . . a lot of firms have become much less of a partnership and become more of a mini–financial institution. We’re sort of anti-rainmaker here.”
ANTI-RAINMAKER, MAYBE, but not anti-money. The cornerstone of Debevoise’s A-List ranking is its financial results. In the last five years, despite a recession and rocky economic recovery, Debevoise has increased revenues 78 percent, from $269 million to $478.5 million, with revenue per lawyer climbing from $670,000 to $890,000. Profits per partner have followed suit, rising from $1.2 million to $1.5 million during the same period—not quite the $2 million of a few of the firm’s elite competitors (here, Debevoise lawyers might whisper “Cravath, Swaine & Moore”), but a top-of-the-profession return nonetheless.
Debevoise counts, in part, on a base of traditional corporate work for institutional clients, some of which have been with the firm for decades. Phelps Dodge corporation, the copper mining conglomerate, signed on with Debevoise 70 years ago; John Hancock Financial Services, inc., has been a client for 60 years; American Airlines, now a subsidiary of AMR corporation, for 50.
Yet the firm touts—and with some merit—its expanding M&A practice. A team of 32 partners and 100 associates work on approximately 100 deals per year, and in the past two years, Debevoise “has started swinging for the fences” in the terms of the breadth and scope of its corporate work, says Michael Blair, chair of corporate practice. Rosen represented General Electric Company’s NBC in its $14 billion acquisition of Vivendi Universal entertainment in 2004 [“Americans in Paris,” April 2004]. The firm also worked on the $2.4 billion sale of Kinko’s, inc., to FedEx corporation and financial services giant AXA Financial, Inc.’s $1.5 billion cash acquisition of The Mony Group Inc., a New York insurance and financial services company. Debevoise is currently advising Verizon communications inc. in its $8.5 billion acquisition of MCI, inc., and guiding the Dolan family, which wants to take private a portion of communications provider Cablevision Systems Corporation. “Corporate’s revenue growth in the four years 2000–2004 was 42 percent. The dollar amount of revenue growth in those four years actually modestly exceeded the dollar growth in department revenues during the booming 1996– 2000 period,” Blair says.
Litigation is also boosting revenues, bringing in $200 million last year from clients such as Merck & Co., Inc., the maker of Vioxx, which tapped Debevoise to head an internal investigation into charges that the drug contributed to heart disease and several deaths. The firm also has represented Global crossing limited in Securities and Exchange Commission and other matters relating to its 2002 meltdown, and was at Rosie O’Donnell’s side when the comedienne and talk show host was sued by magazine publisher Gruner + Jahr for walking away from her self-titled magazine in September 2002. (The case ended in a draw a year later.)
O’Donnell, in an e-mail exchange, says she came to the firm needing “the toughest, smartest female lawyer in NYC” to defend her: “one name—Mary Jo White—came up; I called for an appointment.”
White’s name comes up a lot, actually. The former U.S. attorney for the Southern District of New York has helped the firm jump into a series of what partner Mark Goodman, a former federal prosecutor who served under White, calls “big-mess cases.” Says partner Lorna Schofield, also a former assistant U.S. attorney from the Southern District, “It’s the perfect storm. It’s a very trying time for corporations; that work is going to continue for a while.” White came aboard in 2002 following her eight-year star turn as U.S. attorney. As she stepped down, she was on the must- have list for firms hoping to build their white-collar practices. Debevoise had an advantage: The 57-year-old had been a partner at the firm before she became a prosecutor. After a quiet courtship (“They’re all smart enough to know . . . that a heavy rush is not the way to recruit me,” White says), she returned to the firm.
“[Debevoise] does have—and it’s not a negative on any other firm— what I think is a unique, heightened consciousness of the ethics of the practice of law,” says White. “Particularly in this day and age, conflicts of interest are everywhere. Here it’s ‘Should I make this argument?’ not ‘can I make this argument under the law?’ but ‘Should I make this argument; should I give this advice?’ you focus in on what you ought to be doing, not what you ought not to be doing. So, my tax partner on the thirty-second floor—I don’t have to worry if he has the same zeitgeist. It’s the zeitgeist of the firm.”
DEBEVOISE LAWYERS ALSO APPEAR TO BE on the same page about their commitment to pro bono work. Last year Debevoise lawyers performed 51,000 pro bono hours, and 278—65 percent—of the firm’s 430 U.S.– based lawyers did more than 20 hours of pro bono work per year. Debevoise also pitched in another $1 million in travel expenses and fees for experts and court reporters.
The point man for the firm’s pro bono effort is partner Christopher Tahbaz, a 40-year-old litigator who came to the firm as an associate from Donovan Leisure Newton & Irvine in 1994. He co- chairs the firm’s pro bono committee and says he spends about 200 hours a year administering pro bono issues for the firm. (In June, Debevoise hired a full-time manager of pro bono administration to help oversee a variety of pro bono administrative tasks, as well as some longer- term planning.) “As a firm, we believe that pro bono work is an essential part of a fully realized and satisfying law practice,” Tahbaz says. “We strongly encourage all of our lawyers to become involved in their own pro bono projects, and we support such efforts with the full resources of the firm. I think this commitment explains our success.”
Tahbaz himself has been at the center of one of the firm’s longest-running pro bono cases. Back in 1997, while he was still a senior associate, he took up a case with the Urban Justice center, a New York nonprofit that provides legal assistance to the poor and homeless. The center hoped to stop the city’s practice of putting mentally ill jail inmates on the streets without follow-up care,
and Tahbaz, who serves as a board member at the center, agreed to help. “I saw a terrific opportunity to make a real contribution, through my legal work, to the life of the city in which I lived and practiced,” says Tahbaz. For two years, Tahbaz investigated the facts, and in 1999, with Debevoise’s blessing, filed Brad H. v. City of New York—a class action against New York’s penal system that charged negligence on the part of the city. New York settled the case in 2003, agreeing to provide services to inmates before and after their release. “Our class members are no longer released during the middle of the night with $1.50 and two subway tokens,” Tahbaz says. “The best moment of my pro bono career was signing that settlement.” The work isn’t over, however. The city now pays for two independent, court-appointed monitors to oversee implementation of the settlement. They, in turn, are being watched by Debevoise lawyers.
HERE’S ANOTHER UPSIDE TO the pro-bono efforts: it’s good for recruiting and training talent. Take Catherine Amirfar, a fifth-year litigation associate. When she considered firms after New York University School of Law, she settled on Debevoise. The firm’s pro bono commitment “was one of the things that clinched the deal,” Amirfar says.
Associates at Debevoise, in our midlevel satisfaction survey, gave the firm nearly perfect scores for its pro bono work. In fact, associates awarded good grades across the board: They backed up management’s assertion the firm was a collegial place to work, giving high marks for associate and partner relations. They also lauded the firm for its training and guidance and benefits and compensation. Associates at Debevoise don’t necessarily have it easy. Any firm with million- dollar partner profits and double-digit spikes in revenue can safely avoid the label “lifestyle firm.” (According to last year’s survey of midlevels, associates at the firm bill roughly 2,200 hours per year.) Yet, Debevoise managers seem to reject the idea that an associate’s worth is measured solely in quantity of billable hours. They stress that they want the lawyers at the firm to have a life. The firm has no minimum billable hours requirement for associates, though managers clearly expect that work will get done. “Some months I’m working 80-hour weeks, others 50 or so,” Amirfar says. “I have friends whose lives out- side of work are diminished to nothing; I have a life outside of the firm.”
Partners appear to take a hands-on approach to man- aging junior lawyers: associates are each assigned a partner-adviser who monitors their progress. If they fall behind, the firm tries hard to work with them to reinvigorate their work, says partner Michael Gillespie, who serves on the firm’s recruiting committee. When it’s clear that an associate isn’t going to make it, “we will provide that associate with outplacement resources designed to enable a smooth transition to other career paths,” he says. There’s also something of a “no jerks” policy at the firm. Partners are expected to treat associates with respect, Gillespie says: “We simply don’t tolerate bad behavior at any levels of the organization.”
AS THE FIRM’S A-LIST SCORES ATTEST Debevoise isn’t perfect. Though it has a respectable diversity score—especially compared to its New York counterparts—Debevoise is still a largely white bastion. Just 15.2 percent of the firm’s U.S. lawyers and 3.4 percent of its partners are minorities. That breaks down to 27 African Americans (two of them partners); 34 Asian Americans, including one partner; and 13 Hispanic Americans, one of whom is a partner. Even so, that’s high enough to rank in the top 40 of our sibling publication Minority Law Journal’s annual diversity Scorecard, which ranks 260 law firms for diversity. (The most diverse firm in the survey, Miami’s Steel Hector & Davis, had a nearly 36 percent minority head count; Simpson Thacher & Bartlett had the highest minority percentage among New York–based firms: 23.9 percent.)
James Johnson, one of the firm’s two African American partners and a member of its diversity
committee, insists that a diverse workforce is one of the partnership’s primary goals. Debevoise, he says, recruits ethnic minorities at about 30 law schools around the country and that 22.2 percent of the associates hired in the New York office over the last five years were minorities. Johnson acknowledges that “all of us (New York firms) could do better. It may sound trite, but it’s often said that as our clients become more diverse and the world gets smaller, we need to be more diverse.” He cited a recent internal investigation conducted outside the United States in which a team of attorneys were interviewing Arab witnesses. “One of the lawyers not only spoke the particular Arabic dialect, but was also a practicing Muslim and was able to inform our approaches to the witnesses,” Johnson says.
IF THIS ALL SOUNDS VERY EARNEST AND YES, even nice, that’s the point. Debevoise lawyers say the firm has, from its beginnings, worked to foster a reputation as a law firm with a soul. Kenneth Nolan, an aviation attorney and managing partner of the New York office of Speiser Krause, heads the plain- tiffs committee for the families of 9/11 victims in a case against American airlines. Debevoise represents the airline. “They’re tenacious,” he says. “They leave no stone unturned—but they’re decent individuals.”
The firm was founded in 1931 by Eli Whitney Debevoise, a descendant of cotton gin inventor Eli Whitney and then a junior associate at Davis Polk & Wardwell. He was joined by another Davis Polk lawyer, William Stevenson, who was better known for his gold-winning leg on the 1,600- meter relay during the 1924 Olympics. A few years later, Francis Plimpton, father of the writer George Plimpton, came aboard.
The team had strong patrician leanings: Debevoise’s father was a top Wall Street lawyer and longtime counsel to Standard oil baron John Rockefeller, Jr., and the erudite Plimpton, who later served as a deputy representative to the United Nations under Presidents John Kennedy and Lyndon Johnson, was, according to a colleague quoted in a 1971 New Yorker profile, “the only person who can write an indenture in iambic pentameter.”
Despite their elite backgrounds, they worked to promote a strong commitment to pro bono and public service, and fiercely protected the firm’s culture. Lawyers grew up at the firm and were promoted to partner. Lateral hires were frowned upon (and still are; the firm has brought in just eight outside partners in the last decade). And the firm would hang onto lockstep compensation even as their competitors shifted toward merit-based pay systems.
Debevoise, who died in 1990, served as presiding partner into the 1970s and remains a strong influence on the firm. Partners cite him when they talk about the firm’s culture and pro bono work, and Evans tries to keep up some of his predecessor’s traditions. Every year, at the annual firm dinner, he says a few words about the firm’s best moments, something Debevoise did every year. Predictably, the speech is a mix of how well the firm did with business and pro bono clients. This year Evans described walking into the firm’s conference center, where lawyers were working on restructuring the finances for Delta Air Lines Inc.’s aircraft fleet: “I saw rooms of documents and lawyers, the lawyers diverse by any measure and working across specialties to deliver unrivaled service on a project of great commercial importance.” The second event took place on Election Day. “I went to see a conference room full of computer screens and telephones, as Debevoise lawyers played a leading role in the nationwide voter information and protection effort.”
Evans is in his forty-third-floor office as he relates the story. Both events, he says, “showed the firm at its best.” Three-quarters of a mile into the sky, the firm sits atop the profession, with nary a storm cloud on the vast and splendid horizon.
As appeared in the September 2005 edition of The American Lawyer.