Laurence Cranch was sitting in the Sky Club on the 56th floor of the Metropolitan Life Building, his slate-gray eyes coolly and cleanly complementing his slate-gray glen plaid suit. For the past year, Mr. Cranch has been steering his firm, Rogers & Wells, into a once-secret, improbable merger with a London-based giant, Clifford Chance. Now, though, only one thing stands between Mr. Cranch and a pioneering role leading the first top-quality globo-firm (2,500 attorneys, stationed on every continent but Antarctica): a partnership vote on July 9 and 10. “I don’t think there’s any question it will be unanimous or close to unanimous,” he said evenly.
The marriage had, at one point, seemed unlikely. The two firms had eyed other firms, considered other ways to scramble to the top of international legal practice and reap the profits that would follow. “I think it is ideal. It works-that’s what makes it ideal,” he said with a smile.
Mr. Cranch said he continues to hear from people who don’t think it will happen. The New York Law Journal recently quoted leaders of a couple of British firms, who anonymously declared that this merger wasn’t the real launch of the trans-Atlantic legal megafirm. Why? Because Clifford Chance’s marriage partner is merely a Top 20 New York firm, not a Top 5.
Mr. Cranch thinks financial titans on both sides of the Atlantic-“the Merrill Lynches, the Goldman Sachses, the Morgan Stanleys”-will recognize Clifford Chance Rogers & Wells’ ability to negotiate cross-border deals. “The image we want to put in people’s minds is that it is a new firm, and it’s a combination of these two capabilities. And using the two names together, it’s not an English firm with a U.S. branch, it is a brand-new global firm,” Mr. Cranch said.
To be sure, the merger right now is only as real as the faith in it. “We don’t know them well,” one Rogers & Wells partner conceded. “But it’ll work out fine. They’re entrepreneurial about how they view the practice.”
Others say it will happen only because the leading partners will it to happen. “This is a firm where the partners without power are afraid of the partners with power,” a former Rogers & Wells partner said.
Indeed, most of Rogers & Wells’ partners only met their new bosses for the first time on Monday evening, June 14. At 5 P.M., the senior partner of Clifford Chance came to a Rogers & Wells conference room on the 53rd floor of the Met Life Building to deliver a pep talk. Get ready, New York, said banking lawyer Keith Clark. Clifford Chance Rogers & Wells is here! He and Mr. Cranch took turns steering a Powerpoint demonstration, which flashed a map of the firm’s 26 offices and outlined the supposed strengths and strategies of the new firm. Firm patriarch Bill Rogers, 86, watched along with everyone else.
“You say the name Clifford Chance and the reaction you get is a very, very strong global law firm,” Mr. Cranch said in presenting the new reality. One lawyer piped up and asked whether Tony Blair and Bill Clinton had blessed the union. Everyone went up to the Sky Club for cocktails afterward.
Rogers & Wells requires a simple majority for the merger to pass, with votes weighted by each lawyer’s principal in the firm. Clifford Chance insists on a 75 percent vote. If successful, the new firm won’t legally form until Jan. 1. The final prospectus, with the final compensation details, has not yet been given to Rogers & Wells lawyers. According to partners at Rogers & Wells, Clifford Chance’s 60 New York lawyers will move into the Rogers & Wells offices. The new firm will adopt the ways and nomenclature of Clifford Chance.
That includes pay, too. But only eventually. A two-year, four-month transitional period will begin in January, during which the two firms will divide the profit percentage-wise, according to each firm’s contribution. (Mr. Cranch said that Rogers & Wells’ profit per partner last year was $740,000.) During the transition, Rogers & Wells leaders will dole out pay to Rogers & Wells attorneys. But that’s over in 2002, when the modified lockstep compensation system Clifford Chance uses will prevail. (The ceiling will be stretched so that $2 million earners Kevin Arquit, Steven Newborn, Robert King and John Kidd don’t take major steps back.)
Mr. Cranch will not be firing anybody. “No one has been asked to leave because of the merger,” said one partner, “That’s not to say no one will be asked to leave, but it’s not due to the merger.” Already defecting: litigator Richard Cirillo, who went to the New York office of Atlanta’s King & Spalding, and John Keitt, who is heading to Dewey Ballantine. Both gave notice on June 11.
Now the two firms are trying to steer client work to each other, and are expecting to make joint client presentations in the fall. “Following the partnership vote, we will try to run the two firms as one,” Mr. Cranch said. That means you might want to look for Rogers & Wells’ litigators in the department the Brits currently call “contentious business.”
The romance began in San Francisco in March 1998. Mr. Cranch and Clifford Chance partner Stephen Hood met while making presentations at a law firm management seminar. They went out to a restaurant afterwards and each firm leader marveled at the other’s performance. “We agreed maybe there’s something here to talk about. Both of us knew what that meant,” Mr. Cranch said of the walk back to the hotel. Talks picked up late last fall, and negotiating sessions were held in Boca Raton, Fla., and Wimbledon, among other places.
Now the two firms are trying to distill their commitment into a contract. The final prospectus is expected to be ready the last week in June. Helping to write it are the negotiating team: mergers-and-acquisitions head John Healy, executive director Dick Killian, Mr. Cranch, and litigator John Carroll. Also steering are Mr. King, the corporate head (former partners said he’s been groomed as future head of the firm); tax partner David Moldenhauer; and international corporate partner Dick McDermott, “the sort of guy you could leave alone in a room with your money on the table,” according to one former partner.
Clifford Chance is getting a good leader in Mr. Cranch, said one former partner. “He’s done a tremendous job of picking that firm off its ass.”
Now he’ll have to make sure everyone is ready for the move into the future. “At one point, an associate asked me, ‘Is this going to be better for Clifford Chance or for us?'” recalled a Rogers & Wells partner. “I said, ‘How can it be one or the other? We’ll be part of Clifford Chance. We’re going to build one very strong institution; the combined firm will have a major head start over every other firm in the world, and your job is to maintain that head start. And increase it.'”
At first, there will be more enthusiasm than business. “There’s not one person who doesn’t want to be in Paris or London for six months,” said a partner. Will they feel the same way about Dubai or Ho Chi Minh City?
Standing in the doorway to the firm on the 52nd floor, where the sign will soon have a Clifford Chance pasted before the Rogers & Wells, Mr. Cranch paused to reflect on how the process has evolved. Initially, he acknowledged, some partners didn’t appreciate the world-domination potential here. “Some partners were focused on the strengths of the domestic practices,” he recalled.
“There were a lot of … conversations,” he added. He put his hands in his slate-gray pockets, and rocked forward, as if he could not contain his enthusiasm. “It’s a good idea. It’s what intrinsically made sense for the firm. And it has the power of what’s true,” he said.
Then he smiled. The tippy-top of the Chrysler Building loomed through the window off to his right. On to the rest of the world.
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