President Trump’s government order attacking Paul Weiss and severely limiting that legislation agency’s capacity to symbolize its shoppers was broadly seen by attorneys as a harmful affront to the nation’s authorized system.
To rivals of Paul Weiss, it was a chance.
Inside days of Mr. Trump’s March 14 order, a few of the largest rivals have been calling high attorneys on the beleaguered legislation agency — one of many nation’s most prestigious — asking in the event that they needed to leap ship together with their profitable shoppers.
A number of corporations, together with Sullivan & Cromwell and Kirkland & Ellis, have been seeking to exploit the second, in line with 5 attorneys with direct data of the poaching. All of the attorneys interviewed for this text spoke on the situation of anonymity so as to speak about discussions that have been supposed to stay non-public.
The rivals took a gentle strategy with Paul Weiss’s rainmakers, saying that they sympathized with the attorneys’ plight however that in the event that they needed out of the turmoil they might title their worth. Attorneys at one other main legislation agency, Wachtell, Lipton, Rosen & Katz, additionally mulled whether or not to attempt to lure companions away from Paul Weiss, 4 of the folks stated.
The outreach from different corporations heightened the panic that had been roiling Paul Weiss after Mr. Trump issued the manager order, which restricted the agency’s attorneys from coping with the federal government, together with coming into federal buildings. The order additionally stated firms doing enterprise with Paul Weiss, which has deep ties to the Democratic Get together and its causes, may lose their authorities contracts.
One other legislation agency, Perkins Coie, acquired an identical order, however determined to problem it in court docket. At first, Paul Weiss hoped to create a unified entrance with different huge legislation corporations to problem the order issued in opposition to it, too. However the specter of dropping its high attorneys compounded worries that shoppers would flee.
Some companions have been notably apprehensive that Scott Barshay, the top of the company follow, would possibly depart and that different attorneys would observe him, in line with 4 of the folks briefed on the agency’s deliberations. Even when the agency efficiently fought the order in court docket, it might be labeled an enemy of Mr. Trump and battle to achieve authorities approval for offers.
So Paul Weiss shortly reduce a take care of Mr. Trump that requires the agency to do $40 million in professional bono work for causes supported by the White Home.
“We waited for corporations to help us within the wake of the president’s government order,” Paul Weiss’s chairman, Brad Karp, wrote in an e mail to the agency on Sunday. “Disappointingly, removed from help, we realized that sure different corporations have been in search of to use our vulnerabilities by aggressively soliciting our shoppers and recruiting our attorneys.”
Jon Ballis, chairman of Kirkland & Ellis, stated in a press release that his agency had not tried to recruit Paul Weiss attorneys. A Sullivan & Cromwell spokesman equally denied attempting to recruit the agency’s attorneys. A consultant for Wachtell Lipton stated the agency had by no means approached any Paul Weiss attorneys.
Mr. Trump’s government order uncovered a vulnerability at Paul Weiss. Formally referred to as Paul, Weiss, Rifkind, Wharton & Garrison, the agency is thought for its pugnacious litigators, who seem in court docket. However the litigation attorneys lately have taken a again seat to company deal makers. The agency now depends more and more on maintaining these extremely paid company attorneys completely happy and bringing in enterprise.
Giant legislation corporations are locked in an escalating battle for authorized expertise. Massive corporations are often poaching high attorneys to bolster their practices and herald shoppers who can generate extra charges. High performers at huge corporations can take residence greater than $20 million a 12 months. At Paul Weiss, which operates all over the world and employs greater than 2,000 folks, the company follow is now the principle income. The agency took in about $2.6 billion in complete income in 2024, up from about $2 billion the 12 months earlier than, according to Law.com.
This 12 months has gotten off to a gradual begin for a lot of huge legislation corporations as uncertainty round tariffs and federal job cuts has chilled company merger exercise, sometimes a giant moneymaker.
Shedding high attorneys when offers are scarce can be notably onerous. When attorneys depart one agency for one more, they often take their shoppers with them, and meaning much less price income.
During the last a number of years, Paul Weiss has completed its personal share of poaching, luring company attorneys away from rivals with large pay packages.
One of many largest hires was Mr. Barshay, a rainmaker at Cravath, Swaine & Moore who went to Paul Weiss in 2016 and is now chair of its company division, which advises firms on mergers and different transactions. Mr. Barshay’s shoppers embody IBM, Qualcomm, Basic Electrical and Chevron.
Whereas high attorneys, together with Mr. Barshay, assured Mr. Karp and others that they’d no plans to depart, the management nonetheless apprehensive that there may very well be an exodus, three of the folks briefed on the conversations stated.
As Paul Weiss debated how to reply to the manager order, Mr. Karp often assembled a small group of its high brass, together with Mr. Barshay; Paul Basta, co-chair of the restructuring division; Matthew Abbott, world co-chair of the mergers and acquisitions group; and Angelo Bonvino, world co-head of that group.
Throughout the agency, there was a mixture of opinions about methods to reply, 4 folks inside Paul Weiss stated. Some companions needed to struggle Mr. Trump’s government order in court docket. Some associates, attorneys sometimes in the beginning of their careers, additionally needed to withstand.
However among the many management, there was deep concern about how lots of the agency’s attorneys would have the ability to maintain doing their jobs. Federal companies typically should log out on company mergers and inventory choices.
Even when a decide stayed the manager order, Paul Weiss can be tarred as being on Mr. Trump’s unhealthy aspect. Shoppers, these senior companions argued, would finally look to rent a legislation agency with a extra favorable standing in Washington.
Mr. Barshay was amongst those that supported making a take care of Mr. Trump, and in the end the attorneys heading the agency’s different enterprise traces have been supportive of a decision, three folks briefed on the decision-making stated.
However some attorneys, led by Kannon Shanmugam, a high litigator on the agency, had ready a authorized problem in case Paul Weiss couldn’t make a deal, the folks stated.
Mr. Karp boarded a non-public jet on March 18 for his assembly on the White Home early the following day. He went to the Oval Workplace alone. Mr. Trump was accompanied by his chief of employees, Susie Wiles; his adviser Steve Witkoff; and his private authorized adviser, Boris Epshteyn.
And there was yet another individual Mr. Trump instructed the group he needed to dial in to the assembly — Robert Giuffra, co-chair of Sullivan & Cromwell, in line with two individuals who have been acquainted with what befell.
Mr. Giuffra, who has recognized Mr. Trump for a few years, not too long ago agreed to deal with Mr. Trump’s attraction of his conviction on expenses that he coated up a hush-money take care of the porn star Stormy Daniels in a New York State court docket.
Initially the dialog among the many president and the 2 authorized rivals targeted on golf, the folks stated. Then the dialogue turned to Mr. Trump’s issues about Paul Weiss’s lengthy affiliation with Democratic politics.
Legislation corporations are typically aligned with a political occasion. However Paul Weiss’s involvement in litigation in opposition to the primary Trump administration on points like immigration coverage stood out. Additionally, when the Manhattan district legal professional’s workplace investigated a few of Mr. Trump’s enterprise dealings, Paul Weiss lent out two associates to the workplace to assist construct a possible case.
Mr. Giuffra was introduced in by Mr. Trump to work with Mr. Epshteyn, Mr. Karp and Invoice Burck, a lawyer who was advising Mr. Karp, on the main points of the settlement. Mr. Giuffra’s involvement was an ungainly twist, given the competitiveness between his agency and Paul Weiss.
Additionally concerned behind the scenes was the president’s adviser Stephen Miller, a polarizing determine from the primary Trump administration, two folks briefed on the matter stated.
Requested in regards to the assembly and Mr. Miller’s involvement, a White Home spokesman didn’t handle the query and as a substitute praised Mr. Trump for his strain on main legislation corporations to work along with his authorities.
The assembly resulted in a deal, and by Thursday night Mr. Trump had introduced that he was lifting the manager order. Mr. Karp sought to guarantee his agency that the deal was in step with Paul Weiss’s values.
However he has confronted a barrage of public condemnation for making the deal, and plenty of critics stated it might solely embolden the president to hunt retribution in opposition to extra legislation corporations. A number of the criticism got here from a bunch of roughly 140 Paul Weiss alumni who signed a letter to Mr. Karp, calling the choice to settle “cowardly.”
“It’s a everlasting stain on the face of an awesome agency that sought to achieve a revenue by forfeiting its soul,” the attorneys wrote within the letter, which was launched publicly by Frequent Trigger, a nonpartisan authorities watchdog.
To this point, Paul Weiss seems to not have misplaced any companions or huge shoppers.
One shopper who needed to depart was Steven Schwartz, a lawyer dealing with federal overseas bribery expenses in New Jersey. Mr. Schwartz shortly employed protection attorneys from Sullivan & Cromwell to symbolize him out of concern that Mr. Trump’s government order would make it inconceivable for Paul Weiss to symbolize him.
However for the reason that government order was lifted final week, Mr. Schwartz has indicated that he may have second thoughts about altering counsel, in line with court docket filings within the case.
On Sunday, Mr. Karp insisted in his e mail to the agency that the deal was obligatory for Paul Weiss’s survival.
“Nobody within the wider world can admire how irritating it’s to confront an government order like this till one is directed at you,” he wrote.
By Tuesday, one other legislation agency was within the president’s cross hairs.
Mr. Trump issued an executive order in opposition to Jenner & Block, which had employed a high lawyer who labored with the particular counsel Robert Mueller on the investigation into whether or not Mr. Trump had invited Russian interference within the 2016 presidential election.
In a press release saying the order, the White Home stated “President Trump is delivering on his promise to finish the weaponization of presidency.”
Maggie Haberman and Maureen Farrell contributed reporting.
