Legal change agent: Robert Link Jr.
Deep in the heart of Lower Manhattan is a maze of narrow thoroughfares where New York City's early commercial development flourished. Adjacent to the East River, the area became home to lawyers who thrived on handling cases that sprouted from the international trade plied across the open seas. Admiralty law was a legal specialty of the day, and those who were good at it prospered. Among those who practiced it best was a law firm known today as Cadwalader, Wickersham & Taft, a partnership that dates its heritage to 1792.
Today, though, admiralty law has given ground to the esoteric practice of crafting sophisticated financial instruments that enable the capital markets to spread multibillion-dollar risks around. Now, those same Manhattan streets wend their way through the heart of the global financial system. And you can still find Cadwalader lawyers at the center of commerce here, as well as in other financial power hubs such as London, Washington, D.C., and Charlotte, N.C.
The new era is reflected in changes at the firm, where chairman and managing partner Robert Link Jr. is trying to balance the deliberative nature of a law firm, with each partner enjoying a say in the operations of the practice, with 21st-century business, which demands razor-sharp, lightning-quick decision making. It is a delicate task: adhering to the firm's long history and tradition--Cadwalader counted Alexander Hamilton among its early clients--while maintaining a modern-day culture.
Despite its size, with 599 lawyers and a like number of administrative and support staff, Cadwalader does not try to be all things to all clients. In recent years, Link and other senior partners have reorganized the firm around a core group of high-margin practices centered on the financial services industry. "Back in the early '90s, we had developed very significant practices in structured finance and securitization, but we were still doing a lot of practice in areas that had kind of slipped," says the 49-year-old Link.
Link brings to his management task some true number-crunching skills. A partner since 1990, he joined the firm in 1987 after having practiced real-estate law in Atlanta and New York. He is an honors graduate in accounting from the University of Tennessee, where he also earned his M.B.A. and J.D. "Law firms now are run as businesses," he says. "We do $400 million plus in revenues. For us, it was about taking our strengths and slowly over time refocusing."
That strategy has helped Cadwalader reach a position of dominance among the cadre of firms providing legal services to the corporate powers of global finance. The Federal Home Loan Mortgage Corp., or Freddie Mac, is a major client, as are many other big players in the capital and real-estate finance markets. Cadwalader was a pioneer in the securitization of financial assets, which allows lenders and others to package mortgages and other obligations into securities that can be sold to investors. The firm represented Freddie Mac in the first issue of collateralized mortgage obligations (popularly known as CMO s) and also led the way in the securitization of automobile loans with General Motors Acceptance Corp. and, with Goldman Sachs, the pooling of credit card debt.
Link ticks off the practice areas that once commanded more resources and revenues, admiralty and railroads being two examples. Obviously, as the importance of shipping and rail transportation dimmed, so did the need for lawyers with that expertise. At the same time, the demands of global clients--an opinion might be needed in Europe about a complicated corporate financial restructuring during the middle of the night New York time--requires a state-of-the-art technology infrastructure and administrative support management across multiple time zones. "We have 1,300 employees," says Link. "That's not a mom and pop shop anymore."
Consider, for example, the planned move to its new headquarters at One World Financial Center, still in the financial district unlike those of some other large New York firms that have settled in Midtown. The move and completion of the new space will cost $80 million, Link says. "There is a significant job managing that. It can affect your profitability."
Up to date. The old model for a top-drawer corporate law firm of one lawyer, one secretary is no longer affordable. The new reality is managed pools of support staff, with someone overseeing the workflow and shifting resources accordingly. "You now have a lawyer-to-secretary ratio of 3 to 1," Link says, and the younger lawyers come into the firm equipped with the technical savvy that makes the use of time- and money-saving devices such as PC s, voice mail, BlackBerrys, and the like more common.
"I think Bob does a terrific job of making sure we understand from a business sense how we spend money, and he's done that in a very collegial way," says Christopher White, who chairs Cadwalader's real-estate finance department and also serves on the firm's management committee.
Link attributes Cadwalader's reincarnation in part to a new openness about the profession. The American Lawyer 's public listing of the profitability of the top law firms has changed the industry, he says. "We were 11th in profitability last year, a significant improvement over where we were," he boasts. The firm's focus on more lucrative practice areas is reflected in its profitability, which rose much faster than overall revenues. Profits per partner at Cadwalader soared in 2003 to $1.61 million, according to American Lawyer, up 28.8 percent from the year before and well above the average of $930,700 for the top 100 law firms in the country. The firm was 51st in gross revenues for 2003, at $354 million, up 13.1 percent from the year before, when it was ranked 56th.
That's the kind of performance that would most likely have brought a smile to the firm's industrious and illustrious forefathers.
This story appears in the October 11, 2004 print edition of U.S. News & World Report.