HARVEY MILLER
Weil, Gotshal & Manges
New York
Making Debt Pay
ROBERT FISKE
Davis Polk & Wardwell
New York
CHARLES RUFF
Covington & Burling
Washington, D.C.
Turning bankruptcy work into a must-have for big firms.
BANKRUPTCY PRACTICES have become so ubiquitous among Am Law 200 firms that it’s easy to
forget that not so long ago, large firms steered
clear of them. Much of the credit for the change
goes to Harvey Miller, partner in the business
finance and restructuring department at Weil,
Gotshal & Manges. He showed that a bankruptcy practice could be a profitable component
of a broader practice mix, and along the way,
he trained many of the lawyers who today lead
bankruptcy practices at other firms.
In 1970, Miller and two others left a bou-
tique firm to join Weil, which then had about 40
lawyers. The move was met with some skepti-
cism. “Bankruptcy wasn’t a mainstream practice,
and there was confusion [in the legal commu-
nity] as to why they would want us,” Miller says.
Soon the second-guessing would stop: In 1975
W. T. Grant Company filed for Chapter 11, be-
coming the first billion-dollar bankruptcy. Weil
was counsel for the trustee. Weil’s insolvency
group grew to more than 70 lawyers that year,
and Miller went on to represent debtors in some
of the largest filings ever.
FORTY YEARS AGO, “the typical criminal
lawyer was a little disreputable, a little specialized,” says Bruce Baird, cochair of Covington’s white-collar defense and investigations practice. That was before Robert Fiske
(pictured) and Charles Ruff, a pair of federal
prosecutors, popularized white-collar defense as a big-firm pratice area. Fiske prosecuted drug kingpin Leroy “Nicky” Barnes
while serving as U.S. attorney for the Southern District of New York from 1976 to 1980;
Ruff, a former Watergate special prosecutor,
was U.S. attorney for the District of Columbia from 1979 to 1981. “There hadn’t been
people who had been lions of the bar who
had been criminal lawyers before,” Baird
says. “Suddenly [the attitude toward] criminal lawyers changed from, you would never hire one to, everyone should hire [one],
if you can.” Today most Am Law 100 firms
have white-collar defense practices, Baird
notes, and the practice area “has gone from
nothing to perhaps the biggest single aspect
of litigation at many firms.”
THEY WERE AT DIFFEREN T FIRMS and in different cities, but in the 1970s, Richard Beattie and Jack Levin laid the legal groundwork
for the then nascent private equity industry.
For Levin, it began with a call from First National Bank of Chicago, which wanted help
with what it called “risk investing.” Beattie
(pictured) was representing Henry Kravis
and George Roberts, who were then at The
Bear Stearns Companies Inc., in leveraged
buyouts. In both cases, these clients were
forming partnerships to buy private companies whose profit potential, in their view,
wasn’t being fully exploited. “There were no
examples on the legal side so you had to
make it up as you went along,” Beattie says.
There was much to make up. “Frameworks
for dealing with ratios for sharing profits between management and capital providers,
general partners versus limited partners, tax
ramifications, carried interest, and senior
borrowing versus subordinate borrowing all
had to be developed,” Levin says. To see the
legacy of the two lawyers’ improvisational
skills, look no further than the nation’s 2,797
private equity firms, which are currently
backing 17,744 U.S.–based companies.
