Kirkland Recruits Cravath Deal Pro Eric Schiele

Kirkland & Ellis has hired yet another partner out of Cravath, Swaine & Moore’s once-untouchable M&A practice, making 43-year-old Eric Schiele its latest star lateral recruit.

Schiele, whose hire Kirkland announced Tuesday, advised on several major deals while at Cravath, a firm where he spent nearly the past 18 years, having made partner in 2008.

Kirkland has now recruited three Cravath partners since 2012, helping the Chicago-founded Am Law 100 firm stand toe-to-toe with the upper echelon of New York’s Wall Street elite.

Sarkis Jebejian was the first to jump to Kirkland as a then-43-year old partner in 2012. In late 2016, then 34-year-old Jonathan Davis headed to Kirkland, citing his work across the table from the firm in representing Molson Coors Brewing Co. on a sidecar sale related to the late 2015 mega-merger between beer industry giants Anheuser-Busch InBev NV and SABMiller plc. (That transaction generated at least $261 million in legal fees.)

Schiele, who also worked across the table from Kirkland on A-B InBev-SABMiller-Molson Coors transactions, said Tuesday that his relationship with Jebejian and Davis was only one factor that drew him to the firm in a move first reported Monday evening by Reuters.

“There was a little bit of familiarity to it, but what attracted me is that it’s a really a great mix that Kirkland has,” Schiele said. “There is all the reach and resources you would expect with a big global platform and excellent brand, but at the same time it’s a very entrepreneurial place and it has an energy that you would expect from a smaller firm.”

Some of the major deals Schiele advised on while at Cravath include counseling The Walt Disney Co. on its pending $66 billion purchase of Twenty-First Century Fox Inc.; Time Warner Inc. on its proposed $85.4 billion cash-and-stock sale to AT&T Inc. (that deal is currently embroiled in antitrust litigation); and AB InBev’s acquisition of SABMiller.

Schiele said it was a difficult decision to leave Cravath, which he said was an “excellent” firm.

Months before Davis left Cravath, the lockstep stalwart suffered perhaps the biggest blow yet to its M&A practice: The departure of Scott Barshay to Paul, Weiss, Rifkind, Wharton & Garrison. Barshay has since led deals for a number of clients he worked with at Cravath, including Qualcomm Inc. and Kraft Heinz Food Co.

Jebejian and Davis have been busy as well, teaming up this week to represent Spectrum Brands Holdings Inc. on the $2 billion sale of its consumer battery business to Energizer Holdings Inc. Davis has also worked as the lead on multibillion-dollar deals alongside partner Daniel Wolf, who joined Kirkland from Skadden, Arps, Meagher, Slate & Flom in a high-profile lateral move from 2009 that helped launch Kirkland’s M&A ascent.

Kirkland has financial incentives to offer partners in Cravath’s lockstep compensation system, which rewards seniority and keeps senior partners from making much more than three times the salary of a junior partner. While the firm’s profits per equity partner are very similar ($4.195 million for Cravath in 2016, compared to $4.1 million at Kirkland), Kirkland’s partners have a much wider pay spread, with some earning more than eight times their junior partners.

Schiele said he met with a number of Kirkland’s leading partners, including firm chairman Jeffrey Hammes, corporate lawyers Jon Ballis and David Fox and bankruptcy bigwig James Sprayregen. He also met individually with Kirkland’s M&A partners in New York.

“It’s very clear how excited they are about building the place, and the resources they’re given in order to do that,” Schiele said. “It’s a group that has an entrepreneurial hunger about it that is really evident when you start having conversations with them.”

That M&A team last year finished No. 6 in Bloomberg’s year-end rankings of law firms advising on the most deals by value, up from a No. 16 spot in 2016. Kirkland advised on 465 deals last year worth more than $305 billion, according to Bloomberg. Cravath ranked No. 10 last year.

“Eric is an outstanding M&A lawyer and one of the most respected transactional attorneys in the country,” said a statement from Kirkland’s Hammes, who assumed leadership of the firm in 2010. “He will be an invaluable addition to our top-tier M&A and private equity practice in New York.”

A spokeswoman at Cravath, which named a new leader of its own two years ago in M&A partner Faiza Saeed, wished Schiele well in his future endeavors.

Schiele’s departure comes the same month that Susan Webster, a former head of Cravath’s general corporate practice, retired from the firm and took a role as general counsel in New York for the Fremont Group, a private investment firm controlled by the Bechtel family.

As for Kirkland, the firm has been busy the past few weeks on the lateral hiring front, bringing back former partner and ex-Jenner & Block intellectual property transactions chair Adam Petravicius in Chicago, adding former Choate, Hall & Stewart private equity co-chair Christian Atwood for its new office in Boston and bringing on a high-profile investment management and funds group from Debevoise & Plimpton in New York.

Kirkland has also lost a few partners of note, including appellate practice founder Christopher Landau, who joined Quinn Emanuel Urquhart & Sullivan in Washington, D.C., and government and internal investigations partner Robert Khuzami, tapped to be second-in-command to new U.S. Attorney for the Southern District of New York Geoffrey Berman.

In 2013, Kirkland reportedly agreed to give Khuzami a $5 million guarantee over two years in order to hire the former director of enforcement at the U.S. Securities and Exchange Commission. Kirkland also saw two relatively junior restructuring partners, Ryan Dahl and Bradley Giordano, leave earlier this month for Weil, Gotshal & Manges and King & Spalding in New York and Chicago, respectively.