Cravath to open second US office

Cravath, Swaine & Moore is to open an office in Washington DC with a group of senior lawyers recruited from federal agencies, marking the first new location for one of the oldest US law firms in almost three decades.

Cravath on Monday said it had hired former leaders of the Federal Deposit Insurance Corporation and the US Securities and Exchange Commission to advise clients on an “increasingly complex and active regulatory environment”.

The expansion is a departure for Cravath that currently operates just two offices in New York and London, and has built a reputation as one of Wall Street’s top advisers. The elite firm was founded in 1819 in New York and opened a London base in 1973. It previously had offices in Paris and Hong Kong, which it later closed.

Until now it has focused mostly on mergers and acquisitions and general corporate litigation, instead of expanding aggressively into other areas and countries as some of its rivals have done.

But Washington’s importance as a regulatory epicentre has made it a hotspot for law firms offering advice on government investigations and antitrust probes — an area that has come into sharp focus for President Joe Biden’s administration.

Cravath has hired Jelena McWilliams, former chair of the FDIC, to lead the new office, and has also added former commissioner and acting chair of the SEC Elad Roisman and Jennifer Leete, former associate director of enforcement at the SEC.

The firm said the new office would be able to advise clients in sectors such as fintech and financial services on regulatory probes and investigations, as well as advising them on general M&A transactions.

Presiding partner Faiza Saeed said: “Our clients face an increasingly complex and active regulatory environment, and our move today enhances our ability to provide the most creative advice in addressing their most challenging matters.”

Cravath in recent months has sought to add experience in areas such as antitrust, hiring former assistant director at the Federal Trade Commission Daniel Zach last year to its New York office.

Cravath, which generated $1bn in revenue last year according to AmLaw data, ranks among the most prestigious global law firms. The “Cravath system” — a set of management principles — is viewed as a template for modern law firms.

However, in recent months it has been forced to rethink an element of its strategy in the face of fierce competition from rivals and some high-profile defections.

Cravath once rarely suffered exits to rival firms. But in the past 12 months it has lost M&A partner Jenny Hochenberg, to “magic circle” law firm Freshfields Bruckhaus Deringer, and corporate partner Damien Zoubek, who also left for Freshfields. M&A partner Allison Wein went to Kirkland & Ellis in May.

Its recent exits come in spite of efforts to shake up the firm’s pay system. Cravath last year decided to abandon its renowned remuneration structure in which partners are paid solely based on rank, in favour of a more merit-based system.