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Duane Morris Adds Top Philadelphia Transactional Lawyer
By Zack Needles
September 7, 2010
The Legal Intelligencer
Now may seem like an unlikely time for a firm to beef up its corporate practice, but with the addition of new partner Richard P. Jaffe, Philadelphia-based Duane Morris sees an opportunity to become a national leader in middle market private equity, an area the firm believes is about to heat up.
"For us, with an emphasis on private equity in the middle market, this is probably going to be our best year ever," said Duane Morris Chairman John J. Soroko.
Jaffe, whose practice centers on private equity and mergers and acquisitions, as well as venture capital and corporate governance, joined the firm as a partner on Aug. 30, after eight years as a partner at Philadelphia-based Ballard Spahr.
"Middle market private equity" can be described as equity capital that is not listed on a public exchange, in companies that are significantly larger than "Main Street" small businesses but are not among the largest corporations.
Jaffe envisions a rise in private equity work in the near future.
"The trend I see is that there's a significant amount of transitioning in companies, a lot of succession planning, as baby boomers begin to look to try monetize their investments," he said.
Jaffe said he was approached with an offer to join Duane Morris 18 months ago but wasn't ready to move at the time.
"Then about four months ago, I talked to [Duane Morris Chairman Emeritus] Sheldon Bonovitz and he described a very compelling opportunity," he said. "I then met with John Soroko and was impressed with his leadership."
Soon after, Jaffe made what he said was the "very difficult decision" to leave Ballard Spahr, the firm he had joined in April 2002 after the failed merger of his old firm, Mesirov Gelman Jaffe Cramer & Jamieson, with Schnader Harrison Segal & Lewis.
Ballard Spahr Chair Arthur Makadon said he believes Jaffe had become "frustrated" with what he perceived to be the firm's somewhat sluggish private equity practice.
"I think he sees private equity as the wave of the future, and maybe it is, but it wasn't happening as quickly as he had hoped here," Makadon said. "We were devoting much more attention to [practice areas such as] energy and employee benefits."
Makadon said that while Ballard Spahr's corporate practice "held its own" throughout the economic downturn, cost-cutting by clients resulted in fewer deals, forcing the firm to shift its focus to other practices.
Jaffe said that while he never actively searched for a new firm, Makadon's assessment of his reason for leaving Ballard Spahr was basically accurate.
"There was some frustration with the growth of the practice," Jaffe said.
Makadon said he wanted Jaffe to stay at Ballard Spahr but that he understood his desire to make "a fresh start" at a new firm, equating Jaffe's departure to another recent lateral move in Philadelphia: The Phillies' midsummer acquisition of ex-Houston Astros pitcher Roy Oswalt, who has improved his performance since coming to town.
"It's like baseball trades that reinvigorate people," Makadon said. "I think of this in the same way. Roy Oswalt is much better as a Phillie than he was an Astro. ... Maybe Richard will be the Roy Oswalt of Duane Morris."
Recruiter Michael Coleman of Coleman Nourian in Philadelphia, who was not involved in the deal, called Jaffe "an important addition for Duane Morris."
"I think Richard has developed a strong reputation over the years as one of the region's leading venture capital, private equity and technology lawyers," he said. "He brings to Duane just a wealth of experience, extensive contacts and high visibility and stature, so certainly, when I think of the areas in which he has the strongest reputation, I think of him today as one of the leaders of those practice areas."
Frank D'Amore of Attorney Career Catalysts, who also was not involved in the deal, had a similar take.
"He has long been regarded as one of the top transactional lawyers in Philadelphia," he said. "When he went to Ballard from Schnader, people regarded it as a very significant addition by Ballard Spahr and his reputation has remained good in Philadelphia. Consequently, even in a bit of a challenging time for transactional practices, adding someone like him to a firm is definitely noteworthy."
Jaffe said he expects "virtually all" of his clients will follow him to his new firm and Soroko said the firm anticipates Jaffe will be "substantially self-sustaining" and "110 percent fully occupied."
Makadon said Jaffe's departure would have "no impact" on Ballard Spahr's business.
According to Jaffe, Duane Morris presents a new opportunity to grow his practice on a national scale, since the firm has offices in "major money centers" like New York, Chicago and Boston, as well as in Philadelphia, Atlanta, Baltimore and Washington, D.C.
That, coupled with the firm's decision this past June to name George Nemphos, a private equity lawyer who manages the firm's Baltimore office, chair of its firmwide corporate practice, was proof to Jaffe of Duane Morris' "commitment to dedicate resources" to its private equity practice.
"This was, for us, an instance of adding strength to strength because Richard is one of the best-known private equity lawyers in Philadelphia," said Soroko.
According to Soroko, Duane Morris' corporate practice not only weathered the economic storm of the past few years, but actually did well despite it.
"I could see kind of at the high end, something like a New York capital markets-type practice that's heavily reliant on IPOs or major M&A-type transactions probably still has not bounced back to pre-2008 levels," he said. "But we've seen very solid performance out of our corporate group even during the industry downturn, so for us it's been a pretty solid state."
Now, according to Soroko, the firm is in a position to add more corporate lawyers in anticipation of an uptick in the practice.
Jaffe said his own practice "was not as vibrant as I would have liked" during the recession, but added that he sees the economy moving in a positive direction.
"While it's still not robust, what I'm seeing is that it's trending the right way," he said, explaining that banks are becoming more receptive to loans than they have been in recent years.
Jaffe said corporate deals are still awaiting a jumpstart, but he's optimistic.
"There's significant equity capital overhang and that capital has to be deployed, but I think it's coming back," he said.
This article originally appeared in The Legal Intelligencer and is republished here with permission from law.com.
