Banker Turns to Practicing Law . . . Again

[sallyawp]

<p>The following are some exerpts from an interesting article in the online version of American Lawyer magazine:</p>

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A former Cravath, Swaine & Moore tax partner who left that firm to join UBS AG as an investment banker four years ago is planning to return to law firm practice.</p>

<p>Citing the increasingly political environment for bankers and their shrinking compensation, Lewis Steinberg is expected to join Linklaters in June as co-head of the firm’s U.S. operations and head of the firm’s U.S. tax practice. Linklaters announced the hire in a statement released on Tuesday. </p>

<p>Steinberg, 52, says his move is a sign of the times as bankers, worried about how government intervention and political pressure will affect their compensation, look to move into fields that could offer better and more stable compensation. One of those fields, Steinberg says, is the law.

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The idea that someone potentially could earn more as a partner at Linklaters than at UBS as a top banker would have seemed illogical not long ago. </p>

<p>Yet the times are changing. In November, UBS modified its compensation model for top executives, awarding no bonus in difficult times and adding a claw-back feature. This January, The Wall Street Journal reported that managing directors in the U.S. investment banking division would receive no cash bonuses for 2008 and would instead receive a deferred cash or stock payment. The bank, which has received billions in bailout funds from the Swiss government, also slashed its bonus pool by 80 percent to around $1.74 billion, The Journal reported.</p>

<p>Linklaters posted profits per equity partner of £1.44 million ($2.1 million) in the fiscal year that ended April 2008, up 11 percent from the previous year. Still, the firm is feeling recessionary pressures. Billings through the six-month period ending October 31 fell 3 percent to £653 million ($980 million). And in Janaury, Linklaters announced plans to cut 120 lawyers and 150 staffers in London.

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Steinberg isn’t alone among Am Law 100 lawyers who left for investment banks in boom times only to return to firms during the downturn. Bankruptcy specialist James Sprayregen returned to Kirkland & Ellis in December after two years at Goldman Sachs. “I think you’re going to see people who did make the switch from law to banking coming home,” Steinberg says.</p>

<p>Compensation wasn’t the only reason for Steinberg’s move. Advising clients was becoming increasingly difficult as many clients were distracted by the headlines surrounding UBS and other banks. Law firms, he notes, have a higher degree of privacy and aren’t subject to the whims of the stock market.

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Before going into banking, Steinberg was a lawyer at Cravath, which he joined in 1984. He was made a partner in 1991. Steinberg rose to prominence among the tax bar, for a time chairing the New York State Bar Association’s tax section and serving as a co-head of Cravath’s tax practice.

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