Summary List Placement
A law firm known for representing Donald Trump that has been shrinking in recent years started the year off by making partners pony up a collective $6.5 million, a rare event for the firm.
Kasowitz Benson Torres, led by Marc Kasowitz, had a capital call for the first time in decades last month. Kasowitz told Insider the amount raised was $6.5 million. In 2019, the total pay for the firm’s 85 partners was about $95 million, according to the American Lawyer.
The capital came shortly before nine lawyers left the Kasowitz firm to launch their own shop, Glenn Agre Bergman & Fuentes. That group “did not leave with any material amount of business,” Kasowitz said Wednesday. He also said the capital call was in line with what other law firms do and said his firm’s average equity partner pay rose about 23% last year, though the number of equity partners fell.
“It’s not a question of needing the capital. It’s a question of having a very significant worldwide event and just thinking that it’s prudent,” he said, referring to the pandemic.
Law firms typically require new partners to contribute capital and maintain a reserve used to pay salaries and expenses that ranges from 15% to 40% of a firm’s annual profits, according to law firm consultants. But partners promoted or hired at Kasowitz have historically had to chip in far less. “It’s just small enough that it’s not worth it for me to sue,” said one former partner, who asked not to be named.
Court closures for several months in 2020 put a damper on some litigators’ work last year, but they have transitioned to remote depositions and arguments. The Kasowitz firm’s big cases have included representations of Teva Pharmaceuticals and Pilgrim’s Pride in antitrust cases, work for the hedge fund Harbinger Capital Partners, a patent case against Roku, and a $600 million win for the bond insurer MBIA in a yearslong dispute with Credit Suisse.
The firm also received a $10 million forgivable loan through the Paycheck Protection Program. Last month, the blog Above The Law reported that Kasowitz would be giving special bonuses of $7,500 to $40,000 to some associates, on top of normal bonuses that range from $15,000 to $100,000.
The partners who left earlier this month include Andrew Glenn, who represents creditors in restructuring cases; Lyn Agre, a white-collar defense attorney in San Francisco; Jed Bergman, a former Wachtell lawyer praised as brainy by former colleagues; and Olga Fuentes Skinner, who has worked on complex commercial disputes. Their move was first reported by Law.com.
Court records show the group worked on several cases together while at Kasowitz, including actions against Deutsche Bank and KPMG on behalf of creditors who lent SunEdison $725 million shortly before its bankruptcy. And some of them are among the lawyers representing the insurance company Ambac in its challenge to the Puerto Rico restructuring law PROMESA.
Glenn represents minority owners of bankrupt auto parts supplier Garrett Motion Inc. and was said by people who knew him to have significant business. He was one of the lead partners on the firm’s work on the bankruptcy of MDC Energy, which brought in about $8 million, according to a recent bankruptcy court filing.
It’s not clear why the Glenn Agre group left; they declined to comment. But some people who have left the firm over the years saw Kasowitz’s long history of working for Donald Trump as a reputational hazard. He’s currently defending him in defamation cases brought by Summer Zervos and E. Jean Carroll, two women who accused the former president of sexual assault, and sued him after he called them liars.
Many big law firms won’t work for Trump anymore. Morgan Lewis and Seyfarth Shaw said they would stop representing his businesses in the aftermath of the Jan. 6 riot that led to his second impeachment. Shortly afterward, it was reported that Kasowitz was paid $1.6 million by the Trump campaign in the fourth quarter of 2020, more than any other law firm.
Since 2015, the firm has lost other groups of lawyers, including four employment litigators who left for DLA Piper, a team led by Robin Cohen that sues insurance companies that moved to McKool Smith and a real estate corporate team led by Wally Schwartz that moved to Vinson & Elkins. Other big departures have included Eleanor Alter, a star divorce lawyer who started her own firm; Michael Bowe, who joined Brown Rudnick; and Aaron Marks, once seen by people at the firm as Kasowitz’s likely successor, who moved to Kirkland & Ellis.
Three former partners — Kyung Lee, David Fermino, and David Bovino — sued the firm last year, claiming that they were paid less than they were promised. Another case was filed in January by Mansi Shah, who helped build the firm’s entertainment practice and said she is still owed hundreds of thousands of dollars for work she helped bring in.