DLA Piper has hired more than 25 Chicago private equity lawyers from Honigman, a haul that highlights the pressure facing smaller firms after tremendous growth by larger competitors.
The group is led by former Honigman partners Harris Eisenberg, Alex Plakas, Nathan Wilda and Drew Rosenberry, who specialize in middle market private equity transactions, the firm said Thursday. DLA Piper is among the most active law firms advising on those deals, which generally involve funds managing up to $1.5 billion.
The move fits DLA Piper’s strategy to expand its private equity practice, in Chicago, and in the technology and healthcare industry, where many of the group’s deals take place, said Joe Alexander, DLA Piper’s U.S. vice chairman.
“These are all areas we’ve focused on for a while, so this is a very good move for us,” Alexander said in an interview. “They fit everything we want to be and are.”
DLA Piper, like many Big Law firms, is coming off a strong financial performance last year. The firm’s top line grew nearly 11% to more than $3.4 billion, AmLaw reported, while its profits per equity partner rose nearly 18% to roughly $2.5 million.
Record levels of transactional activity last year fed a wave of partner moves, and DLA Piper’s megadeal suggests firms are still confident making big investments. That’s despite some concern about a recent drop-off in broader dealmaking.
Alexander said the firm’s strong year wasn’t a catalyst for this deal. DLA Piper would have been comfortable making the hires in any given market since they fit so well with the firm’s growth strategy, he said.
DLA Piper has more than 100 private equity-focused lawyers in the U.S., according to Alexander. The firm will keep looking to grow in the private equity practice in five major markets: New York, Chicago, Northern California, Texas and Washington.
“We do not expect this to be the last deal in this space or the last lateral group or lateral partner in this space that we bring on in the major markets,” he said. “This is just the beginning.”
DLA Piper Chair Frank Ryan stepped into the role a little over a year ago. He told Bloomberg Law then he wanted the firm to compete for high-end, global projects while also providing “full-service” to clients.
Founded in Detroit, Honigman’s private equity practice has long been highly regarded in the Midwest. The firm has regularly hired Chicago lawyers from Kirkland & Ellis, a leading private equity firm which has its largest office in the Windy City.
Honigman’s Chicago office opened in 2015 with the acquisition of a 14-lawyer litigation boutique. The firm recruited partners from larger firms in the city, who were often drawn to a lower-cost model allowing them to develop business from a broader swathe of clients.
Honigman said it is a “healthy, highly profitable” firm that’s recruiting to support its corporate, private equity and transactional practices, which have made nearly 80 hires over the past 18 months. The firm said it has experienced “record growth” in recent years and remains “well-positioned” across its practices and in Chicago.
“We will have departures just like we will have arrivals,” the firm said in a statement. “In today’s highly competitive environment, it is simply the nature of the beast for the legal industry.”
Plakas, co-leader of Honigman’s private equity practice and a member of its board of directors, joined in 2015 from Kirkland.
Plakas recently advised on the sale of Keystone Capital portfolio company Movilitas, which manages digital supply chains. He also advised MERGE, a digital marketing company, in its acquisition of marketing operations company, Perkuto. The terms of the deals were not disclosed.
Eisenberg served as Honigman’s Chicago office managing partner after joining from Katten Muchin Rosenman in 2018.
Rosenberry, who moved to Honigman from Kirkland in 2016, has represented investment firms Keystone Capital and Benford Capital.
Wilda came to Honigman in 2017 from Benesch Law, and previously worked at Kirkland.
The move marks the second time in as many months that a larger firm has raided a smaller rival for a major group hire.
Paul Hastings last month hired 43 lawyers from Stroock & Stroock & Lavan’s bankruptcy practice. The American Lawyer reported that was the largest single group hire since 2018.
Both Honigman and Stroock are in the bottom 25 of the top 200 law firms by revenue, according to AmLaw data. DLA Piper is among the top five largest firms by revenue and Paul Hastings is in the top 50.
The group hires could be a symptom of the broadening gap in revenue and profitability between the largest law firms and the rest, which consultants have long said will drive competitive pressures or mergers.
Citi Private Bank said the largest 50 law firms grew revenue by 16% through three quarters in 2021, while the Second Hundred group saw 11% growth, exacerbating a longer-term trend.