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to have lower fees.” Referrals to outside Delaware counsel could result in clients moving business to comparable but lower-priced Delaware firms. “[Firms] reduced the risk by opening Delaware offices and keeping in-house what they were sending to local counsel,” Levine explained.
Skadden’s Delaware office resulted from opportunism. A dominant player in Delaware mergers and acquisition litigation, Skadden worked frequently with two prominent Chancery practi- tioners: Ward and Rothschild. When Ward and Rothschild decided to leave their then-firm, Skadden brought them in. Interviewed in connection with the 40th anniversary of the office, Ward de- scribed his insistence that the Delaware practice be fully integrated with the firm at-large, ensuring it functioned as “an- other floor” of Skadden’s home New York office. Given that the Delaware of-
fice would be the first to practice under the name of an out-of-state firm, Ward also obtained assurance from the Dela- ware Supreme Court that the Delaware group could do so, recalling “I wasn’t going to practice under [a different name] and neither was Steve.”
Ward and Rothschild nurtured a strong Delaware identity. “We were not going to bring anybody in ... who wasn’t a Delaware lawyer, admitted or planning to take the Bar,” Ward re- called. Norman Monhait, who often ap- peared opposite Skadden in governance disputes while a partner in the plaintiff- side Delaware firm Morris & Rosenthal (later Rosenthal, Monhait & Goddess) noted Skadden is “the only out-of-town firm that consistently has representa- tion on the council of the Bar’s Cor- porate Law Section.” Skadden alumni have served on the Delaware Supreme Court (including a current and a former
Justice, as well as a former Chief Jus- tice), Chancery Court (including two former Chancellors), District Court and Superior Court (including one sit- ting judge).
Factors Limiting the Establishment of New Offices
Several factors reduced the incen- tives of large national firms to follow Skadden’s lead. Traditionally, a sig- nificant number of Chancery decisions are unpublished. Until Westlaw and LEXIS offered electronic databases in the 1980s, the in-house libraries of Delaware firms were the only sources for such precedent authorities. As a re- sult, Levine described affiliation with a Delaware firm as “indispensable in sig- nificant governance cases.”
In addition, non-Delaware firms seeking to develop a Delaware corpo- rate governance practice tended to build around one or more prominent Chan- cery practitioners, a limited resource. Successful Chancery practitioners tend to be well-treated by their firms, and are generally reluctant to start over with a new venture.
The higher rates charged by national firms impede their ability to develop lo- cal business, making them dependent on workflow from non-Delaware part- ners. Opportunities for referrals from other firms are limited by fee structures making the work uneconomical and concerns of referral sources that clients may shift business to a competitor.
Most national firms are satisfied rely- ing on expertise provided by traditional Delaware firms when needed. “Even the strongest Delaware firms are not going to challenge to be general counsel to a Fortune 100 company, so there isn’t a concern about losing a client by bring- ing in local counsel,” observed Levine. In addition, for all but a few national firms, the fees they would capture by bringing in-house the work referred to Delaware counsel is marginal compared
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