Paul Hastings has a new leader for the first time in over two decades.
It wasn’t supposed to be Frank Lopez.
Last year the firm gave the job to Ronan O’Sullivan, a London transactions lawyer and then 16-year veteran of Paul Hastings, he confirmed. President Seth Zachary had groomed O’Sullivan, 49, for the job.
Months later, Zachary told firm partners that O’Sullivan decided not to take on the role for “personal reasons.” Zachary threw his weight behind Lopez, 47, a New York securities attorney who had worked for the firm for just over two years.
“Finding the right person is about choosing someone who has the experience, the skills and the temperament,” said law firm consultant Ralph Baxter. “In a perfect world, that person has been in the business for a while and is ready to do it. But the world isn’t perfect.
Paul Hastings’ leadership transition in October will test whether Lopez, as a newcomer, can build on the growth record of Zachary, who led the Los Angeles-based company for nearly a third of its 70 years of existence.
The Zachary-led firm focused on New York, grew its workforce by nearly a third to 979 lawyers and quadrupled its revenue to nearly $1.6 billion, according to Paul Hastings. Earnings per financial partner increased fivefold to just over $4.7 million.
“These are big shoes to fill,” said Baxter, who served as president of Orrick, Herrington & Sutcliffe for two decades.
The company declined to make Lopez and Zachary available for interviews.
Lopez is rising as a two-year economic boom subsides and a possible recession looms. Among the global group of lawyers he will lead, many knew little about him until he suddenly became the frontrunner for the chairmanship.
The emergence of Lopez
Lopez quickly made his mark when he joined Paul Hastings in April 2019.
He had spent 15 years at Proskauer Rose – with a brief stint as an investment banker at the Jefferies Group – and had advised Jefferies, Citigroup, JPMorgan and Credit Suisse.
At Paul Hastings, the firm appointed him co-head of its securities and capital markets practice. The firm’s revenue has jumped 85% in the past three years, according to the firm.
Last year, Paul Hastings was among the top 10 legal advisers to IPO underwriters, working on deals worth $11 billion, according to Bloomberg data.
Lopez has significantly raised the company’s profile on the leveraged finance front, said two former associates, who spoke on condition of anonymity to discuss the company’s internal operations.
He’s also helped the firm poach rival talent, like Skadden partner Jonathan Ko – a specialist in special-purpose acquisition companies who joined before the heyday of the SPAC market – and group leader Chris DeCresce. Covington & Burling Capital Markets.
Lopez made the company aware of his interest in moving up the management ladder, according to three former employees of Paul Hastings. But Zachary, a 70-year-old tax lawyer nearing retirement, had another leader in mind.
O’Sullivan gets a job
Under Zachary’s leadership, Paul Hastings prides itself on operating democratically.
It has an “open” compensation system that gives partners insight into what their colleagues earn. The approach is uncommon in a Big Law system that often favors opaque pay structures.
Yet inside the company, there is no doubt where the responsibility ends. Zachary had a big say in choosing his successor, according to four former employees.
While banks and corporations may look outside to recruit new leaders, large law firms generally look to lawyers who have been with them for several years or even decades.
Enter O’Sullivan. He became a partner at Paul Hastings a year after leaving Britain’s Herbert Smith in 2005. The firm hired him as a managing partner in London five years later.
The partners figured out that O’Sullivan was the next candidate for president after the company named him global managing partner, according to four former employees. O’Sullivan assumed the company’s No. 3 leadership role in 2018.
He has implemented a UK growth plan, long a headache for American businesses, by poaching top talent from some of the city’s best-known legal operations.
The London office doubled in size to over 100 lawyers under O’Sullivan’s leadership, focusing primarily on private equity and mergers and acquisitions. It reportedly passed the $100 million revenue mark for the first time in 2019, which would put it among the biggest US companies in the UK.
O’Sullivan, who counts the owner of the professional football team City Football Group among his clients, planned to move to New York after being elected the company’s incoming president, according to the four former employees.
Paul Hastings, through spokesman Shade Vaughn, declined to elaborate on the personal reasons that changed O’Sullivan’s plans. “Ronan made a personal decision and we don’t comment on those matters,” Vaughn said.
O’Sullivan, who continues to practice with Paul Hastings in London, and Teri O’Brien – the California lawyer elected as his second-in-command – did not respond to requests for comment when contacted by phone and email. E-mail.
O’Brien left the company for Latham & Watkins in March.
Meet the new boss
O’Sullivan’s overthrow for chairman opened the door for Lopez, who was nominated by Zachary for the job, according to the firm.
The firm’s managing partner, Greg Nitzkowski, simultaneously named Sherrese Smith, a Washington attorney who led the data privacy and cybersecurity practice, as his successor.
With the backing of top executives, Lopez and Smith instantly became first.
“Seth was hugely influential,” said James Jones, a Georgetown University scholar who studies law firms and led Arnold & Porter as a managing partner for nine years. “He was the driving force behind much of the strategic success of this company.”
Zachary oversaw the company’s geographic move away from California. Paul Hastings acquired Manhattan real estate firm Battle Fowler, a deal finalized within months of Zachary taking over, to give the firm more lawyers on the East Coast than in California.
Paul Hastings has 327 attorneys in his New York office, compared to 129 in Los Angeles and Century City, Calif., according to the firm.
Zachary also pushed the company’s strategy of focusing on key growth drivers. These include mergers and acquisitions, private equity and capital markets. Major Wall Street players, including Goldman Sachs, BlackRock and Bridgewater Associates, are clients of Paul Hastings.
The past two years in particular have been lucrative for Paul Hasting and other major law firms. “If I were a law firm head, I would definitely want to have the two most profitable years in the firm’s history,” Jones said.
In the election of Paul Hastings’ new leadership, “partners were encouraged to nominate themselves or others,” Vaughn said. But, with the support of the company’s two top executives, Lopez and Smith secured a supermajority vote on the first ballot.