In Chicago’s dynamic legal market, small and mid-sized law firms are looking aggressively for ways to raise their profile and compete with the global giants. Freeborn & Peters, which has lured partners from Kirkland & Ellis and Mayer Brown in recent months, has announced the formation of a private equity and venture capital team in its Chicago headquarters.
Todd Ohlms, a co-head of Freeborn’s commercial litigation group, and Jeff Mattson, a co-head of the firm’s corporate practice, will oversee this newly formalized division, which also includes partners Cynthia Bergmann, Mark Goodman, Edward Hannon, Gary Jungels, Peter Mason, Robert McWilliams, Brian Smith, and Todd Southwell. Their brief includes helping clients with deals such as venture capital investments, joint ventures, divestitures, recapitalizations, fund formation, fund-to-fund investments, and minority investments. They also advise clients in numerous kinds of litigation.
While certain giant firms may command instant name recognition in Chicago, that does not necessarily give them a competitive edge over smaller platforms when it comes to this type of work.
“A lot of our private equity clients go to some of the ‘mega firms’ for their fund formation work. That’s not surprising. For institutional investors, the cachet of the names of those firms is important,” Ohlms said. “But once the fund is formed and the private equity firm is out acquiring portfolio companies, doing transactions and dealing with the day-to-day legal challenges those portfolio companies face, they often tell us that they don’t get the level of responsiveness and attentiveness from the larger firms that executives at the fund level or portfolio company level need.”
Ohlms pointed to Freeborn’s track record in the representation of funds and portfolio companies. When dealing with a larger portfolio company, which is likely to have an in-house staff, Freeborn’s lawyers will work closely with the client from day to day, he said. If the portfolio company lacks a formal in-house legal staff, then Freeborn often ends up acting in the role of de facto outside general counsel. Freeborn also puts to use its Counsel Connect program, which involves studying and achieving a high level of familiarity with a portfolio company, and then identifying and choosing one of Freeborn’s transactional or litigation partners to act as the company’s lead outside counsel.
Mattson commented on the trend of attorneys leaving larger firms to platforms such as Freeborn, which gained antitrust lawyer Katheleen Ehrhart from Kirkland & Ellis in May 2012, attracted restructuring specialist Eugene Geekie, Jr., from Schiff Hardin in October 2012, and lured private equity and venture capital attorney Gary Jungels, mentioned above, from Mayer Brown just last month.
“I just interviewed another of these candidates today, and he was telling me the same thing that we’ve heard from a lot of lawyers: They’re getting rate pressure from their clients, and clients are leaving them and looking for a platform that allows them to be more competitive, not only with respect to their rates, but also the type of team they bring either to a transaction or for day-to-day, outside general counsel work,” Mattson said.
Mattson described the recruitment of Gary Jungels in the firm’s private equity industry group as a highly strategic recent hire. Jungels has a specialty in fund formation, Mattson noted.
“Gary has the same client base here that he had before, but now in addition to his fund formation work, Freeborn can also provide his clients with the daily legal advice and M&A work that Gary did not necessarily have opportunities to do at his prior firm,” said Mattson.