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Building Blocks of CEE: Altheimer & Gray Partners Reflect on the Creation of the First Pan-CEE Law Firm

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“The guys in the Central European group were a really collegial group and we really enjoyed what we did and truly felt we were making a difference, and we had good clients, and the results were really gratifying. So it was a very good, unique core group of people who were fully committed to Central and Eastern Europe at a historic time.” – Obie Moore

Altheimer & Gray was one of the first international law firms to establish a significant presence in Central and Eastern Europe, a somewhat surprising achievement, as the firm had, for most of its life, only one office. Nonetheless, despite its relatively modest profile in the United States, by the time the firm dissolved in 2003, it had seven offices in CEE, plus one in London, one in Paris, and one in Shanghai.

But dissolve it did, and although significant traces of this once proud network remain in other firms, A&G itself is increasingly forgotten. 

We reached out to many of the individuals who played key roles in initiating, developing, and managing A&G’s CEE presence, now almost 15 years after the firm itself closed its doors.

Sweet Home Chicago

Jim Carroll: Altheimer as a law firm I understand started in 1915, though I was not part of that (laughs). Altheimer was – and I believe this was true – the largest firm anywhere in the United States with only one office. It was utterly parochial. I was co-chairman of the international practice group of Altheimer. The other co-chairmen were Vic Pollak and Louis Goldman. 

Louis Goldman: Yeah, I created this in the beginning. Jim Carroll was heavily involved for the first four-five years until he left the firm. So it was the two of us running it. We were the Co-Chairs – there was actually a third guy involved in the first year or two, but he left the firm and wasn’t involved after that.

Jim Carroll: Altheimer & Gray hadn’t been planning to expand internationally. It was coincidental. It was not part of a plan. The sun and the moon and the stars lined up. The Polish government fell, the new government came in, and they said they were going to become more Westernized. They were clearly looking to the West. Chicago is supposed to be the second-biggest Polish city in the world. It made sense for a Chicago firm to be ground-breaking there. We were able over time to find Polish corporate lawyers who wanted to be involved with us. And then we had a client that was encouraging us. So that’s the sun and the moon and the stars.

I came into the firm by way of a sort-of merger – a small firm that was absorbed in large measure into Altheimer, just after I had become a partner in my first firm. We brought with us a client called A. Epstein and Sons International. Epstein started out in the Chicago stockyards, and they were architects and engineers that developed meat-packing plants, before branching off into lots of other things, including office buildings and airport design, etc. They were in Poland for years (they were doing significant turn-key meat packing plant projects for the state pork entity, whatever that was) and they were successful before us, but when the government changed, they really blossomed, and that was the basis for our opening an office. 

In 1990, I got a call from Mac Raczkiewicz, the CEO of the Polish subsidiary of Epstein, who said, “Jim, we’re going to expand our operations a lot in Poland, and we’re going to need lawyers, and we would prefer it was you.” I remember that vividly: “We would prefer it was you.” Then there was a subtle, “but if it’s not, we’ll figure out what Baker & McKenzie can do.” So Louis and I got on an airplane and went to Poland. We were looking at, I think, three things: We were looking at the marketplace for lawyers. We were looking at lawyers. And we were trying to find out whether we had any existing clients besides Epstein. 

We decided we would recommend that the firm open an office in Poland and that it be staffed with Polish lawyers. The firm was remarkably supportive. We recruited a wonderful lawyer with great linguistic skills and commercial experience named Gabriel Wujek. We were profitable our first day.

Louis Goldman: In the late 1970s I had spent almost 3 years in Paris working for Cleary Gottlieb, and I saw how they developed their international network, and then when the Berlin Wall fell I realized that we could do the same thing and we’d be a first mover. And I basically followed their model, which was, I realized that to succeed, in each of these markets we entered, you couldn’t just send American lawyers. You had to find the most talented local business lawyers. And in Poland – because we’d had this experience with Epstein and they knew a lot of people – when I went out there that summer they helped me identify four or five people to interview and vet, and I found a guy who was really the best business lawyer in Poland. Gabriel Wujek. And he had been a senior lawyer with the Ministry of Foreign Economic Relations. Brilliant guy. He had spent a handful of years in the 80s working for the Polish government in New York. He spoke five or six languages. He was a brilliant business lawyer. If I had to look at all the lawyers I’ve met over the years – U.S. and otherwise – I’d put him in the top five. And we got along very well, and he was ready to make a move, because he had a vision of what was going to happen in Poland. So I hired him, and I hired his number two at the Ministry, Wlodek Radzikowski. We operated out of an unused apartment that Epstein had had for the first month or two, but then the neighbors didn’t like that, and we basically were told we had to leave, and Wujek helped us find our initial real estate in Warsaw. That was at 54 Malagrawska – about a block from the Marriott Hotel, which at that point was the only real Western business hotel there.

We were the first international firm to open in Poland, when we opened in the summer of 1990. And I told Wujek that if this went well, we’d hire another lawyer. It went so well that five months later we had eight lawyers. 

Jim Carroll: Then the question was, could Epstein provide enough work to sustain us. I had a very strong feeling that we not use the “Field of Dreams” model. I kept saying, “let’s not build it and see if they come. Let’s have them and build around them.” Make it grow, but have something that supports overhead from Day One. That was Epstein. And in fact Epstein was a very significant client for a long time in Warsaw. The primary initial project for Epstein was to build a building called the Warsaw Corporate Center, and if you walk across the street from the Marriott, there is a small modern office building that’s always had a tremendous list of tenants. It was the IFC’s first Warsaw location, for instance. It was the first modern commercial developer-driven, privately owned, first-class office building in Poland. We were the lawyers for it. Alexandra Cole led that legal work.

Beloit was the second big client that we got in Poland. Apparently the General Counsel saw one of our announcements in the paper that we had just opened our office, and he called just a few days after the announcement. He got hold of me, we talked, and we ended up representing a company called the Beloit Corporation – a subsidiary of a Fortune 200 company called Harnischfeger, in Milwaukee – that made paper mills. There were three companies that made paper mills at the time: there was a Scandinavian company, there was Beloit, and there was a communist company, called FAMPA – which was a licensee of Beloit. They were using Beloit’s technology to make paper mills for the Eastern Bloc. FAMPA turned out to be the first privatization with foreign investment in Poland. We represented the buyer. It was fascinating. Among other things there was no banking system, so there was no place to send the wire. We were told that if we sent the wire it would probably be credited within three months of sending it (laughs). So we took cashiers checks. But we didn’t know what the actual purchase price would be due to adjustments. So we took one big check and then a stack of USD 100,000 checks to make change. 

We had to set up an escrow. We had to escrow documents, and we really didn’t have any safe place for them. So I made a reservation for two weeks later at the Marriott, and put stuff in the Marriott safe. Including the checks (laughs). 

Expanding Across CEE

After opening the Warsaw office in August 1990, Goldman and Carroll started looking for other markets to move into. Its next destination: Prague.

Louis Goldman: The initial plan was to see how successful we would be in Poland, but I could tell almost immediately that we were getting clients that the firm didn’t have in the US, and I realized that every major US and European multinational company was going to go there, because there were so many opportunities, and I knew that if we had an office with the right personnel, that we could capture a big market share. I could see immediately in Poland that that was happening, and I could see that in Prague we could do the same thing. And so we thought, Central and Eastern Europe over the next ten years would be a gold mine for us.

So the next year I went to Prague to check it out, and although there had been a lot of press about what had been going on there, I realized when I got there that nothing had happened. There had been a lot of talk about how they were going to open up the market, but they hadn’t actually done anything. So I knew that even though we weren’t the first there – White & Case had gotten there before us – that we in effect were getting in on the ground floor. And I checked out a bunch of lawyers, and I found a very small firm that had young lawyers that were doing very good work, and I realized we could start with them, and we got them to join us. We had a guy there named Petr Kotab – terrific lawyer, one of the best lawyers in the Czech Republic, also on the faculty of the Charles University School of Law – and then, just after we opened, a US headhunter introduced me to a woman named Alena Banyaiova, and I could tell she was going to be great. She had just returned to the Czech Republic – she had spent six months in the US – and then she joined us. The two of them were tremendous.

We opened in Prague in 1991. The thing that happened that really got us going there was I went and met with the Ministry of Privatization. They were about to do their privatizations, and they couldn’t handle the work. And I said, “we’ll send one of our guys for three-four months, and he’ll only work on your projects, and he won’t work for us.” And what we found was, they were just letting these companies come with their own purchase agreements, and they were all different, and they couldn’t manage that. We said, “what you need to do is have a form you’ve approved, and tell Western companies they don’t have to use it, but if they start with that document their deal will get done quicker.” And we prepared a draft – we had a great M&A practice in Chicago – and we prepared a purchase agreement for them, and adapted it to their market, and we were afraid that other people would claim credit for that form. So what I had my guys do was, on every page of the form, in bold type, I had them write, “Altheimer & Gray Draft.” And when there was finally a form that the government was going to use, they never took that off. So we got tremendous publicity from that.

And we did that work for them for free for three-four months, and then once we left we began representing a lot of buyers.

So for example, in Poland, we handled the acquisition by Gillette of the biggest razor company in Poland. So that was a sale from the government to Gillette. Then Gillette wanted to buy the biggest razor company in the Czech Republic, so they hired us to handle that. That was more like a tender offer as in the Czech Republic the razor company was owned by voucher holders.

In November 1993 the firm opened an office in Bratislava (also managed by Czech Partners Petr Kotab and Alena Banyaiova) – and, that same month, found the right person to open a Kyiv office. 

Jim Carroll: I was happily involved in bringing Jaroslawa Johnson on board. She’s spectacular. It was just sort of the perfect circumstance. To have a prominent Chicago lawyer who wanted to develop her Ukrainian background – she’s Ukrainian born, with quite a life story. In any event, I think the world of Slawa, and we were very lucky to attract her. She was a perfect fit for us.

Jaroslawa Johnson: In 1993 Louis Goldman and Jim Carroll asked if I’d help them in Ukraine. At the time, I was a partner at Hinshaw & Culbertson, a Chicago insurance defense firm, but I was doing international work, because Poland had started to open, and I spoke some Polish. My parents come from the part of Ukraine where people speak Polish and Ukrainian, and I spoke both kitchen Polish and fluent Ukrainian. Eventually, with one Polish client, I developed my first Eastern European experience in Poland. Louis Goldman and Jim Carroll heard of my work there and sought me out in Chicago. I was going back and forth to Poland with my Polish clients. At that time you couldn’t even have an office in Poland. Most of us worked out of the Marriott in downtown Warsaw. I would come in for a week or ten days, and then I would go back home.

These two partners courted me for a while and convinced me to leave Hinshaw and join them to open an office in Kyiv, Ukraine. The opportunity seemed exciting, and I asked my husband if he minded if I did this, and he said “no, you’ll kick yourself if you don’t do this – it’s a historic opportunity for you and Ukraine. Go for it.” And so we developed a family routine. Once the school year was over, my husband, daughter, and I would move to Kyiv and live there for the summer. My daughter would take classes in Kyiv. My husband, a professor, would write. Then we would return in August in time for both of them to go back to school.

The Kyiv office was a green field creation. I established the office – a two-room office – in a school, because foreigners could not lease space at the time, and I hired a couple Ukrainian lawyers, a few secretaries/translators, installed several computers myself, and schlepped office supplies back and forth, but it was an optimistic, entrepreneurial, and exciting time to be in Ukraine. 

A&G knew little about working in Ukraine. I think Louis Goldman and Jim Carroll had only visited Ukraine once before I opened the office. But I spoke the language and was able to assemble a good team. Eventually A&G provided me with a native English speaking senior associate from the Prague office who would periodically supervise the office when I was in the States. Brad Haskins was very supportive and developed an excellent working relationship with Ukrainians. Later, a senior partner from Chicago, David Lester – who has since passed away – also worked in Kyiv. David was a great old–fashioned corporate lawyer who knew how to do everything and was a great teacher. David taught the Ukrainian lawyers how to draft Western-style documents. For example, the first opinion letters in Ukraine were developed by David, Brad, and me. And now when I see an opinion letter from any firm in Kyiv, I see language that we in fact crafted. 

I was much younger and more aggressive then. I developed business for the Kyiv office by attending domestic and international meetings. There was great interest in the former Soviet economies, so there were many opportunities to speak and participate in forums and trade shows. I met representatives of companies [that were] interested in investing in Ukraine but didn’t know how to start. It was new territory to most western businesses. So I was able to bridge that gap, to work with their in-house lawyers, to identify issues, to deal with the state property fund, if they wanted to privatize a company. Philip Morris was investing in a state-owned cigarette company which needed to be privatized. Kraft bought a chocolate factory, also from the state, which was actually the first privatization in Ukraine. We were working on comparable matters for many clients. This was in 1993-1995 when major international companies started to come into Ukraine. 

Adam Mycyk: I joined A&G’s Kyiv office in 1995. I was already in Kyiv with a small firm. [Working in Ukraine] kind of made sense for me, because my parents are from Ukraine, so I grew up in a Ukrainian-speaking household. It was always something that we dreamt about, seeing an independent Ukraine, and then in college, my major was international relations, with a concentration in Soviet and Eastern European Studies, and then a Russian language and literature minor. Sort of all the signs were there. And so when this opportunity came up to come over, I thought, “you know, what the hell.” It just kind of made sense. I was there about seven or eight months, and I was thinking maybe even about moving back, but then I figured let me just send my resume into some headhunters, and basically Altheimer was at the point where they were looking for an American associate to work in their Kyiv office.

All of our clients at that time were foreign companies coming in. So we would basically do whatever they wanted us to do. A lot of it at that point was just setting up a presence. Many big names. Sometimes there were joint-venture type projects, particularly with state-owned companies, so there was a lot of that work, too, where people were looking to get into a particular area, but the only way they could really do it was to partner up with a Ukrainian company that was already in it.

Jim Carroll: It was wonderful! It was exciting and wonderful. Slawa led the first privatization with foreign investment in Ukraine. I got a chance to work on that – the purchase of a chocolate factory. We also did the first one in Slovakia. That one’s a little harder to describe, because at that time the Slovakian government was so corrupt. It was the first real privatization deal, with real money. That’s a better way of putting it.

Now picking up steam, the firm saw opportunities everywhere. Next stop: Istanbul.

Haluk Can Ozel: My firm was a boutique. A small law firm. Just four lawyers, and one or two assistants. One of the Altheimer & Gray Partners, George Cowell, who was running the Real Estate department of A&G at that time, had a Turkish project for Hilton Hotels. He’d been promoting the Conrad Hotel in Istanbul, and we were introduced by a mutual friend. And then we started working together on that project, and that project led to this partnership, with me merging my practice with A&G’s practice. Altheimer & Gray was the second international law firm established in Turkey, after White & Case. It was mid-1993 when we started negotiating, and we officially opened in 1994, though unofficially we were working out of my offices from November or October 1993. Although I established my first contacts with George Cowell (who was quite a lawyer, really), then I met with the international chairs of A&G: Louis and at that time Jim Carroll. Louis Goldman is a very well-constructed lawyer. He is a great thinker, and had a very large dimension. People like him made me feel that, “ok, they’re from Chicago, but they are international.”

After opening an office in Beijing, in 1995 the firm hired Rob Bata to help it expand into Budapest and Bucharest as well.

Louis Goldman: I realized it would be quite useful to have an American in Prague. Rob’s role was threefold. He was a talented lawyer who could play a key role on certain types of transactions, he was good at business development, and he would be a solid addition to the Prague Management team of Petr Kotab and Alena Banyaiova (which then became a three-person Management Committee). Over time, in effect, he was the Senior Partner in that office. He also was in a great position to let us look at the Budapest market.

Rob Bata: Louis Goldman was the one who found me to begin with, and he’s the one who persuaded me to join the firm. I had become involved in Eastern Europe as early as 1989. I had a perfectly nice and successful standard Wall Street M&A practice, with Mayer Brown & Platt. In fact, I was one of the seven partners that started the New York office of Mayer Brown & Platt. But when the Berlin Wall came down, I immediately felt that there was going to be extraordinary business opportunity in Eastern Europe, with privatizations and so forth. And I was a Russian & East European Studies major at Yale; I had a lot of background in Eastern Europe. I sort of knew the area, in any event, from an academic perspective, and my family was of an East European background, and I got on airplane immediately, and I began to develop business in Budapest. I did that for a while, and my firm was quite interested in what I was doing, but they weren’t ready to open an office. But another firm approached me, and said “we’re too small to go to London, but we’d love to get into Europe, and we see Eastern Europe as the way to get into it. And we’d like you to come and run that practice for us.” And so I joined that firm. And that was Strook & Strook and Lavan.

But the more work I did for Strook & Strook, the more I kept running into Altheimer & Gray – which I had never heard of, even though I had been with another Chicago firm with Mayer Brown! But I kept seeing their name everywhere. And at some point, maybe in 1993 or 1994, I was approached by one of the Altheimer & Gray partners from Chicago, who had come to hear about me, because I had already built up a pretty substantial business, mostly in Hungary, but also a little but in Romania and the Czech Republic and Poland. And he said, “why don’t you come work with us, and you can stop commuting back and forth from New York,” which is really what I was doing. “And just pick a place to be, and we will support you and do all these interesting things and we have big plans in the emerging markets.” And it took me a little while to make that decision, but, ultimately, I discussed it with my wife, and we had young children, and we thought it would be a fantastic opportunity, and we picked Prague, and that’s how I joined Altheimer & Gray. 

And I joined them really based on the strength of their reputation in Central and Eastern Europe, because it was clear that they were doing very interesting things, and very high end work, and it seemed almost to have nothing to do with what they were doing in the States. It was this great group. And then when I started to meet people, I could see why. It was still small at that stage, but the people I met were very collaborative, [and had formed a] very good partnership. There was an affection between the partners – and there weren’t so many of them – and they respected each other, and there was this sense that they weren’t trying to hog business, or credit, or any of those things. That they wanted to make a go of it. So that’s what attracted me to it.

I headed up Prague, Bratislava, and Budapest, and later on I was responsible for Bucharest too. But I started out as the head of the Prague office, and I just expanded. Prague, and even Bratislava in an embryonic form, existed when I came on board, with Petr and Alena running the day-to-day. Bratislava, as I say, was embryonic, in that we had an office manager and space and a young associate there, and it became my job to build it out and grow it. 

Obie Moore: I was the Managing Director and Executive Vice President and Country Head of the Romanian American Enterprise Fund–a US government private equity fund. Louis Goldman, David Dixon [who had been brought on board to work with Wujek in Poland] and Rob Bata came to Bucharest and recruited me in 1997 to leave the Fund and join Altheimer & Gray as Managing Partner of the Bucharest office, and that all went very well. When I opened Bucharest, I started off with one secretary, one driver, one lawyer, and no clients. (laughs).

Cooking with Gas

The late 1990s were, for Altheimer & Gray in CEE, the glory days. With offices in Warsaw, Prague, Bratislava, Kyiv, Istanbul, and Bucharest, its lawyers were everywhere, and doing well.

Louis Goldman: I would say, certainly in the first ten years, everyone was on board, [and] the leadership in Chicago was extremely supportive. If anything they were saying, “go faster.” I never had an issue with spending money or anything like that. The key was, in each office, finding a strong leader. I had Kotab and Baniyova, I had Wujek and Radzikowski. In Kyiv we had Slawa Johnson. In Istanbul we had Haluk Ozel. In Bucharest we had Obie Moore.

Obie Moore: All the CEE offices were very successful each year, and grew quickly. We reported back to Louis, as he was the head of the international practice, and he was based in Chicago. Louis made the compensation decisions. Louis was the international practice group head.

Louis Goldman: I was going outside of the country about once a month – and I did that for about 15 years. So I’ve probably been to Warsaw 100 times. I was commuting, although my wife thought I had moved there (laughs).

Jim Carroll: My practice became entirely European. I was in every office almost every month. My family remained in Chicago, so I commuted. I was in Warsaw for some of virtually every month as long as I was at Altheimer & Gray, so probably from end of 1989 through whenever it was I left – 1998 or something like that. I was on a plane back and forth all the time. I had an apartment there, which was pretty uncomfortable. I mostly stayed in the Warsaw Marriott. In the very early days the joke was, that, in Poland, if you could get a chair or a spot on one of those sofas in the lobby of the Marriott, you could practice law. That’s where it was all happening, and that’s where people went to look for people who knew what they were doing.

We were real cutting edge, all over the region. It was very exciting stuff! Most exciting work I’ve done in the law. And it was new. We were fortunate enough in most cases to retain the help of colleagues who were absolutely fabulous lawyers, and who had been unable to show just how good they were, in most instances, because there weren’t deals going on. As you well know, the legal systems that were in place had a large divorce component, and a big criminal law component of some sort, but finding a corporate lawyer was pretty challenging. There just weren’t many.

Rob Bata: I noticed that every firm of any consequence wanted to be in the emerging markets, but we kept doing better than the rest of them! I mean, we really had very few competitors in any of our markets that we rated as really substantial competitors, and that includes the Magic Circle firms, it includes some of the Wall Street firms. A lot of it had to do with the fact that we saw ourselves as a cohesive unit in Europe, and ultimately in Asia. I think there was the fact that we were really such early starters. Other than Baker & McKenzie there really weren’t a lot of players in CEE until we showed up, maybe White & Case, Weil Gotshal, some of those. And then others just fell out. For example, Fried Frank tried in Eastern Europe, and they just disappeared because they couldn’t make a go of it. Three, we were very keen to make sure that we had the best – the absolute best – local people. And we didn’t treat them like locals. We treated them like regular, global partners. And so, if you look at the Czech Republic, we had one of the best legal scholars, Petr Kotab, who was incredibly well respected, and then we had Alena Banyaiova, who was a judge; she was a very prominent lawyer, knew the ins and outs of the system, and the ins and outs of the law. In Romania, you know, Obie was sort of a semi-local himself, because he had spent a lot of time with the Romanian American Enterprise Fund, and we brought him in on the strength of that, and he was a good leader there. We just had the sense that, we weren’t going to have too many expats, we would have people who had unique skills, as expats. So there was Obie, there was me – I had so much background both in terms of culture and language, and I had an early start, so it was sort of logical. But we had the support of really great local people.

Louis Goldman: I’d say the main competitors were White & Case, Weil Gotshal, and Baker in a smaller way. And then each market had someone, like Hogan Hartson was in Warsaw ... and we also ran into a lot of the British firms. And then eventually Linklaters came in a bigger way, and Clifford Chance in a bigger way. But we were the first with a pan-European practice.

Rob Bata: We had a disproportionately high impact. And a great client base. We worked across offices, in many instances, and I just think we had a good formula – not that you could reduce that formula to a piece of paper, but … we also were quite closely integrated in terms of talking to each other on a regular basis. And once a year we had an international partners meeting, where we got together in a particular city in Europe, and planned very extensively what our business was going to look like, and what our recruiting needs were, and all these things that … people now seem to be doing a lot more. But we were doing this kind of planning and strategizing long before it became the sort of thing that is now more routine. It’s not to say that we were perfect by any means, or to say that we were the most profitable firm in Eastern Europe either! If there was one aspect of our practice in Central and Eastern Europe that did resemble Chicago a little bit – a very tiny bit – it’s that we didn’t fall prey to the idea that you had to compensate partners at such a high level that it would be deleterious to the bottom line of the firm. We did well – we all made a nice living – but.…

Jim Carroll: When I left there were about 100 Altheimer lawyers in Eastern Europe. On the whole they were absolutely terrific lawyers. I would be happy to work with any of them today. They were just first-rate. 

Rob Bata: The last office in Central and Eastern Europe was actually Budapest, when I brought the former Shearman & Sterling office on line. 

Louis Goldman: When Shearman & Sterling exited Budapest, we began to work with Ban, Szabo (due to Rob’s efforts) and then in 2000 formally made them a cooperative office. They were not partners of Altheimer & Gray or employed by us but rather we worked in an official way together and did joint marketing, branding, and projects. Rob was in charge of that office.

Adam Mycyk: One of things I always remember was the idea of opening in Moscow. It was something that they didn’t try to do early enough, I think. And when they started looking at it, it was just really expensive. And by 1996 or 1997, unless you really had clients who were guaranteeing you work to go there, or a good team you could pick up there, it just didn’t make sense. And I think that was one of the things we felt, in Ukraine, that we kind of suffered from a bit, was that we didn’t have a Moscow office. At that point, if people were coming into the region, and the former Soviet Union, a company would go to Moscow first, and then Kyiv would be the next place they looked at. So Kyiv was kind of an afterthought to Moscow. And I think the firms that had an office in Moscow had a bit of a competitive advantage because if somebody came to Russia and went to your firm, and then you had an office in Kyiv, that was an advantage.

Rob Bata: We wanted to have a Russian practice, but the thinking was that it was too big, too hard, and too expensive, and we came late to the game. Ukraine was lucky that we could jump into it when we could.

Discord and Discontent in Chicago

Unfortunately, the firm’s success in Europe – including the opening of offices in London (in 1999) and Paris (in 2002) – wasn’t enough to stop it from coming apart back in Chicago.

Jim Carroll: I signed the lease for Bucharest in 1997, and that was pretty close to my last activity at Altheimer. I left within a week or two of that. Two things were going on. One was I was living on airplanes and I had small children at home. It was time to either refocus on Chicago or move my family to Europe. The other issue was that I was very disturbed with the management in Chicago at the firm. The firm had been wonderfully supportive of allowing us to do what we wanted to do in Eastern Europe, but its own management had serious flaws. It was evolving, and it was not evolving well.

Obie Moore: We eventually did open a London office, but it was a bit too late, because we opened it just at the time problems in Chicago began appearing. The Managing Partner of London was Rob Bata, who left Prague and moved to London to run the Altheimer & Gray London office. It didn’t catch the momentum wave of growth experienced by our other offices. We had Central and Eastern Europe covered, and we felt London was the place that we needed to connect with and grow further Central and Eastern Europe. Unfortunately, that opening was about 18 months before our Chicago headquarters started to break-up.

Rob Bata: The way it worked was that we didn’t have local partners or non-local partners. Everybody was part of the global partnership. Then at some point the partnership in Chicago decided that they wanted to go to an equity/non-equity two-tiered partnership model. And that had to be around 2001 or 2, and that in many ways probably was a negative, because there were partners who felt they should have remained part of the equity. In terms of some of the negativity that began to take place which tended to be generated from the Chicago side, it had to do with that whole business of splitting the partnership into equity and non-equity. 

Jaroslawa Johnson: Unfortunately, A&G was too small to sustain an international practice. It did not have the resources in Chicago to support a far-flung office operation. By this time, the management committee in Chicago was filled with people unsympathetic to the foreign offices. Other members of the executive committee, besides Louis Goldman, were not certain of the value of A&G’s varied international practices. Most of their clients were in the same building as our Chicago office, maybe one or two floors below, and they couldn’t understand why we were always flying all over the world. They thought these were more boondoggles than investment opportunities.

The firm fell apart in 2003. They borrowed too much on revolving loan and weren’t able to collect enough revenue within the year – typical financial issues that caused many firms to fail. When I first started at the firm, Named Partners Alan Altheimer and Milton Gray were still alive, but no longer managing the firm. The next generation partners Mort Lieberman and Nathan Gold were then transitioning power to an even younger generation. This younger generation was much more aggressive and wanted to make a lot more money, so they raised their compensations to over a million dollars each which was economically untenable considering the firm’s revenue. They didn’t understand the limits of their own operation. As a result, the firm became over-extended and declared bankruptcy. While A&G was bankrupt in its domestic operations, the foreign offices were not bankrupt. They were in fact the only income-producing group at the very end.

Louis Goldman: I was probably the only person there from the beginning to the end. 

Near the end we had 200 lawyers in Chicago, and I had 165 lawyers outside the United States. I left three-four months before it closed its doors. There was beginning to be a fair amount of tension between the international side and the domestic side. I don’t want to get into the gory details, but there were a couple of issues. One was, they didn’t like the idea of the international part being almost the same size [as] the domestic piece. I was on the management. They said, “We really need to be much bigger in the US.” We had a merger initiative in that last year, but at some point I realized it was not going to happen. Late in the game they opened a small office in San Francisco, and at one point we had a tiny little convenience office in Washington, D.C., but those never went anywhere.

The King is Dead, Long Live the King

Of course, the end of Altheimer & Gray didn’t mean the end of its various offices in CEE, which quickly tied up with either Salans and Chadbourne & Parke.

Louis Goldman: What happened was, I left in the early spring of 2003, and then the people who remained in the management in the early summer decided to dissolve the firm – I believe because they had a firm they thought they could merge with, if they went through a dissolution. And at that point everyone scrambled. And I ended up taking five of these offices and 60 of these lawyers to Salans. I had known Salans for 15 years. And they were strong in Russia, and in some of the Russian Republics, and they also had a decent-sized office in Poland. And we thought it would be a good fit. At the end of the day, five of the offices went with me to Salans; two of the offices – Warsaw and Kyiv – went to Chadbourne because Salans already had offices in those two places, and it would have been too complicated to do a deal there.

Obie Moore: After the break-up, our goal was to keep together as many of our Central and East European offices as possible. The reason Altheimer & Gray lawyers ended up at Chadbourne & Parke was because when Salans acquired the Central European offices from Altheimer & Gray, the two locations with overlap were Warsaw and Kyiv. So had the combination included those cities it would have been far too large a law office for the local environment. 

Louis Goldman: A lot of people said that. I didn’t agree with that. The bigger problem was, Wujek said, “You know, they have really good lawyers; I like their people, but right now I manage this office and it does not take me much time, and if we merge the firms it will become a more complicated job, and it’s just too much trouble.”

Jaroslawa Johnson: Two of our offices – Warsaw and Kyiv – didn’t want to join to Salans. Salans had weak offices in our jurisdictions. Chadbourne provided a much better alternative. The announcement of the dissolution of Altheimer & Gray came in June 2003. By end of 2003 or the beginning of 2004, we had joined Chadbourne.

Rob Bata: I went to Salans as the person on their Executive Committee who was in charge of Central and Eastern Europe and China. I’m very fond of both of Jaroslawa and Adam, but their practice didn’t interact as much with ours. They had unique practices. And that was part of the deal with Salans. They had Russia, but they didn’t have Eastern Europe or China. I had Eastern Europe and China, so for us it was a perfect marriage. My goal, as the Central & Eastern European person who led this migration to find this next home, was to keep everyone together. Salans provided the most homes for the most people. They wanted to be in everyplace we were and would take all the offices. But in Warsaw and Kyiv, where there were overlapping offices, they went to Chadbourne & Park.

Looking Back

Looking back, the lawyers who played such key roles in making Altheimer & Gray the first truly pan-CEE law firm taking pride in their contributions to the firm, and to the region.

Louis Goldman: It was very satisfying. I think what we did was rather unique in that period. If you look at it now, everyone now has copied it. But you look at any firm – K&L Gates, Reed Smith, Paul Hastings, you can name a million firms – those firms never would have considered going to Europe, and then they all went.

Obie Moore: Looking back, what helped drive our success was that we believed in the markets, and the people, and we interacted very well with the locals. We built an inclusive and authentic culture, I suppose. It was a very good culture that we had, and our team believed in these countries, and believed in what we were doing. Even if we could have made more money elsewhere, that wasn’t the thing that fully drove us, the scoreboard took care of itself, and I was never disappointed in my individual score. We felt it was something unique that we were doing. These countries needed foreign direct investment, and foreign investment required good lawyers that knew how to do deals, and so on. It was good.

We more or less created a myth of being an international law firm (laughs). We’d say to clients, “Oh, we’re Chicago based, we’ve got all this help and know-how in Chicago, as an international law firm.” Really what we developed was a successful learning on-the-job culture in these rapidly changing Central and Eastern European countries and we embraced the transition and the people there, and developed the know-how there, and sure, there would be times when Chicago would help, particularly in Warsaw, because there were client relations there, but … for me in Bucharest … we definitely created this myth of being an international law firm. But what we really became was a very strong, dynamic, Central and Eastern European firm that was headed by American managing partners, all of whom had intensive local experience and know-how of the operating environments, and who had already worked in Warsaw, Prague, Bucharest, or Kyiv. That’s what we took advantage of. I have to say, in my now-25 years focused on and working in the region, that was my most enjoyable job, and I greatly appreciated the people that I worked with. We’d get together for partners’ meetings, or smaller get-togethers with colleagues and they were always a blast. The same dynamic just doesn’t exist anywhere else, with other firms that I know of.

Rob Bata: We were quite small, and the international offices were disproportionately better known. And I’ll give you an example, because the year that Salans and my Central and East European Group and the China office merged, Salans won East European Firm of the Year. But of course it was entirely on the strength of the Altheimer & Gray offices. In many ways it was the happiest period of my professional life. 

Jaroslawa Johnson: I was sad that A&G dissolved. We had established an excellent reputation. Business people in Ukraine and in Europe knew who we were. Other law firms respected us, and clients were pleased with A&G. It was hard to explain to people why a law firm considered by Europeans as very successful was unable to survive in the United States.

Haluk Can Ozel: Looking back to those days … initially I thought, this is a better atmosphere, as Salans had a more European approach, but then I started to consider, and leaving all those guys, and seeing A&G collapse down, was kind of sad. Watching it fall apart was not a good feeling.

Adam Mycyk: I still have sweatshirts and baseball caps in my closet. Grim reminders.

Rob Bata: And now Chadbourne has closed its Ukraine office, so all that’s left is the Polish office.

Louis Goldman: For many years we stayed in touch with each other, and saw each other regularly. We started this in 1990, so it was 25 years ago. Some people are effectively retired, some have left the big firms and moved into smaller practices, because that’s what they want to do.

It must have been disappointing when it ended. Louis Goldman: Yes, it was (sighs). 

Jaroslawa Johnson - Then: Managing Partner, Altheimer & Gray Kyiv. Now: President and Chief Executive Officer, Western NIS Enterprise Fund, Kyiv

Rob Bata - Then: Senior Resident Partner, Altheimer & Gray Prague, Bratislava, Bucharest, and Budapest. Now: Principal, WarwickPlace Legal, LLC, New York

Obie Moore - Then: Managing Partner, Altheimer & Gray Bucharest. Now: Senior Counsel, Dentons, Washington D.C.

Jim Carroll - Then: Partner, Co- chair International Practice Group, Altheimer & Gray. Now: Partner, Perkins Coie, Chicago

Adam Mycyk - Then: Associate, Altheimer & Gray Kyiv. Now: Partner, Dentons, Kyiv

Louis Goldman - Then: Co-Chairman of the Firm and Chairman of the International Practice, Altheimer & Gray. Now: Founding and Managing Partner, Navigator Law Group LLC, Chicago 

Haluk Can Ozel - Then: Managing Partner Altheimer & Gray Istanbul. Now: Managing Partner Ozel & Ozel, Istanbul

This article was originally published in Issue 3.1 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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