In a sign of the growing importance of the practice area, two of the city's largest firms are headed by nationally recognized white-collar experts. Former FBI Director Louis Freeh is chair of Pepper Hamilton L.L.P. and Andrew J. Levander is chairman of Dechert L.L.P. Levander, a former assistant U.S. attorney, has as clients former New Jersey governor and investment manager Jon S. Corzine and John Thain, former CEO of Merrill Lynch.
The Commodity Futures Trading Commission has charged Corzine civilly in the collapse of his former firm, MF Global. Thain was forced out after the company's merger with Bank of America amid allegations the firm had concealed billions in mortgage-lending losses.
To promote its white-collar practice, Dechert recently began showing a corporate training film to potential clients that depicts the travails of a multinational company whose share price crashed after employees were charged with bribery in a foreign jurisdiction.
The takeaway: This is what can happen without good white-collar legal advice.
"I would say that the impact of the [economic] crisis has been that compliance and enforcement work has just increased exponentially," said Andrew Kassner, executive partner of Center City's Drinker Biddle & Reath L.L.P., a 650-lawyer firm with a large white-collar practice. "No one views this kind of work as commodity work, and you are responding oftentimes to sensitive regulatory actions, when the government decides it wants to investigate and take enforcement action and the client needs a lawyer who has done this before."
Eric Breslin, a partner at 700-lawyer Duane Morris, which has a white-collar practice comprising 59 lawyers, said traditional corporate firms once referred these cases to smaller firms that did nothing else. Breslin, whose clients include a former employee of Bernard Madoff, says many of those big corporate firms have brought the work inside, a sign of its importance to clients.
For many big companies, the regulatory climate has become increasingly hazardous. When she took over as head of the Securities and Exchange Commission this year, former federal prosecutor Mary Jo White announced that the SEC would no longer settle enforcement actions without some admission of responsibility by corporate wrongdoers. She has pushed her staff to take a tougher stance overall.
"The SEC is trying to demonstrate strong regulation and enforcement for its deterrent effects," said Ronald Sarachan, cochair of Drinker Biddle's white-collar and internal investigations team, which includes 14 partners and a number of associates. "They are seeking and they are bringing very high-profile insider-trading cases and a number of other enforcement actions."
White-collar defense can cover a broad range of legal problems, from criminal prosecutions of individual executives to civil enforcement actions by the SEC and internal investigations for companies or institutions that learn of wrongdoing by employees.
They also tend to be labor-intensive, because of the potential for conflicts that can emerge when a company and its individual executives are targets. Such cases might require the services of one firm for the company and multiple additional firms for its executives.
The need to avoid conflicts in sprawling government investigations has been a reliable source of work for Philadelphia's Saul Ewing, said the firm's white-collar practice chair, Christopher Hall. A former assistant U.S. attorney, he regularly gets referrals from firms representing big companies that are the targets of enforcement actions and whose executives and other employees need their own lawyers.
The 250-lawyer firm handles a wide range of matters, from health-care related investigations to whistle-blower investigations and advising firms on how to protect themselves from prosecution under the Foreign Corrupt Practices Act, which seeks to hold U.S. companies accountable for illegal business activities overseas.
Hall said the practice has been very busy this year. He attributed that to ongoing efforts by the government to curb corporate misconduct.
"I think it is partly a hangover from the collapse of the markets in 2008," Hall said. "The U.S. attorneys' offices are still keenly aware that the public feels aggrieved . . . and wants accountability."