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"Reed Smith has already assembled one of the largest insurance recovery practice groups of any firm in the world today. But we have no intention of stopping there," he added. "By the time we're done, we're going to be the premier insurance recovery practice around the globe."

What better opportunity "to conduct what I hope is one of the largest insurance recovery practices that any individual has," he said.

The last few weeks have been a wild ride for him and the dozens of other Anderson Kill & Olick PC attorneys who up and left for Reed Smith LLC. The move was made after merger talks between the two firms--the latter a top-15 global presence and the former a boutique--fell through: partially fell through.

Nearly a third of the New York-based Anderson Kill's shareholders decided to still make the move, including Jeffrey L. Glatzer, former president and CEO; Lawrence Kill, former partner and co-chair of the Antitrust/Unfair Competition Group; and James M. Davis, former Chicago office managing partner and member of the insurance recovery group. For most, the move was effective Feb. 1.

Ellison had been managing partner for Anderson Kill's Philadelphia office. He will now serve as partner in Reed Smith's Insurance Recovery Practice Group, unofficially heading up the East Coast practice with colleagues in New York and Washington, D.C.

"One of the benefits for me is I'm going to focus full-time on practicing law," said Ellison.

The exodus has been touted from both sides as amicable. Yet fault lines are apparent between the lines of the press releases and in the way that, at the time of this writing, neither Anderson Kill nor Reed Smith could agree on the total number of staff moving. Robert Horkovich, executive committee member and still chair of Anderson Kill's insurance recovery group, reported he had 44 resignations, while Reed Smith cited 55.

Anderson Kill's official headline for the event was: "Anderson Kill to Focus On Core Practices"--its primary practice being insurance recovery. Back in June, a legal publisher named it along with three others as a leading national firm for insurance disputes.

The firm has no intention of losing this reputation, said Horkovich. He still heads 60 attorneys representing policyholders "zealously" going after insurers.

It's this attitude that's brought Horkovich's team recognition, but it also in part explains the split.

"You're literally going after the insurance industry," Horkovich said of his group's work. "(Reed Smith's) representation of the insurance industry ... creates a platform that we're really unable to service our clients from."

Horkovich said Anderson Kill staff who stayed behind were uncomfortable with the possibility of direct conflicts of interest, say, if they had a case against an insurer that Reed Smith also had as a corporate client. But they were also worried about indirect conflicts, whereby any insurance client of Reed Smith might put pressure on the firm to call off the dogs on any dispute that threatened industry interests.

"There could be a case where one carrier isn't part of the case, but if they were a major client of the firm, they would still oppose establishing a principle that could hurt them down the road," he explained.

The counter to this argument from Reed Smith came quick. Doug Cameron, head of Reed Smith's Insurance Recovery Practice Group, said that historically the firm has worked in non-insurance recovery areas, and still does represent insurers, but primarily in the life and annuity area. Commercial insurance recovery disputes typically involve policyholders against P/C carriers.

"That's how we have been able to navigate and work through both of those types of practices," Cameron said. "We have not seen that as a conflict."

When prodded further, Cameron added that Reed Smith also represents shipping club mutuals in London, and is retained by insurers to represent their insureds in professional liability claims.

He stressed that only positives for corporate policyholders can come out of Ellison and the other Anderson Kill émigrés coming to his practice group. "This growth has given us the expanded expertise and depth in all types of insurance company recoveries," he said.

And as for the indirect "issue conflict" that Horkovich had mentioned: "Theoretically, is that a possibly? I guess so. I have never experienced that. I have heard people say that that's a possibility," said Ellison. "I certainly don't think that any of those lawyers would sacrifice the interests of their clients."

Perhaps an indication of whether or not the conflict of interest issue affects policyholders is to gauge what the policyholders think--by their feet.

"A lot of the clients that they were representing have decided to stay with Anderson Kill," said Horkovich of his former colleagues, adding that you'd have to go client to client to determine just how many remain with Anderson Kill.

Ellison said a client caught in the middle of the breakup "has the decision to stay, to go, or say, 'A pox on both of your houses, I'm going somewhere else.' "

But for him, nearly all of his clients--30 to 40--are following him, including Conoco Philips, the San Francisco 49ers football team, Diebold Inc., the Roman Catholic Diocese of Greensburg in southwestern Pennsylvania, and those clients he's representing in the Katrina Canal Breach Consolidated Litigation.

Still, he doesn't gloat. It was a tough decision to leave a firm where he'd endeavored for more than 15 years and whose founding partner, Gene Anderson, is one of his heroes. He doesn't begrudge those who stayed behind.

"It's a very personal decision, and I don't think there's a right or wrong answer," Ellison said.

MATTHEW BRODSKY is Web editor/senior editor of Risk & Insurance®.

(Read the rest of the first February People on the Move newsletter.)

February 13, 2008

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