Hard Times for Akin Gump

By Kim Eisler--Washingtonian Magazine, Published Wednesday, March 25, 2009

For big Washington law firms, plush offices, exotic retreats, first-class flights, and a spare-no-expenses attitude are part of the image. But 897-lawyer Akin Gump has come crashing down to economic reality by canceling a long-scheduled retreat at the Hotel del Coronado in San Diego.

The resulting losses, detailed by the jilted hotel, provide a window into the private law-firm world.

Akin Gump has a 64-year history, and its headquarters in a Dupont Circle building is named for founder Robert Strauss. Back in July 2007, when times were good, Akin Gump booked 877 rooms for this year at rates up to $895 a night. The firm promised Hotel del Coronado that its lawyers and some staff would consume $166,870 worth of drinks and food and add a 22-percent tip. Partners and associates would be flown to San Diego at law-firm expense from 13 offices worldwide at a cost that could have exceeded a quarter of a million dollars.

This year’s retreat was scheduled to be held April 22 to 27. But on December 24, Akin Gump delivered a Christmas Eve message to the resort. The firm had decided to cancel the affair and forfeit its $40,000 deposit.

Not so fast, said the Coronado. It’s now claiming that by canceling so late, Akin Gump owes a late-cancellation fee of around $400,000. Akin Gump is reportedly negotiating with the hotel’s attorney, John Josefsberg of Dallas, whose practice is centered on representing hotels with group-contract issues.

Akin Gump’s decision to cancel, lawyers say, is tied to a change in management last year. The partners voted to shake up the firm’s leadership, creating a new position for New York partner Kim Koopersmith that came at the expense of Washington-based managing partner and chair Bruce McLean’s power.

The million dollars the firm planned to spend on the retreat is less than the yearly profit for each of its equity partners. Akin Gump generated $780 million in gross revenue in 2008 for its 157 equity partners. The firm’s team includes such well-known Washingtonians as former congressman Bill Paxon, former North Carolina senator Lauch Faircloth, and longtime Democratic Party power brokers Vernon Jordan and Strauss.