The New York Times
By Peter Lattman
August 28, 2012
Pepper Hamilton, the corporate law firm, has acquired the investigative group and legal practice run by Louis J. Freeh, the former director of the Federal Bureau of Investigation.
The deal, announced on Tuesday, highlights the growing business of investigations into possible wrongdoing at companies and other institutions, an increasingly lucrative area for law firms.
Scandal has been big business for Mr. Freeh. Over the last year, he has served as trustee for creditors of MF Global, the failed brokerage firm, conducted the internal inquiry of a sex-abuse scandal at Penn State and examined an SAT cheating scandal.
His investigative arm, Freeh Group International Solutions, will become a wholly owned subsidiary of Pepper but will retain its name and operate independent of the law firm.
The lawyers at his law firm, Freeh Sporkin & Sullivan, will join Pepper’s white-collar criminal defense practice. In all, about 25 professionals will be joining Pepper.
Financial terms of the transaction were not disclosed.
With a seemingly steady stream of white-collar skulduggery, internal investigations and corporate enforcement have become areas of focus at the country’s biggest law firms. Typically, the firms will hire investigative companies like Kroll, Guidepost Solutions and K2 Intelligence that work alongside them on their assignments. Pepper’s acquisition of Freeh’s firm is among the first instances of a law firm acquiring one of these groups outright.
Mr. Freeh, who is based in Wilmington, Del., has worked closely with lawyers at Pepper, which has its headquarters in Philadelphia. Joint matters include the MF Global case and the Penn State report.
In an interview, Mr. Freeh said that as his business had grown, especially internationally, it made sense to combine with a big law firm that had the resources to handle his expanding portfolio of cases. He said the deal would allow them to meld their team of investigative specialists, which include former F.B.I. agents and forensic accountants, with Pepper’s lawyers.
“To integrate the two groups is very exciting and very different,” Mr. Freeh said.
Among the international assignments currently being handled by Mr. Freeh, with the assistance of Pepper’s lawyers, is overseeing compliance at the automaker Daimler, which has agreed to a corporate monitor after settling with the Justice Department over allegations that it violated federal antibribery laws. Mr. Freeh also does investigative work for Wynn Resorts across the globe.
Pepper Hamilton, with 500 lawyers, is an old-line Philadelphia firm, founded in 1890. Though it has a broad-based practice, the firm is perhaps best known for its representation of large pharmaceutical and medical device companies like Eli Lilly, GlaxoSmithKline and Medtronic.
In recent decades, like many regional firms, Pepper has pushed into new practice areas and regions. It recently brought in Scott Green, a nonlawyer with a Harvard M.B.A., as its first chief executive. He is running the firm’s operations alongside Nina M. Gussack, the chairwoman of the firm’s executive committee.
Mr. Freeh, 62, has had a varied career. In his early years he pursued organized-crime cases as an F.B.I. agent and later a federal prosecutor. In 1991, President George H. W. Bush appointed him a federal judge in Manhattan. He left the bench two years later when President Bill Clinton named him director of the F.B.I. He served in that post until 2001, and became general counsel of the credit card company MBNA before starting his legal and investigative business.