John L. Kraft, one of the most widely known names in New Jersey bond counsel circles, has announced his intention to leave the firm he founded, Kraft & McManimon, because of disagreements over his future role there.
Kraft & McManimon, which will now be called McManimon & Scotland, is the top-ranked bond counsel firm in New Jersey so far this year, handling 75 issues and $1.4 billion of state in the first three quarters, according to Securities Data Co. The firm ranks 34 nationwide.
"We have been undergoing a series of discussions about the future of the firm, and I was not in agreement with the way the other partners wanted to organize the management and direction of the firm," Kraft said yesterday.
In particular, other partners wanted him dropped from the firm's three-member management committee. "But I felt I had too much invested in the firm and too much to offer" to withdraw from the committee, Kraft said. He added that changes in the firm's compensation structure were not an issue in his decision.
Kraft said he submitted a letter of his intention to step down as of Dec. 31, the earliest date he could resign under the firm's rules of operation. But he said he may leave earlier if an agreement can be reached with the other partners.
He said he is not able to say where he will go next, because his plans are not yet finalized, but he is not considering retiring.
"I plan to continue as an active practitioner in public finance law," Kraft said. "I'm not retiring."
As with any such rift, some client defections are expected. But Kraft said it would be inappropriate to speculate which clients would follow him to a new operation.
"When any partner leaves a law firm, clients have the total freedom to utilize any attorney they wish," Kraft said.
Over the past three years, the state of New Jersey has been Kraft & McManimon's biggest client, sliding bond issues totaling $766 million the firm's way since 1989. The Mercer County Improvement Authority is the firm's second biggest client for the period, with 11 issues and $392 million in volume.
Other major clients include the Hudson County Improvement Authority and the Bergen County Utilities Authority.
After Kraft's departure, McManimon & Scotland will have eight general partners, four limited partners, and 12 associates. In 1987, 10 partners split with the firm to form St. John, Oberdorf, Williams, Edington & Curtin.
Edward McManimon, the firm's other name partner, said yesterday he was not surprised by the development, but he feels Kraft "misreads the changes that are occurring" at the firm.
"There's a time in every business where there's a need to change the dynamics of the business," McManimon said. "Jack just wants to move in a different direction."
Although he has disagreed with several partners on the direction of the firm, Kraft said his personal friendship with McManimon will continue.
"I have a tremendous amount of respect for Ed and I think that our friendship will continue," Kraft said. "There are, of course, other partners in the firm who don't see eye to eye with me on personal or professional basis."
McManimon said he too wishes Kraft well, adding, "Jack has had a profound influence on public finance in New Jersey and we've been associated with that."
Glenn Scotland, the firm's new name partner, was not available for comment yesterday.