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CAREER COUNSELOR’S CORNER
Think Big: Law Firms on the Rise [Dimitra Kessenides] Closer Look: Growing firms in an uncertain economy. How do they do it? How much can they grow?
Boutique firms and solo practices have their
profits had jumped to $1.1 million. That’s an
growing complex dispute resolution practice.
place, but sometimes bigger is better. Take
increase in profits of -- we’ll do the math for
Meanwhile, it seems the two offices are
these eight law firms, for example -- already
you -- more than 70 percent.
getting a little cramped. The firm recently
robust, venerable practices that lately have
signed a lease for some breathing room
found themselves adding lawyers, increas-
How did the firm achieve such a don’t-bump-
-- 417,000 square feet of it -- in Washington,
ing profits, leasing more office space, and
your-head, pants-are-too-small, you-should-
D.C., which will be ready in spring 2006.
expanding into new practice areas. Anyone
try-out-for-the-basketball-team growth
care to argue that these are bad ideas? That
spurt? “Managed risk,” says managing part-
they don’t make a firm better? And what’s
ner Angelo Arcadipane, by way of explaining
intriguing -- astonishing, in fact -- about the
the firm’s white-knuckle decision to forego
growth of these firms is that they’ve man-
hourly rates on two major litigations in favor
aged to pull it off in an economic climate
of contingency fees. “We’re building a brand
that’s a tad, shall we say, unimpressive. This
in representing individual corporate clients
list isn’t based on a scientific formula, and
in cases stemming from major class actions,
it’s not meant to be all-inclusive. Instead, let
where the corporations don’t want to partici-
this selected roster stand as evidence that
pate in the class but want suits brought on
any lawyer seeking a firm that’s thriving for
their behalf.”
Web Site DUANEMORRIS.COM
the moment. You just have to know where to
The risk paid off. Profits surged and gross
When consolidation fever spread through the
look. Start here.
revenues were the highest in Dickstein
all the right reasons has plenty of options at
Shapiro’s 50-year history, landing it among
DICKSTEIN SHAPIRO MORIN & OS-
the country’s top-grossing firms for the
HINSKY, Washington, D.C.
first time. But the overnight success didn’t happen overnight. “Firms don’t make more
THE STATS Total Offices 2 Fastest Growing Office Washington Total Lawyers 2003 314 Total Lawyers 1998 239 Fall 2003 Incoming Associates 16
money just because they happen to make more money,” says Newport Beach, California-based legal consultant Peter Zeughauser. “They make more money because they hire the best lawyers, who attract the best work and the best clients. Those things feed
THE STATS Total Offices 22 Fastest Growing Office New York Total Lawyers 2003 536 Total Lawyers 1998 279 Fall 2003 Incoming Associates 12
law firm community five years ago, Duane Morris chairman Sheldon Bonovitz and his partners had only one thought: road trip! They stocked up on Cheetos, piled into the car, and set out on a cross-country odyssey, snapping up office space and adding lawyers over the next four years in Boston; New York City; Princeton, New Jersey; Wilmington, Delaware; Washington, D.C.; Bangor, Maine; Pittsburgh; Atlanta; Miami; Chicago; Houston; San Francisco; and San Diego. They
off one another.”
even hopped a flight to London. Increased
Dickstein Shapiro’s method is simple: “Be
would mean increased competitiveness and
Web Site DSMO.COM Just two years ago, Dickstein Shapiro was
focused. Don’t be faddish,” says Arcadipane.
humming along nicely -- two offices, 283
“It’s not a rocket science strategy.” For
lawyers, and per-partner profits of $651,000.
Dickstein the focus falls on five core prac-
Real good -- but not good enough, as it turns
tice areas -- energy, intellectual property,
out. By 2002 the firm had squeezed 298 law-
general litigation, corporate and finance, and
yers into those two offices, and per-partner
regulatory affairs -- and, increasingly, on a
PAGE 1
DUANE MORRIS, Philadelphia
presence in major markets, they figured, profitability. “We’ve added groups of lawyers -- anywhere from one to 12 -- and developed from a regional firm into one that has a national footprint,” Bonovitz says. (We made up the part about the Cheetos, by the way.)
continued on back
1.800. 973. 1177
CAREER COUNSELOR’S CORNER
Back at the Philly HQ, the firm’s lawyer popu-
tainment law.
lation has held steady, but the number of law-
researching, you need to be pre-researched, to know the area well enough to respond im-
yers in other offices has more than doubled in
People noticed, to say the least -- people like
mediately based on the knowledge you have,”
the past five years, to 336. Like the geographic
entertainment superlawyer Jay Cooper, a
Alvarez says. What that means, in a practical
expansion, the firm’s personnel and prac-
25-year veteran of showbiz law in Los Angeles
sense, is having many lawyers with different
tice-area growth has been spread pretty
who counts Jerry Seinfeld and Sheryl Crow
areas of expertise everywhere. “To the extent
evenly. “As we’ve grown, we’ve integrated into
among his clients. A year later, Greenberg
that you can service a client even more by
practice groups and added both lateral as-
snapped up several established entertainment
enabling its general counsel to access 10 or
sociates and younger associates in our various
lawyers in New York City. Again, Cooper took
15 areas of your firm, the client’s ability to
markets,” Bonovitz says. In fact, 2002 saw the
note. A few months after that, a Greenberg
get great service improves overall, because
firm add 35 lateral partners.
partner contacted Cooper through a mutual
the number of firms they have to work with is
friend in an effort to lure him to the firm. The
minimized.”
Of Duane Morris’s 14 practice groups, intel-
conversation was not long.
lectual property and bankruptcy are among
Essentially, what Greenberg set out to do
the fastest growing, a trend seen at other
“Here’s this big firm, and you look at it and
a decade and a half ago was to repackage
firms across the country. Bonovitz claims
wonder, ‘Why would an entertainment lawyer
itself as a major player in the national and
the expanding “platform” has attracted more
go with a big firm?’ But I knew Joel Katz, so
international legal market. Sure, the firm’s
national clients and additional work from
I had to look and see what it was all about,”
still strong in Miami (its 36-year history there
existing clients. The plan now is to fill out
Cooper says. “I looked at what they’d been do-
has contributed to the general growth of that
the offices -- and, while they’re at it, to keep
ing and who had joined, and realized this firm
area). But, as Alvarez says, “To be a national
adding new ones. (For those of you following
was serious about being a real player in the
or international player, you need to get to the
along at home, that probably means one thing:
entertainment business. They’re a force. So
size and specialization where you’ll be viewed
hiring.) “Right now we have nearly 350 lawyers
when they talk to you, they’re not just another
that way.”
in those other markets,” says Bonovitz. “In the
eastern firm that says, ‘I want to be in show
next five years we’re going to add another 500.
business.’ They’re already in. And you take
It appears that the firm is indeed being viewed
The firm will be at 1,000 lawyers by then.” Gas
them seriously.”
as a national player -- in the last few years, to
up the car.
GREENBERG TRAURIG, Miami
cite just one example, 255 alleged victims of The consolidation tactic has worked for
abuse by clergy have enlisted GT’s services in
Greenberg Traurig in other practice areas,
lawsuits against the Boston Archdiocese.
too. “It became clear to us 15 years ago that
THE STATS Total Offices 20 Fastest Growing Office No Comment Total Lawyers 2003 975 Total Lawyers 1998 360 Fall 2003 Incoming Associates 20 Web Site GTLAW.COM Five years ago, Greenberg Traurig, which had specialized in real estate, corporate, tax, and international law, acquired one of the most prominent entertainment firms in the country, Katz, Smith & Cohen. Its leader was Atlantabased partner Joel Katz, who had represented B. B. King, Willie Nelson, George Strait, and Jimmy Buffett, among others. It was, as they say in the business, a big deal. Virtually overnight, GT became a national force in enter-
PAGE 2
there was a consolidation that was taking
HAYNES AND BOONE, Dallas
place in the legal marketplace, and it was worldwide,” says firm president and CEO Cesar Alvarez. The firm seized on the trend, and what was once a three-lawyer Miami firm grew and grew and grew. The number of lawyers shot from 360 in 1998 to 750 in 2000, and today the firm is knocking on one-thousand’s door. GT’s strength is that while they’ve come very far very fast, they have strived to keep the quality of their service from declining. Clients’ demands are greater than ever these days, but most lawyers have less time on their hands. Information technology has raised expectations: When a client’s on the phone, he wants his answer then and there. “Since you don’t have the luxury of really spending a lot of time
THE STATS Total Offices 9 Fastest Growing Office Houston Total Lawyers 2003 420 Total Lawyers 1998 300 Fall 2003 Incoming Associates 51 Web Site HAYNESBOONE.COM Lately, while many firms have gone hog-wild with merging, Haynes and Boone has taken a shockingly counterintuitive path to growth: meeting its clients where they are. Revolutionary, eh? Here’s an example of its ingenuity: “When NAFTA came along [in 1994], we had a number of clients express a need for a Mexico practice,” says managing partner
continued
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CAREER COUNSELOR’S CORNER
Robert Wilson. The firm’s Mexico City office
California seems like a great place not to be a
the San Diego office, which opened its doors
opened in 1995. “Where our clients lead us is
lawyer these days. The spectacular nosedive
in 1998, has grown 41 percent just in the last
where we will go.” Brilliant!
that the state’s economy took when the tech
seven months and now employs 72 lawyers.
scene collapsed didn’t leave law firms with
And the Hong Kong office, a 28-lawyer outpost
In addition to Mexico, those clients -- who
many deals to do. From 2001 to early 2003, the
known for its IPO and real estate practices,
include Bank of America, ExxonMobil, and
casualties were staggering. Cooley Godward:
more than doubled in size in the same period.
Dell -- have led H&B clear across Texas and
100-plus layoffs. Wilson Sonsini: 100-plus lay-
all the way up to Washington, D.C. Even so, a
offs and a $55,000 decline in profits per part-
Don’t be fooled by all that success elsewhere,
regional firm with a significant national and
ner. Brobeck: some 500 lawyers left jobless.
though. Things are fine in Silicon Valley at the
international practice is still a regional firm.
Oh, and lastly, the layoffs at Heller Ehrman in
moment. Just ask Heller Ehrman.
“If we’re honest with ourselves, we can’t say
the past two years: zero.
we’re national, but we’re a wanna-be,” Wilson
LATHAM & WATKINS, Los Angeles
says. That aspiration has kept the fire burning
Yep, a big fat goose egg. Not only that, but its
under the firm as it makes the transition to
revenues, profits, and lawyers’ ranks have
the national stage. “We base our growth on
actually grown. How has Heller pulled it off?
the cold, hard stats,” says Wilson. Probably
By not putting all of its eggs -- goose or oth-
not a bad idea for a firm that can boast the
erwise -- in one basket. Namely, the basket
following cold, hard stats: From 2001 to 2002,
labeled “technology.”
gross revenues increased 8 percent to more than $180 million. Profits per partner are
“We don’t grow for growth’s sake,” says the
at $545,000. And the number of lawyers has
firm’s head of litigation, Matthew Larrabee.
risen almost 10 percent from one year ago, to
“What we ask is, ‘What size do we need to be
420. Especially impressive, considering that
to meet client demand?’ This avoids problems
H&B was launched by just a handful of attor-
with just adding numbers.” Unlike so many
neys a mere 33 years ago -- not so long in the
Bay Area and Silicon Valley law firms, Heller
life of a firm.
Ehrman never abandoned everything it knew in favor of an unnaturally tech-based practice.
Haynes and Boone’s next moves will likely be
Though a significant percentage of its busi-
to New York City and then California, accord-
ness today comes from technology clients,
ing to Wilson. Why? Because that’s where the
many of those are serviced by the venerable
clients are. “We have clients who have needs
life sciences and biotech practice, a Heller
in New York City,” he says. “They can hire a
Ehrman practice area that dates back nearly
New York law firm, but if we know their busi-
30 years.
ness and we know how they think, there’s no reason we shouldn’t be there.”
It was just at the moment when other West Coast law firms were betting their fortunes
HELLER EHRMAN WHITE & MCAU-
on technology practices, in late 1997, that
LIFFE, San Francisco
Heller’s management took a long, hard look at its capabilities and recognized they were more
THE STATS Total Offices 12 Fastest Growing Office San Diego Total Lawyers 2003 651 Total Lawyers 1998 405 Fall 2003 Incoming Associates 36 Web Site HEWM.COM
national. “We set about focusing our growth on particular practice areas -- like emerging companies, IP litigation, big-case litigation, and securities -- and we set about exporting our capabilities to the East Coast,” Larrabee says. “We wanted to take our West Coast market position and show our clients that it was national.” The Washington, D.C., office, which opened in 1995 with one lawyer, now has 50; an office sprouted in New York City in 1999;
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THE STATS Total Offices 21 Fastest Growing Office No Comment Total Lawyers 2003 1,536 Total Lawyers 1998 820 Fall 2003 Incoming Associates 112 Web Site LW.COM A decade ago, Latham & Watkins would not have appeared on this list. In fact, they wouldn’t even have been allowed to look at it. After soaring through the late 1980s, the firm was skidding. Several huge clients had fallen on hard times. The corporate practice had nearly bottomed out. There were layoffs, followed by major (and not particularly desirable) changes to the compensation structure for everyone, partners included. Since that nadir, Latham has staged one hell of a comeback. In the past 10 years the firm has tripled its ranks to more than 1,500 lawyers. And it is now a major force on the global legal stage, making its way across Europe and Asia with a fierce determination. Nearly 300 of the firm’s lawyers are based in one of its seven European offices, and another 33 work in Asia, where Latham has outposts in Singapore, Hong Kong, and Tokyo. And the firm is making boatloads of money: Profits per partner in 2002 reached $1.14 million. In the most recent Vault ranking of the country’s top 100 law firms, Latham was the only non-East Coast firm among the 10 most
continued on back
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CAREER COUNSELOR’S CORNER
prestigious firms. Consultant Peter Zeughaus-
and Dusseldorf handle corporate matters,
states start to look pretty good -- stable,
er sees the growth continuing unabated. “It’ll
cross-border financings, tax issues, labor and
steady, solid. “Here in the Midwest, we don’t
go to 2,000 [lawyers] easy -- very easy -- in
benefits, and intellectual property cases. The
hit the high peaks of Silicon Valley, but we
the next five years,” he says. “And that size
European work accounts for an ever-increas-
don’t have the troughs either,” says Brian
doesn’t hurt the quality of the work [they do]
ing percentage of the firm’s annual revenue,
Gardner, co-managing partner of Stinson Mor-
or Latham’s reputation. The reputation the
and McDermott expects to grow its European
rison Hecker, the Kansas City-based result of
firm has is that it’s getting an increasingly
presence this year with at least one more
a recent merger between Morrison & Hecker
large share of the most interesting work -- the
office (the exact location of which remains top
and Stinson, Mag & Fizzell.
best, most challenging work. If you really want
secret).
to get into the major deals, it’s firms of this
The Midwest has of late been kind to the law
scale and quality that are getting more and
The build-out in Europe has been the most
firms that call it home. Stinson Morrison
more of the premium work.”
visible and most concentrated area of growth
-- 340 strong after drawing lawyers in roughly
for McDermott lately, but new offices State-
equal numbers from both firms -- is sitting
side have contributed good old American
particularly pretty, with offices in Wichita,
dollars to the firm’s coffers. The firm opened
Kansas; St. Louis; Kansas City; Overland
a three-lawyer office in San Diego this year,
Park, Kansas; Jefferson City, Missouri; and
for example, which is busy with intellectual
Omaha, Nebraska. Many a merger has been
property work in the still-hot biotech sec-
carried out with much fuzzy talk about synergy
tor (McDermott has expertise in health law,
but little forethought about actually working
private liability, and FDA regulation). The
together. Not so Stinson. “I think the cultures
three-lawyer office was added as part of the
were nearly identical, if not completely so,”
firm’s growing life sciences practice, one that
says Gardner. “There was the same quality of
Ezickson places squarely in the “expanding”
work and approach to client service. What we
category for the coming year. The IP lawyers
both needed was to convey to larger compa-
MCDERMOTT, WILL & EMERY, Chicago THE STATS Total Offices 12 Fastest Growing Office London Total Lawyers 2003 933 Total Lawyers 1998 800 Fall 2003 Incoming Associates 31 Web Site MWE.COM Back in January 2002, McDermott, Will &
have been in a frenzy handling the develop-
nies that we had more depth in all the areas
Emery participated in a growing trend when
ment of intellectual property for companies
that we practiced in.” Those include corporate
it opened a small office in Europe. Munich, to
and institutions and protecting the rights to
finance, the business transactional group, a
be precise. The office had only five lawyers
that property. The firm issued 371 trademark
large employment practice, a strong general
-- just enough to maintain a presence. But for
registrations in 2002, an increase of 44 per-
commercial litigation practice, a growing
a firm like McDermott, which is accustomed to
cent over the previous year.
environmental group, and a hefty bankruptcy
being the resident juggernaut no matter what
practice.
continent it’s on -- the firm’s gross revenue
STINSON MORRISON HECKER, Kansas
in 2002 increased 12 percent to $628 million,
City, Missouri
landing it among the top 10 highest grossing firms in the United States -- a mere presence doesn’t cut it. In the 20 months since being established, the Munich office has quadrupled in size.
merger to admire by confining future growth
THE STATS Total Offices 8 Fastest Growing Office St. Louis Total Lawyers 2003 340
The push into European markets by U.S. firms
Total Lawyers 1998 274 (Combined)
has intensified in the last five years, thanks
Fall 2003 Incoming Associates 14
to EU competition and antitrust regulations,
Web Site STINSON.COM
trade issues, European biotech and pharmaceutical clients, and corporate work on
New Yorkers and Californians like to kid about
cross-border and cross-Atlantic deals. “The
the middle of the country, calling it Flyover
focus in Europe [for us] has been to build the
Land -- what you fly over en route from one
same full-service capability as [we have in the
coast to the other. But spend a little time in
United States],” says partner Doron Ezick-
market-addled Manhattan these days, or in
son. McDermott lawyers in London, Munich,
tech-ravaged California, and the in-between
PAGE 4
The firm plans to maintain its status as a mainly to the cities where it already has offices. “That doesn’t rule out the possibility of expanding into a different market,” says Gardner. “I would say we’re a Midwestern firm with a national reach. We’ll continue to grow, but we’ll be measured in that growth. There’s a lot of room for growth right in our own markets, with existing clients.” Stable. Steady. Solid.