L-R Andy Liu and Robert Nichols, Nichols Liu.
L-R Andy Liu and Robert Nichols, Nichols Liu. (Handout Photo)

Robert Nichols may have walked away from a big legal industry name when he left Covington & Burling last year, but he was careful not to leave too much else behind.

The government contracts lawyer—who debuted his new firm, Nichols Liu, earlier this week—said he took his entire client roster and a “decent” book of business with him when he departed Covington in November. He’s spent the months since assembling a group of lawyers and planning an internal firm management structure specific to his venture.

“It’s taken a while to get around to launching, mostly because we’ve been so busy with client matters,” Nichols said.

Including Nichols and name partner Andy Liu, a former federal prosecutor who was most recently general counsel of the Social Security Administration, the firm has six partners, one nonlawyer former diplomat, a special counsel investigator and a staff attorney. Its website touts how the lawyers “left senior positions at leading large firms, contractors and agencies to create something new.”

Earlier in their careers, both Liu and Nichols were partners at Crowell & Moring. Other Nichols Liu partners are:

 •   Steven Shaw, who moved from Covington where he was senior of counsel. Previously he was a partner at Weil, Gotshal & Manges, then at Howrey, and served as deputy general counsel of the Air Force for 15 years.

 •   Derek Gilman, who was a general counsel at an agency within the Department of Defense and then at a contractor.

 •   Natalie Thingelstad, who was compliance counsel at U.S. AID and then at Save the Children.

 •   Craig Crotteau, who worked for the Army Corps of Engineers, is a senior adviser at lobbying group Dawson & Associates and lobbies Congress on Department of Defense appropriations.

Ambassador Robin Raphel is a senior adviser at the firm. She served as assistant secretary of state for South Asia and ambassador to Tunisia during the Clinton administration and then worked as a top State Department official on matters involving Iraq, Afghanistan and Pakistan under Presidents George W. Bush and Barack Obama. She was investigated for espionage but was cleared last March by the Justice Department.

Nichols and Liu designed their firm with the help of Gail Steinel, a former Arthur Andersen and BearingPoint executive and consultant. Nichols, Liu and Steinel now manage the firm and have focused on offering lower billing rates and alternative fee arrangements than larger competitors.

Clients of large law firms often face hourly billing rates of more than $1,000 for a partner, reflecting the high overhead costs in Big Law, Nichols and Liu said.

The firm leaders predicted that more than half of their revenue will come from alternative fee arrangements such as contingency or success fees and flat rates.

Nichols noted that D.C. allows nonlawyers to hold law firm equity, but he declined to say whether nonlawyer firm members such as Raphel would have an ownership stake.

The firm’s special counsel, Annie Kim, will serve a largely investigative function at the firm. For instance, she travels to Jordan and Turkey to conduct interviews and reach out to foreign government ministries amid investigations.

Besides investigations, Nichols Liu will offer suspension and debarment legal services and handle bid protests. One Nichols client at the new firm is Concourse Group, which also uses attorneys still at Covington. The company lost its protest of a $26 million Army contract in January. Nichols said they have filed another challenge for the client in the U.S. Court of Federal Claims.

He declined to name other clients.

Making a Move

Single-practice boutique ventures such asNichols Liu have enticed several Big Law partners to leave their groups of late. New boutiques in the D.C. area include appellate shops Ganzfried, McBee Moore Woodward & Wanik IP and Wilkinson Walsh + Eskovitz, while several more have sprung out of Pennsylvania and New Jersey practices.

Nichols says his decision to leave Covington was far from abrupt.

“My intent all along was to build it out over the course of five years and then move on, and that’s what we agreed to from the beginning,” he said. “It came together much faster than we anticipated.”

He joined Covington in 2012 from Crowell & Moring and became a co-chair of the government contracts group, which grew to 20 lawyers in two years. In 2015, the practice made a major change when it hired five partners and 14 other lawyers from McKenna, Long & Aldridge, which was merging with Dentons. While Nichols said he saw the additions as a great opportunity, “it created more conflicts, and that took its toll.”

Government contracts lawyers at Covington either didn’t respond to requests for comment or declined to comment.

“We have very good relations, and we have several ongoing matters right now,” Nichols said of his former colleagues at the firm.

Copyright National Law Journal. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Robert Nichols may have walked away from a big legal industry name when he left Covington & Burling last year, but he was careful not to leave too much else behind.

The government contracts lawyer—who debuted his new firm, Nichols Liu, earlier this week—said he took his entire client roster and a “decent” book of business with him when he departed Covington in November. He’s spent the months since assembling a group of lawyers and planning an internal firm management structure specific to his venture.

“It’s taken a while to get around to launching, mostly because we’ve been so busy with client matters,” Nichols said.

Including Nichols and name partner Andy Liu, a former federal prosecutor who was most recently general counsel of the Social Security Administration, the firm has six partners, one nonlawyer former diplomat, a special counsel investigator and a staff attorney. Its website touts how the lawyers “left senior positions at leading large firms, contractors and agencies to create something new.”

Earlier in their careers, both Liu and Nichols were partners at Crowell & Moring . Other Nichols Liu partners are:

 •   Steven Shaw, who moved from Covington where he was senior of counsel. Previously he was a partner at Weil, Gotshal & Manges , then at Howrey, and served as deputy general counsel of the Air Force for 15 years.

 •   Derek Gilman, who was a general counsel at an agency within the Department of Defense and then at a contractor.

 •   Natalie Thingelstad, who was compliance counsel at U.S. AID and then at Save the Children.

 •   Craig Crotteau, who worked for the Army Corps of Engineers, is a senior adviser at lobbying group Dawson & Associates and lobbies Congress on Department of Defense appropriations.

Ambassador Robin Raphel is a senior adviser at the firm. She served as assistant secretary of state for South Asia and ambassador to Tunisia during the Clinton administration and then worked as a top State Department official on matters involving Iraq, Afghanistan and Pakistan under Presidents George W. Bush and Barack Obama. She was investigated for espionage but was cleared last March by the Justice Department.

Nichols and Liu designed their firm with the help of Gail Steinel, a former Arthur Andersen and BearingPoint executive and consultant. Nichols, Liu and Steinel now manage the firm and have focused on offering lower billing rates and alternative fee arrangements than larger competitors.

Clients of large law firms often face hourly billing rates of more than $1,000 for a partner, reflecting the high overhead costs in Big Law, Nichols and Liu said.

The firm leaders predicted that more than half of their revenue will come from alternative fee arrangements such as contingency or success fees and flat rates.

Nichols noted that D.C. allows nonlawyers to hold law firm equity, but he declined to say whether nonlawyer firm members such as Raphel would have an ownership stake.

The firm’s special counsel, Annie Kim, will serve a largely investigative function at the firm. For instance, she travels to Jordan and Turkey to conduct interviews and reach out to foreign government ministries amid investigations.

Besides investigations, Nichols Liu will offer suspension and debarment legal services and handle bid protests. One Nichols client at the new firm is Concourse Group, which also uses attorneys still at Covington. The company lost its protest of a $26 million Army contract in January. Nichols said they have filed another challenge for the client in the U.S. Court of Federal Claims.

He declined to name other clients.

Making a Move

Single-practice boutique ventures such asNichols Liu have enticed several Big Law partners to leave their groups of late. New boutiques in the D.C. area include appellate shops Ganzfried, McBee Moore Woodward & Wanik IP and Wilkinson Walsh + Eskovitz, while several more have sprung out of Pennsylvania and New Jersey practices.

Nichols says his decision to leave Covington was far from abrupt.

“My intent all along was to build it out over the course of five years and then move on, and that’s what we agreed to from the beginning,” he said. “It came together much faster than we anticipated.”

He joined Covington in 2012 from Crowell & Moring and became a co-chair of the government contracts group, which grew to 20 lawyers in two years. In 2015, the practice made a major change when it hired five partners and 14 other lawyers from McKenna, Long & Aldridge , which was merging with Dentons . While Nichols said he saw the additions as a great opportunity, “it created more conflicts, and that took its toll.”

Government contracts lawyers at Covington either didn’t respond to requests for comment or declined to comment.

“We have very good relations, and we have several ongoing matters right now,” Nichols said of his former colleagues at the firm.

Copyright National Law Journal. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.