Matthew Larrabee, Heller Ehrman chairman
Jason Doiy/The Recorder
In a way, there's no longer any such thing as a big San Francisco law firm.
When Heller Ehrman Chairman Matthew Larrabee moves to New York City this month, none of the Am Law 100 firms rooted in San Francisco will be able to boast having both the firm chairman and the firm's largest office here. Morrison & Foerster sent its chairman to New York a few years ago, Pillsbury Winthrop Shaw Pittman's is in Los Angeles, and the leaders of Orrick, Herrington & Sutcliffe and Thelen Reid Brown Raysman & Steiner split time between S.F. and their bigger NYC offices.
For Heller, Larrabee said, the relocation is about bringing balance to the firm, which is looking to build its national practice.
"If you look at the whole firm, we are still weighted more to the West Coast and less to the East Coast than our strategy calls for," he said.
Chairmen at California firms say a significant New York office is necessary to compete in national and international legal markets -- though that doesn't mean you have to base your chairman in Manhattan.
"I don't know that it's important to have a chairman in New York," said Paul, Hastings, Janofsky & Walker Chairman Seth Zachary, who had been based there since joining the firm in 1986. "We don't focus a lot on geography in a leadership position, generally."
A firm struggling with its strategy may turn to a big-growth market such as New York to say "we're making a major shift in our thinking," said Larry Sonsini, chairman of Silicon Valley-based Wilson Sonsini Goodrich & Rosati. A move, he added, would make sense for a firm with a chairman more involved in day-to-day operations, including recruiting.
"It certainly makes it easier to spend time in the community with clients and in community organizations and recruiting talent," said consultant Peter Zeughauser of the Zeughauser Group.
HELLER'S MOVE
His New York move was a pretty straightforward decision, Larrabee said. "It's a plus for us strategically," he explained. "We've been focused on building out a truly national platform. That means growth in New York and D.C. for us right now."
The firm, he said, plans to expand the New York office to be as large as, or larger than, the firm's other offices. As of June 1, San Francisco was the firm's largest office, with 150 lawyers, and New York came in second with 81.
While the decision to relocate was made in mid-2007 following discussions among senior leadership and other Heller partners, it comes at a difficult time for the firm, which has lost more than 20 partners this year, including a number of practice heads, mostly in California.
Heller has also been the subject of various merger rumors. Most recently, Larrabee acknowledged to TheLawyer.com that, at a partner retreat, it was said that a merger may be a tactic in the firm's strategic plans.
While Larrabee expects to spend a little more time in New York and a little less in San Francisco, the frequency of his visits to other offices shouldn't change much, he said. "I don't think most people in our firm are going to perceive a dramatic difference in terms of how often they see me," he said. "Externally, internally, visibility-wise, it's positive."
IF YOU CAN MAKE IT THERE ...
Just over two years ago, Morrison & Foerster Chairman Keith Wetmore relocated from San Francisco to New York. In that time, MoFo's New York office has grown from about 140 lawyers to about 225, he said.
"I have found that there have been lateral partner recruiting opportunities that would have not come our way but for my presence in the market," Wetmore said. While he doesn't take full credit for the New York growth, he said being there helped the firm focus on the critical market. "A California-only strategy is extremely limiting, as important as California is," he said.
Whether by design or not, many Am Law 100 firms have outgrown the cities they once called home, making it hard to say where they are "based."
When L.A. partner James Rishwain Jr. became chairman of San Francisco's Pillsbury Winthrop Shaw Pittman, he stayed in Los Angeles. But the firm's biggest office is in Washington, D.C., and Rishwain agreed that New York is vital to an international firm.
"New York is going to be at the top of the [revenue] list, and London's going to be there as well," he said.
Another firm that places a high value on New York but hasn't put its leader there is Latham & Watkins, whose chairman, Robert Dell, runs the L.A. firm from San Francisco. Latham's largest office is in New York, but Dell said a focus on the Big Apple depends on a firm's key practices. A big Manhattan office isn't as necessary, he said, for firms whose strengths are environmental or regulatory practices. "There is demand for those kinds of services in New York, but oftentimes the concentration is in D.C.," he said.
HELL OF A COMMUTE
The chairmen of the largest homegrown San Francisco firms who still live in California spend a lot of time in New York. Rishwain, Thelen Co-Chairman Stephen O'Neal and Orrick Chairman Ralph Baxter Jr. spend about a week each month in New York -- and O'Neal's other half, Julian Millstein, is based there.
"It's all about the business," said Baxter, who keeps an apartment in New York. "I'm not visiting New York; it's part of what I do."
The New York office has been Orrick's biggest for about a decade, and will celebrate its 25th anniversary next year, he added.
Baxter and Rishwain have thought about relocating to New York, but decided a move was unnecessary. Latham's Dell and Sheppard, Mullin, Richter & Hampton's Chairman Guy Halgren both said they've never considered moving.
"It doesn't matter, so long as you're willing to travel where you're needed," Dell said.
While the growing importance of New York among the biggest firms in San Francisco and statewide could suggest that California's importance in the legal market is being eclipsed, firm leaders and consultants say the opposite is true.
"It's a testimony to the strength of the homegrown firms that they're competitive in New York," Zeughauser said.
"I think California firms have been extraordinarily successful in exporting ourselves and transforming ourselves into national competitors," Wetmore said, noting the only other legal market able to do so besides New York has been Chicago.
"It's really a tribute to the strength of the California economy as well as the strong California-Asia links," he said.
Baxter looks at the U.S. market as consisting of New York, Washington and then a series of regional markets, the most important of which is the Bay Area. While California firms may flex their muscle back east, Zeughauser warned that there are pitfalls, including that New York's sky-high billing rates can drive some clients away. The hypercompetitive and expensive market there means shifting focus to that city can be risky, too, leaving "plenty of opportunity for failure," he said.
"You can't be all things to all people, and that includes in New York," he said.
