LOS ANGELES — At least eight law firms have opened offices in the Los Angeles area since the start of the current economic downturn about eight months ago — more than in any other major metropolitan region in the nation.
To do so, many firms, such as Snell & Wilmer, Atlanta’s Alston & Bird, Philadelphia’s Blank Rome and Lathrop & Gage of Kansas City, Mo., took the opportunity to snag lawyers who recently became available, largely due to dissolutions and economic conditions.
Although their reasons for coming to Los Angeles differ, several lawyers at the incoming firms said that existing clients necessitated opening an office. Some, such as Dallas-based Haynes and Boone and Brooks Kushman, a boutique in Southfield, Mich., identified a specific demand for intellectual property, while others pointed to commercial litigation.
Two small firms, Atlanta’s Constangy, Brooks & Smith and Washington’s Gilbert Oshinsky, opened offices focused on practice areas relatively immune to the current recession: insurance coverage and labor and employment.
For most, the Los Angeles office is their first foray into California — a region that, according to Ward Bower, a principal at legal consulting firm Altman Weil, is required in order to build a national platform.
“This is the opportunity to get into California for some who have been trying for while and haven’t been successful,” Bower said. And, he said, “there’s a sense there’s more continuing demand for legal services in Southern California than in San Francisco right now.”
For many firms, the opportunity to seize available lawyers prompted them to open an office in Los Angeles.
The sudden implosion of Dreier Stein Kahan Browne Woods George, which was the Santa Monica, Calif., affiliate of Dreier LLP, shoved about 75 Los Angeles attorneys into the job market. Dreier LLP filed for Chapter 11 bankruptcy protection on Dec. 16 after its founder and managing partner, Marc Dreier, was charged with concocting an investment scheme worth hundreds of millions of dollars.
Two of the five new partners who joined Blank Rome this month to open its first California office in Los Angeles, Lawrence Hinkle and Andrew Kim, came from the Dreier affiliate.
Blank Rome had been in search of a merger partner in the region for the past three years, said the firm’s co-chairman, Alan J. Hoffman. The firm has about 200 clients in California, most of them based in the Los Angeles area, as well as national companies with significant litigation in Los Angeles, he said.
But the firm hadn’t yet found the right candidates.
“We were talking to a number of different laterals, and we met Andy Kim and Lawrence Hinkle along the way, and liked them,” he said. Kim and Hinkle, both litigators, represent actors, writers, apparel manufacturers and gaming companies — a new area for the firm that “came with the lawyers we brought in,” Hoffman said.
The Dreier affiliate also provided the seven lawyers who joined Snell & Wilmer to open the firm’s Los Angeles office last month.
Barry Halpern, a partner in the Phoenix office of Snell & Wilmer who was in charge of opening the Los Angeles office, said Los Angeles was at the top of the list when the firm established a committee in late 2008 to assess its expansion plans. He said Los Angeles has connections to international markets, such as Asia, and complements the firm’s litigation and intellectual property work in nearby Orange County, where the firm has an office in Costa Mesa, Calif.
“We just did not find a combination that seemed to us to be appropriate at the time,” he said. But in January, the lawyers at the Dreier affiliate became available. “Their availability, which certainly was attributable to an unhappy coincidence of things, hit our growth criteria,” Halpern said.
Other firms added significantly to their existing Los Angeles offices in recent months. A large number of former lawyers at the Dreier affiliate joined Chicago’s Wildman, Harrold, Allen & Dixon, which opened its Beverly Hills, Calif., office in 2008, as well as Minneapolis-based Robins, Kaplan, Miller & Ciresi, which has had a Los Angeles office since 1995. And last month, McKenna Long & Aldridge added 17 lawyers to a Los Angeles office of 66 attorneys after acquiring the bulk of Brown Winfield Canzoneri Abram, a Los Angeles law firm that has since dissolved.
For some firms, Los Angeles wasn’t the initial target.
Alston & Bird, which opened a Los Angeles office on Sept. 1 after acquiring Weston Benshoof Rochefort Rubalcava & MacCuish, a Los Angeles firm with 83 lawyers, had originally been looking more closely at Northern California to expand its intellectual property and renewable energy practices, said managing partner Richard Hays. In August, the firm had opened its first California office in Silicon Valley’s Palo Alto, Calif., with the addition of a dozen lawyers from Akin Gump Strauss Hauer & Feld.
“We had a sense that’s where the opportunities would be, and so we were looking there,” he said. “There were opportunities in Northern California, but as we talked with multiple people, it just turned out that the opportunity that Weston presented was more attractive. As it turned out, they happened to be located in Los Angeles.”
Similarly, Lathrop & Gage had been looking to the West Coast to expand its legal services for its clients, said Joel Voran, the firm’s chief executive officer, when the opportunity arose to acquire seven lawyers from Spillane Schaeffer Aronoff Bandlow, a litigation boutique in Los Angeles that has since dissolved.
“We didn’t designate that we needed to be in L.A. specifically,” he said. “It was more the people, and type of practice they had, that really fit. Although we have a fair amount of business in L.A., we didn’t say, ‘We need to be in L.A., and let’s find people to start an office with.’ It was the reverse.”
Some firms said the potential for intellectual property, particularly litigation, spurred interest in Los Angeles.
Brooks Kushman, an intellectual property boutique with 65 lawyers, opened its first California office in Los Angeles in September. John Halan, a shareholder in charge of marketing, said the firm, which has clients in Los Angeles, “always used local counsel out there, and we thought it made more sense to have our own office.”
Since opening with the addition of senior attorney Mark Mizrahi, a former partner at Belasco Jacobs & Townsley who served as local counsel to Brooks Kushman for 10 years, the Los Angeles office has added staff members and one more attorney, Halan said.
To open its first California offices last month, Haynes and Boone acquired intellectual property boutique MacPherson, Kwok, Chen & Heid, which has about a dozen lawyers each in Silicon Valley’s San Jose and Orange County’s Irvine.
The focus in California is on patent work and intellectual property litigation for technology clients, said Terry Conner, managing partner of Haynes and Boone.
“We’re learning that Orange County has a wealth of technology-laden companies,” particularly in the life sciences arena, he said.
What economic crisis?
For several firms, the economic downturn has had little impact on their plans to establish a national platform by opening an office in California. Los Angeles, they discovered, appeared to be the right fit.
“California is a very fertile area for insurance coverage,” said Jerry Oshinsky, who opened the Los Angeles office of Gilbert Oshinsky in October after joining the firm, then called Gilbert Randolph. “When it’s a negative economy, insurance litigation goes in the opposite direction.”
Oshinsky, who represents corporate and individual policyholders in various liability actions, said he has “been swamped” in recent months. He said he chose to be located in Los Angeles because he has family in the area, and “L.A. is probably viewed nationally as the center of business activity” in the western United States.
Most of the firm’s 40 lawyers are in Washington. This month, Gilbert Oshinsky hired another Los Angeles attorney, Vered Yakovee, a solo practitioner in Marina del Rey, Calif., who is editor of the journal for the American Bar Association’s Forum on the Entertainment and Sports Industries.
Another firm, Constangy, Brooks & Smith, a labor and employment boutique, opened its Los Angeles office in September, about a month after opening other offices in Chicago and Milwaukee.
But Los Angeles was the highest priority, said Neil Wasser, chairman of the executive committee of Constangy, Brooks & Smith. “About two years ago, we made the decision we wanted to be in California,” he said. “And the genesis of that is that our clients kept telling us we need to have a location in Southern California. We surveyed our partners, and it was the one location, California, that was universally recommended as where we needed to be.”
The firm has established an affiliation with Landegger, Baron & Lavenant, whose nine lawyers had worked with the firm in the past, to open offices in two Los Angeles suburbs, Encino and Camarillo.