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It’s been 18 years since Chicago’s Seyfarth Shaw moved into San Francisco. For the 50-attorney office in downtown S.F., the anniversary marks a passage into adulthood. In June, a new managing partner took the helm of the San Francisco office for the first time since it was founded and already has shaken up its management structure. And the office is on a quest to change its image and size. It’s a transformation that has been happening firmwide. Seyfarth Shaw began its life as a labor and employment law firm, and the practice has long defined the firm and powered much of its growth. But while labor and employment law has proved to be a reliable engine until now, it may not be enough to keep pace with an increasingly multi-faceted and well-heeled set of competitors. The answer, according to Seyfarth’s top brass, is to broaden the firm’s less-developed but higher billing-rate practices, particularly its corporate department. “Our labor and employment practice is extremely well established and well known,” says firmwide Managing Partner J. Stephen Poor. “There are significant areas we could grow and expand it, but corporate and real estate is an area where there are larger markets we haven’t even entered.” In June 2001, Seyfarth’s Boston office acquired Chappell White, a 12-attorney firm specializing in venture capital, banking and real estate. One year before that the firm picked up Atlanta’s McCullough Sherrill, whose 40 attorneys focused on corporate real estate work and litigation. Now the San Francisco outpost, whose corporate practice is currently non-existent, is poised for an upgrade. With just a few months as the office’s new managing partner under his belt, William Dritsas is on a mission to build a transactional department. But attracting corporate talent and successfully developing that type of practice is a tall order for any firm, let alone for one with such an entrenched labor and employment culture. And at a time when corporate attorneys with big books of business are as valuable as gold, Seyfarth may find itself at the end of a long line of suitors. A mustachioed labor and employment lawyer who’s been with the San Francisco office since its start, the 46-year-old Dritsas says the time has come for the San Francisco office to expand and diversify. “In the past couple of years we’ve grown an associate here or there, but we haven’t added those lateral components as our other offices have,” he says. “Our firm is evolving, or has evolved, to where we are now firmly committed to establishing all of our practices in all of our offices.” With more than 500 attorneys and with offices in nine U.S. cities and in Brussels, Seyfarth has stretched well beyond its original Chicago boundaries. Over the years, the firm has also expanded from its labor and employment law beginnings, bolstering its ranks with commercial litigators, patent prosecutors, employee benefits attorneys and government contract lawyers, among others. However, despite this growth and diversification, Seyfarth remains a labor and employment shop at its core. Half the firm’s lawyers belong to the labor and employment law group and approximately half the firm’s revenues, which totaled $226.5 million in 2001, have the group’s fingerprints on them. The group also has the most clout. Five of the seven members on Seyfarth’s executive committee are labor and employment lawyers, and, with the exception of Atlanta, every U.S. office is run by a labor and employment attorney. (The Sacramento office has three managing partners: two labor and employment lawyers and one commercial litigator). “I don’t think it’s necessarily by design,” Dritsas says of the firm’s management makeup. “We don’t say only employment lawyers will be the managing partners. But that’s just how it’s evolved looking at the skill set of the people who are best to organize a group.” Dritsas entered the firm’s leadership in the spring after Robert Ford ended an 18-year spell as the San Francisco office’s managing partner to join Jones, Day, Reavis & Pogue. Originally a partner in Seyfarth’s Los Angeles office, Ford founded the San Francisco outpost in 1984. He was joined by Dritsas, a Seyfarth associate from L.A., later that year. Ford directed the San Francisco office’s affairs almost single-handedly and enjoyed an uncontested reign as the managing partner; no one would dare challenge him for the post, confides one Seyfarth attorney. But according to Seyfarth partners, it became clear that Ford would face his first challenge — from Dritsas — for the managing partner job this year. “Whether that entered into his decision to leave, I don’t know,” says Gilmore Diekmann Jr., a partner in Seyfarth’s San Francisco office. Ford did not return calls for comment. What’s clear is that Dritsas hasn’t been hesitant to make changes in the few months since he’s taken over. Most significantly, this has meant revising the top-down management structure established by his predecessor. In his first meeting as the office head, Dritsas doled out responsibilities formerly controlled by the managing partner to the various partners in the room. “It literally went around the table,” recalls Seyfarth partner Brian Ashe. “Every one of the partners at the table was given a role.” The delegated duties included everything from handling lease issues to lateral recruiting to planning office socials. “We have a czar of parties now,” says Ashe, “whereas before that was done by Bob.” The new approach has earned high marks from the attorneys in the San Francisco office. And last month, Dritsas received a firmwide vote of confidence when he was elected to the firm’s executive committee. Now he faces the bigger challenge of delivering a corporate practice to San Francisco, a two-practice office roughly split in half between commercial litigators and labor and employment law attorneys. With a corporate team, Seyfarth’s San Francisco office can not only capture a bigger share of its clients’ work, it can tap into a more lucrative tier of work. “Top corporate lawyers today can command $650, $700 an hour,” says legal consultant Peter Zeughauser. “There aren’t many employment lawyers, if any, that can command those kinds of rates.” Seyfarth has garnered a lot of the lucrative, high-end employment work (Dritsas says the firm is currently handling some 30 wage-and-hour class actions), but the overall field of employment law is increasingly becoming a commodity and billing rates are under pressure. “An employment practice is not going to carry them through the next century in the manner in which they’re accustomed to,” says Zeughauser. Right now, Dritsas has the luxury of time. In the current bear market, Seyfarth’s employment and litigation practices have kept the firm moving forward while other firms have staggered. Partners at Seyfarth say the firm has had a good year, and they expect gross revenues and profits for 2002 to be up about 10 percent from the year before, when profits per partner were $440,000. But according to some legal experts, even a down market won’t make bagging a corporate group any easier for Seyfarth. The biggest hurdle, say many, is that corporate rainmakers are in extremely high demand, and Seyfarth is probably not the first place they would think of going. Every law firm with a corporate department is looking for client-rich lateral partners to provide it with a shot in the arm, says Bay Area legal recruiter Avis Caravello. “There’s only a limited supply of major corporate practices, and the people who control those practices are getting bombarded with calls.” Moreover, says Pillsbury Winthrop corporate partner Jorge Del Calvo, the sizes of books of business are in flux right now, meaning that firms must be very careful in their due diligence. “People who two years ago had a $4 million or $5 million practice may have a $500,000 practice today,” he explains. “If you want to build a new practice like that you have to take some chances and have some patience.” Attorneys at Seyfarth’s San Francisco office anticipate that its labor and employment group will initially feed a fledgling corporate team with work as it gets up to speed. But an established book of business is clearly a key requirement in Seyfarth’s search. “If you’re starting from scratch in that area, you really have to get people who have something to build on,” says Seyfarth’s Diekmann. Other aspects of the future corporate group are more flexible. By keeping all options open, Dritsas believes he’ll be able to overcome some of the challenges of acquiring a transactional practice. San Francisco’s corporate division could be assembled by picking up individual lateral partners over time, or by acquiring an entire group, says Dritsas. Even the type of corporate work isn’t set in stone, and could include anything from mergers and acquisitions to more mundane, middle-market transactions. “We’re not Skadden, Arps [Slate, Meagher & Flom], and we’re not trying to be Skadden, Arps,” says Dritsas. “What we do have, and what makes it particularly attractive for the right group, is an opportunity to come in and create a corporate practice on the West Coast.” Dritsas acknowledges the challenge of his task, but is confident he’ll be able to get a foothold in the corporate market within a year or two. And while the labor and employment lawyers have long been the most prominent group at Seyfarth’s San Francisco office, Dritsas says even that could change. “I’m not concerned about what our percentages are. There’s no model that says one group must be bigger than the other group,” says Dritsas. “We know how good we are in the labor and employment law area. We don’t need to re-enforce that by saying we’re the biggest group.”

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