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Trusts and estates lawyers spend a good deal of their time managing dead people’s money. But at many of the Bay Area’s big firms, it’s the practice itself that’s been laid to rest. Firms like Pillsbury Winthrop, Fenwick & West and Heller Ehrman White & McAuliffe have either completely abandoned the practice or pared back their emphasis on it. As a result, the trusts and estates practice has increasingly become the province of mid-sized firms and specialty boutiques. Now there are signs that the practice may be moving back into the big, full-service shops as a handful of out-of-state firms eye the San Francisco market. In October, Rochester, N.Y.-based Nixon Peabody hired trusts and estates attorney Kathryn Johnson from Heller Ehrman. And other large, east-of-the-Rockies firms including Holland & Knight, Duane Morris and Dorsey & Whitney are all making plans to establish a T&E foothold in San Francisco. But the out-of-towners will have their work cut out for them as they try to lure local estate attorneys back into the big-firm environment. Despite the challenges, the firms are bullish on the Bay Area wealth management market. “Although Silicon Valley has been depressed over the last couple of years, there’s still significant need for planning there, and there are not a significant number of the larger firms that have really stressed the trusts and estates practice,” says Holland & Knight’s Edward Koren Jr., who heads the firm’s T&E practice. For a practice that runs on wealthy individuals, the Bay Area has plenty of appeal. San Mateo and Marin counties were among the top 10 counties in the United States by average adjusted income in 2000, according to Syracuse University’s Transactional Records Access Clearinghouse. Santa Clara County was No. 14. And the residential real estate market means that simply owning a home in the Bay Area can give a person a high net worth. With more than 100 trusts and estates attorneys firmwide, Tampa, Fla.-based Holland & Knight has one of the largest such groups in the country. But the firm’s 20-attorney San Francisco office does not have a T&E practice. Koren says the firm has already made some attempts to fill the hole, and plans to increase its efforts in the new year. “We don’t want to have an office that is in such a market as San Francisco that doesn’t have a local capacity to do this work,” says Koren. Similarly, Philadelphia’s Duane Morris is on a mission to push its growing T&E practice into its 4-year-old, 14-attorney San Francisco office. In addition to the firm’s existing San Francisco clients that could use estate-planning services, Cooper believes there’s plenty of untapped potential in the area. “I fully expect that we’ll be able to capture our share of the work that’s available,” says Cooper. “And we’re hoping to do that sooner rather than later.” Over the past several years, of course, many of the Bay Area’s firms have concluded that a trusts and estates practice doesn’t fit into their overall strategy. While Pillsbury Winthrop still has a wealth management practice, the firm’s Bay Area office phased out its probate section three years ago because it didn’t require the numerous resources at the firm. “There’s not a lot of overhead associated with a practice like that,” says Pillsbury firmwide Managing Partner Marina Park. “And to be in a large firm you need to be in an area that really benefits [from that overhead].” But firms like Duane Morris and Nixon Peabody say they’ve managed to make the practice viable within a big-firm environment. According to Cooper, the trusts and estates practice is not run as a loss leader at Duane Morris, and is both a very active and profitable part of the firm. “There are some folks who would say that we are a little bit contrarian in our views,” says Cooper, “but we have long found that this practice has been, is and continues to be a very valuable service that we provide on a very businesslike basis to a wide swath of clients.” Nixon Peabody’s Johnson says that while her $395 hourly rate is higher than what experienced solo T&E attorneys might charge, she can remain competitive by delegating more perfunctory tasks, like drafting, to her lower-rate paralegal. And unlike the boutique firms that are limited to trusts and estates work, firms like Nixon Peabody and Duane Morris can take care of all of a client’s needs directly. Since many clients’ wealth is in real property, for instance, it’s not unusual for them to need real estate counsel. And clients who set up special partnerships or limited liability companies need corporate counsel as well. “Once they’re happy with the relationship, the more you can do for them the better,” says Nixon Peabody’s Johnson. Donald McCubbin, a partner at San Francisco boutique Friedman, McCubbin, Spalding, Bilter, Roosevelt, Montgomery & Worth, says there are enough clients in the Bay Area with differing needs that he’s not worried about losing work to full-service newcomers. “If that appeals to a client, then that’s fine. There’s plenty of business to go around.” The bigger challenge for the out-of-state firms, he predicts, will be acquiring the talent to jump-start a San Francisco practice. “It’s a pretty thin market locally,” says McCubbin. “Unless they find a firm that’s breaking up, I don’t think there are that many experienced T&E practitioners who are ready to move, who could be seduced into joining a large firm.” Philip Feldman, a partner at San Francisco’s Coblentz, Patch, Duffy & Bass, says he’s gotten several phone calls from legal recruiters looking to lure estate attorneys to large, out-of-town firms. But he believes the boutique and mid-sized firm environment is better suited to trusts and estates attorneys. “It’s very difficult to maintain a comparable level of dignity and a financial level of reward within the partnership at a large firm when your practice area has limited leverage and relatively low revenue per case,” says Feldman. The full-service firms counter that the trusts and estates practice is a much more integrated and vital part of the partnership than was the case at large firms in the past. Trusts and estates is not viewed as a second-class citizen at Holland & Knight, insists Koren. And while the firms acknowledge the challenges of recruiting trusts and estates laterals, they’re confident of their appeal. “To the extent that we can find trusts and estates lawyers,” says Holland & Knight’s Koren, “I think we’ve been able to show them that having a full-service firm allows them to serve their clients better than simply being a boutique practice.”

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