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Last year, the Seattle-based AquaEnergy Group needed help on a licensing matter before the Federal Energy Regulatory Commission. Rather than seeking out a large D.C. firm with a substantial regulatory practice, the company that generates power from ocean waves retained FERC specialist and D.C. solo practitioner Carolyn Elefant. “You can go to a big law firm that has a lot of people,” says Alla Weinstein, chief executive of AquaEnergy, “but they can know everything and yet still somehow know nothing about what you need.” Companies like AquaEnergy, small players in huge fields such as energy, telecommunications, and transportation, have plenty of small law firms to choose from in the D.C. area. The region is teeming with shops, ranging from one-lawyer outfits like Elefant’s to 15- to 20-lawyer firms, focused squarely on the regulatory world. Some of these small-firm lawyers come out of the regulatory agencies, while others left larger firms to set up their practices. All say that a key to their success is the nature of regulatory work itself: With its premium on knowledge of the labyrinthine rule-making processes at agencies such as FERC, the Federal Communications Commission, and the Food and Drug Administration, agency work is tailored toward individuals with singular experience and highly technical expertise. And because important regulatory issues often involve nearly every player in an industry, big firms often find themselves conflicted out of cases that they then refer to others. Scott Harris of Harris, Wiltshire & Grannis, a D.C. telecom firm with 18 lawyers and big-name clients such as AT&T, Cisco Systems Inc., and Nextel, says, “Unlike a litigation practice, where you can review documents without being an expert in a particular area, in regulatory practice you really need to have a certain level of expertise.” In addition to deep knowledge of a client’s business practices and the relevant agency rules, the regulatory practitioner must also master the curiosities of federal agency culture. Kate Beardsley of D.C.’s eight-lawyer Buc & Beardsley, which handles work before the FDA, points out that that the bureaucracies inevitably develop a body of “informal law” requiring even more specialized knowledge of the personalities within each particular agency. “Regulatory work is very specialized,” says Scott Hempling, whose Silver Spring, Md., firm does energy and electricity work. “You’re basically an elbow doctor, and you know everything about the elbow.” Hempling says the practice is something of a cross between lawyering, engineering, and tapping personal connections. “It’s so political,” he says, “but it’s the right kind of politics, [in that agencies] use a recognizable principle to take scarce resources and divide them up in a fair way that makes sense.” Some lawyers add that big firms’ routinely run into conflicts of interest between clients, create a steady stream of work for small regulatory boutiques. Harris, who left Gibson, Dunn & Crutcher with two colleagues to form his boutique in 1998, says that “the nature of a telecom practice is to participate in large regulatory proceedings that involve the entire sector.” As a result, he says, “If a conflict is possible, it will arise in a large firm.” Richard Wiley, managing partner of D.C. powerhouse Wiley, Rein & Fielding, home to 226 lawyers and tons of FCC work, concurs. “I refer a lot of regulatory business out to smaller practices because of conflicts,” he says. “It’s a concentrated practice, and conflicts absolutely arise.” Wiley said some of the local regulatory boutiques he refers work to include Irwin, Campbell & Tannenwald; Reddy, Begley & McCormack; and Moir & Hardman. Russ Lukas, managing partner at Lukas, Nace, Gutierrez & Sachs, a D.C. telecom firm with 14 lawyers, has been on both sides of the conflict issue. After forming a telecom firm with two other lawyers in 1974 and achieving rapid success in the cellular field, Lukas says the firm grew to around 40 lawyers, and conflicts began to develop. “Conflicts broke out because we were so successful in such a small industry,” he says. The firm eventually split up, and Lukas left to found his current firm, which he says he aims to keep at around 20 lawyers or less. TOUGH ON SOLOS While being relatively small has its advantages, most agree that solo practitioners are few and far between in regulatory work. As Richard Frank, managing partner of 26-lawyer FDA-oriented firm Olsson, Frank & Weeda, puts it, “There aren’t a lot of onesies or twosies in our area.” Sometimes the way an agency is organized matches up well with a firm of six to eight lawyers. Beardsley notes that the six categories of FDA specialization � drugs, medical devices, biologics, food, dietary supplements, and veterinary medicine � correspond almost perfectly with the number of lawyers in her firm. All those specializations might overwhelm the lone attorney. Either that, Frank says, or the solo lawyer must find a very small niche. “There’s even a solo [in FDA practice] who does only flavor law.” In addition, as Hempling discovered when he went out on his own, the solo is often constrained to fight one battle at a time. Hempling started his own practice after spending three years with D.C.’s Spiegel & McDiarmid, and then two years with the Environmental Action Foundation, a public-interest organization no longer in existence. With that background, he was able to establish a name for himself within the electricity regulatory field that allowed him to hang out a shingle in 1990. For the first five years, Hempling worked alone, carving out a niche representing state public service commissions, such as those in Arkansas, Missouri, and the District. In the mid-1990s, he says, the workload grew tremendously as the federal government began to take a keener interest in electricity regulation � traditionally the domain of the states. In addition, utilities began diversifying into different commercial areas, raising concerns about their responsibilities as electricity providers. Hempling realized that he needed to bring some more attorneys on board. “It was the two or three war theory,” he remembers. “I wanted to be able to handle a couple of big things at once. You’re only well-known if you’re seen in many different places.” But where substantial growth for many firms would mean hiring a dozen new attorneys, Hempling has only added one: David Lapp. Hempling also has four attorneys who serve as of counsel to the firm, coming in on occasion to help out. This, says Hempling, is because the typical client seeking regulatory advice looks for an individual it can trust rather than a herd of lawyers. “It’s not about bulk,” Hempling says, “it’s about the person.” UP AND DOWN WITH THE INDUSTRY While regulatory law can evolve slowly, giving someone with decades in the field a big advantage over generalists, occasionally the work of an agency or the fate of an industry can turn around overnight. Those kind of changes can all but wipe out a practice. Herndon’s Robert Walker, a former partner at Shawn, Mann & Niedermayer whose current solo practice specializes in transportation issues, found that out in the late 1980s. Walker used to do work for the trucking companies and other motor carriers, primarily in front of the Interstate Commerce Commission (ICC), the country’s first independent regulatory agency. As deregulation began to take hold in the industry in the late ’70s and early ’80s, though, Walker says regulatory work dried up. Many law firms that did work for motor carriers took a hit as the industry consolidated. Walker had to develop skills beyond the nitty-gritty of transportation work to help survive as a solo. “As entry into the industry got easier and [formerly federally regulated trucking] rates weren’t policed,” Walker remembers, “people couldn’t stay in business.” Many of Walker’s clients suffered through severe economic turmoil and turned to him for bankruptcy work and financial planning. In addition, matters that had been handled by the ICC, which dissolved in 1997, began to be litigated in the federal courts. So Walker expanded into litigation, today a mainstay of his practice. “Now all that’s really regulated as far as trucks and buses are concerned is safety,” he says, “and [the Department of Transportation] is not even doing a whole lot in that area.” MIXING IT UP Despite such dangers, Walker and the FERC specialist Elefant are among the solo practitioners doing regulatory work and thriving on the freedom that only self-employment can provide. Elefant, a former attorney adviser for FERC, spent three years with Duncan & Allen, a local energy boutique housing seven attorneys. Even in a small firm, though, Elefant says she felt pigeonholed into handling regulatory work when she also wanted to get some litigation experience. In 1993, she went out on her own, taking only one client with her. She says she knew that going solo was unusual for a regulatory lawyer, especially one who had spent time inside an agency. “A lot of people at regulatory agencies don’t have a very entrepreneurial mentality � more of an employer-employee mentality,” she says. As a result, she adds, lawyers who leave agencies tend to go to bigger firms, trading one bureaucracy for another. After a while, Elefant started getting referrals from larger firms that had client conflicts, as well as new clients who simply did not want to pay big-firm fees. Pretty soon she was established with a solid list of regulatory companies, including several municipalities and hydroelectric power providers. Steady income allowed her the flexibility to get her feet wet in litigation by taking court-appointed criminal defense cases in D.C. Superior Court, without feeling any pressure to settle those cases in order to pay the bills. Today Elefant feels herself uniquely situated to handle litigation on energy issues. “Very few energy attorneys have had a lot of jury and litigation experience,” she says. Still, she says, clients usually come to her to troubleshoot a problem with an agency, not to map out a plan for taking advantage of a larger policy shift � such as rule-makings coming down now from FERC on restructuring the utility industry. In order to keep up with the changes, Elefant maintains an of counsel relationship with Hempling’s firm, which is monitoring the major utilities’ shift to regional control and coordination. Elefant argues that the solo regulatory lawyer should have litigation skills as a safeguard. “It never made sense to me to put all of my eggs in one basket, especially as a small practitioner,” she says. ” In a big firm, they can put you in another practice area if the regulatory work dries up. That’s not an option for me.”

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