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With few indications of economic recovery on the horizon, partner classes at Bay Area law firms in 2002-03 held to their post-boom levels. But some firms were able to reward the hottest lawyers of the moment: litigators. A majority of the attorneys who did make it to partner last year worked in litigation. Of the firms polled by The Recorder only four named fewer partners this year than last. Six firms increased their class sizes and three stayed the same. Two firms surveyed stand out, if for opposite reasons: Morrison & Foerster continued its trend of significantly cutting its new partner class, while Wilson Sonsini Goodrich & Rosati significantly increased its new class. MoFo continued its three-year trend of naming seven fewer partners than the previous year. This year’s partner class of seven is down seven from 2002′s 14, which was seven fewer than the 21 new partners elevated in 2001. “There was no grand design to end up with smaller classes,” said Keith Wetmore, MoFo’s chairman. “There’s some drop-off in slow times in small practice groups. We try to keep the scale of growth in the partnership in line with the growth in the practices.” But Peter Zeughauser, a law firm consultant, said firms are less likely to name more partners when revenue is sagging. “[There has been] a long-term trend nationwide of increased scrutiny for partner admissions because of the dilutive effect admitting partners has on profits per partner,” he said. “There was a notable geographic exception in the Bay Area where we saw pretty liberal admissions standards. But the firms adjusted when the tech economy went south, restricting admission to partnership to be more in equilibrium with the economy.” As firms elevate fewer associates to partner, the number of lateral partners hired held steady or increased, and MoFo’s Wetmore said he believes the firm will take on more laterals this year. Some of those laterals, Wetmore said, may be refugees from the dissolution of Brobeck, Phleger & Harrison. He also expects to reap some lateral partners who are disgruntled with other firms that positioned themselves to benefit from the high-tech boom. “You don’t have to fear ending up like Brobeck to figure out the [high-tech] business model isn’t all it’s cracked up to be,” he said. “I’m talking to partners at [high-tech] firms who are still profitable but who are concerned whether the orientation of these firms is appropriate for the future. National full-service firms like our own will be the beneficiaries of this.” While MoFo’s associates may have a harder time making partner these days, those at Wilson Sonsini Goodrich & Rosati may be seeing a ray of light. While the firm made only five partners in 2002, the firm shot back up near its 2001 levels this year, elevating 13 associates. The Bay Area’s smaller firms also remained consistent despite a volatile legal market. Howard, Rice, Nemerovski, Canady, Falk & Rabkin, a 140-attorney firm, has consistently elevated two to four associates each year since 2000. The firm has taken on roughly the same number of laterals each year as well. “There’s no emphasis on short-term economics here — our view is long term,” said Stuart Lipton, the firm’s managing partner. “We made people partners in bankruptcy at a time when it was down, and that move is helping us now.” Mark Pitchford, Cooley Godward’s chief operating officer, said many factors — including case and deal management and mentorship quality — are looked at when making new partners, but economic factors are crucial when choosing who is elevated. “The most important [factors] are their quality-based skills as a lawyer — client handling and retention, their productivity, and their shown ability to source new business,” he said. “But we can’t ignore external factors; we look at their book of business from day one. It’s a continuing process, and not everyone makes it.” BUSINESS, LITIGATION ON TOP The economy’s effects can also be seen in the practice areas in which most firms are making new partners. Most elevations this year come in business and litigation groups. For example, Cooley Godward’s 10 new partners are evenly split between its litigation and business practice groups. “A lot of the Bay Area practices were heavily focused on the incredibly strong corporate practice that has dominated law firm economics during the tech boom — now litigation is a more attractive practice,” said Zeughauser. And this year’s new partner classes are clear examples of firms emphasizing growth in their litigation and corporate groups. Nearly half of Orrick’s 13 new partners are litigators. Howard, Rice’s two elevations were split between business and litigation groups, and most of Townsend’s new partners are litigators as well. Heller Ehrman White & McAuliffe, which elevated eight to partner, saw its profits per partner rise from $645,000 in 2001 to $710,000 in 2002. At the firm’s strategic planning meetings, the partners try to predict each year’s pattern of growth and elevate attorneys appropriately. “Our goal is to increase profits per partner every year, but we need to grow to do that,” said Robert Hubbell, Heller’s firmwide managing partner. “Like all firms, we try to make rational predictions about what a year will be like and acknowledge the economy.” While the truth is that working in a hot practice group will speed an eager associate into a firm’s partnership, all is not lost for those in slower practice groups, said Pillsbury Winthrop junior partner Mark Elliott, an environmental litigator. “Realistically, everything moves in cycles — litigation is hot now, but it was corporate four years ago,” he said. Elliott has a bit of advice for frustrated associates: “Just bide your time and look to improve your skills; it might take a couple of years longer. Take outside classes and hone your business development skills. Don’t jump to another practice group. Time passes quickly, the cycle will change, and then you’ll be in a better position.”

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