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It’s been a cruel summer for some out-of-town firms, with Arter & Hadden, Oppenheimer, Wolff & Donnelly and Altheimer & Gray all going belly-up or exiting the Bay Area. And judging by some of the numbers, Philadelphia’s Schnader Harrison Segal & Lewis is showing signs that its days by the Bay could also be numbered. The firm’s 4-year-old San Francisco office has been reduced to a skeleton crew following a string of high-level defections over the past several months. While the San Francisco office counted 17 attorneys at the beginning of the year, it now has seven lawyers. The attrition mirrors a firmwide trend, as Schnader’s total headcount has plunged nearly 40 percent, from 324 attorneys in 2001 to 197 attorneys now. Among this month’s departures: Robert Gebhardt, the co-chair of the firm’s aviation practice, who joined Jeffer, Mangels, Butler & Marmaro along with an associate; and Charles Donovan, a corporate partner who left for Sheppard, Mullin, Richter & Hampton, also with an associate. Meanwhile, partner Craig Livingston has announced plans to resign and launch his own practice closer to his East Bay home in the coming months. Livingston could not be reached for comment. Donovan and Gebhardt each said their departures are simply the results of attractive offers from rival firms. “The truth is that I left not because of negatives of Schnader, but because of the positives of Jeffer,” said Gebhardt. Schnader entered the San Francisco market in 1999 by picking up a group of eight attorneys from the dissolving Bronson, Bronson & McKinnon firm. Much of the drop stems from a botched 2000 merger with Goldstein & Manello, a 50-attorney Boston firm. In September, the entire group de-merged itself, leaving Schnader with empty office space in Boston. Another merger with Philadelphia’s Mesirov Gelman Jaffe Cramer & Jamieson also proved to be a disappointment, with several of that firm’s top partners subsequently heading for the exits. According to former Schnader partners, the financial cost of the mergers and the firm’s mishandling of them caused a lot of dissatisfaction within the ranks. “In part it’s just a matter of partner confidence in the ongoing viability of it as a place to have your career,” said a former partner, speaking on condition of anonymity. “And it is one of those things that can be contagious.” “People are looking for greener pastures,” noted another former partner. “It’s one of those firms that I think grew in the boom times and realized that they kind of overstepped.” Schnader has since taken steps to stop the bleeding. Earlier this year, David Smith took the helm as the firm’s CEO, replacing Ralph Wellington, on whose watch much of the rocky times occurred. And despite the dwindling San Francisco ranks, Schnader attorneys say the firm’s sole West Coast office isn’t on the verge of extinction. Stephen Dye, one of the remaining San Francisco partners, said the worst is behind it and that the office is now in the process of rebuilding. “There are plans to grow the office, and the firm is very committed to doing that,” says Dye, noting that the San Francisco office is currently interviewing associates. The litigation-driven office has several cases coming up for trial this summer and, even with the departures, is having one of its best years, says Dye. “It certainly won’t be as strong as it would have been had they not left, but I think because of the strength of the year that we’re having, we’re still going to be above any of our prior years,” Dye said.

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