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These days, it seems, it pays to be low tech. That seems to be the mantra among California law firms that are moving up a just-released national rankingof the highest-grossing U.S. firms by Recorder affiliate The American Lawyer magazine. The AmLaw Second Hundred ranks firms that fall between Nos. 101 and 200 in terms of gross revenue. The survey is a follow-up to July’s American Lawyer rankings of the nation’s 100 highest-grossing firms. Sixteen California firms made the list — the most from any single state — and players with no tech or low-tech clients saw brighter numbers than counterparts who bet heavily on the technology boom. The news was particularly good for a bevy of Los Angeles firms. Southern California firms in the second hundred rode their traditional, full-service practices to higher revenues and profits than firms in tech-heavy Northern California. As a group, the 10 Southern California firms on the list averaged profits per equity partner of $668,000, compared with the Northern California average of $585,000 per equity partner. A good example of how the tech boom and bust are affecting the rankings is the showings of Fenwick & West — a Silicon Valley mainstay — and Sheppard, Mullin, Richter & Hampton, a Los Angeles-based firm that boasts a more traditional mix of practices. In 1999, Sheppard ranked No. 101, but slopped over the next few years to 116th place. The fall came despite the fact that the firm increased its grosses every year. The tech boom simply meant that other players were growing faster and rising farther. That included Fenwick, which bounded from 129th to 97th as tech law revenues poured in during 2000. But Fenwick has since slipped to 125th, and revenues have dipped from a high of $158 million to $142 million. By contrast, Sheppard is back at No. 104, and revenue is up to $166 million. Guy Halgren, chairman of Sheppard’s executive committee, said plenty of L.A.-based lawyers were licking their chops over the technology industries. But Sheppard didn’t bite. The firm’s practice mix — Sheppard is roughly split in equal parts litigation and corporate — has helped it weather the economic downturn, Halgren said. “We wished during the boom we had more of a tech and emerging-growth business,” Halgren said. “On the other hand, we never wanted to be as focused on that as some of our competitors.” Fenwick Chairman Gordon Davidson isn’t about to write off technology, however. He said the worst is already over. “There’s nothing magic; our revenue declined from 2001 to 2002, reflecting the decline in activity in the technology industry,” Davidson said. “I believe it’s bottomed out, and we have seen a steady increase in our work since last fall.” The news wasn’t all bad for Northern California players. San Francisco’s Sedgwick, Detert, Moran & Arnold, which has been trying to shed its emphasis on low-margin insurance work and take on more commercial litigation, saw a 24 percent jump in revenue, to $130 million. Also rising was L.A.’s litigation-heavy Munger, Tolles & Olson, which bumped its revenue up by 19 percent. Irell & Manella, which is about half litigation, also moved up, with $166 million in revenue, a 14 percent increase over the prior year. The firm is within shouting distance of reaching the AmLaw 100. Kenneth Heitz, the former co-managing partner of the L.A.-based firm, said Irell’s litigation group helped. But the firm’s corporate group did a brisk business with non-tech work, such as representing casino builder Wynn Resorts Ltd. “We had a fabulous years in litigation, a terrific year in the insolvency department,” Heitz said, “and a good year for corporate and tax work.” Firms from 26 states landed on the AmLaw 200 list, including the 16 from California, plus 10 from New York, nine from Illinois and seven from Pennsylvania. Five national firms also landed a slot. The single international firm, Altheimer & Gray, announced last month it was winding down. Ballard Spahr Andrews & Ingersoll of Philadelphia, which grossed $168.5 million in 2002, ranked No. 101. The list ends with Irvine’s Knobbe, Martens, Olson & Bear, which squeaked into 200th place with a gross of $78 million. Knobbe is one of three California firms new to the AmLaw 200 this year. The other two, both based in L.A., are Quinn Emanuel Urquhart Oliver & Hedges, which grossed an estimated $106 million for No. 159, and Jeffer, Mangels, Butler & Marmaro, which hit No. 197 with $80 million. Knobbe partner Don Martens said he was pleased to see his firm in the company of the nation’s largest players because Knobbe’s emphasis on just one area — intellectual property litigation — has come under fire from full-service competitors and some clients who trumpet one-stop shopping. Martens pooh-poohed the notion that boutiques are doomed. “If they’re going to have brain surgery, they hire a brain surgeon to do it,” Martens said. “We just find we’re able to grow and do very well in our specialty.” In addition to the three new California candidates, four other firms made their debuts on the AmLaw 200 list. Among the newcomers is Boies, Schiller & Flexner, of Armonk, N.Y., the firm co-founded by former Microsoft antitrust prosecutor David Boies. Boies’ firm had the highest profits per partner among the second hundred firms, logging $1.13 million per partner. On the low end for profits per partner was Thompson Hine, of Columbia, S.C., which logged $280,000. See related chart: The Second Hundred Highlights

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