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Chart: California’s AmLaw 100 Firms Chart: Out-of-state Players California’s top firms are enjoying an economic recovery on pace with the rest of the country. Yet Bay Area shops — tech firms in particular — are lagging behind their more diversified counterparts in and outside the Golden State. That’s the picture that emerges from the AmLaw 100, the annual rankings of the 100 highest-grossing U.S. firms, published this week in Recorderaffiliate The American Lawyer magazine. Gross revenue for the 12 California firms that made the chart both this year and last rose 9.9 percent in 2003, edging out growth of 9.5 percent among top-ranked firms nationwide. But much of the state’s growth was fueled by Los Angeles firms, where gross revenue among firms listed both years rose 14 percent. The eight Bay Area firms listed both years saw revenue rise just 7 percent. Revenue at Silicon Valley tech firms Wilson Sonsini Goodrich & Rosati and Cooley Godward sagged again in 2003, plunging Wilson down 10 rungs, to No. 46, and Cooley seven notches, to No. 68. Revenues rose a scant 2 percent at Gray Cary Ware & Freidenrich as well as at Pillsbury Winthrop, which relies on tech and telecom for half its business. Those firms also slid down the chart, to 85 and 39, respectively. While the tech firms struggled to get their mojo back, firms with diversified practices, particularly those with robust litigation departments and an international presence, were able to boost their revenues and profits. “Generally speaking, one of the reasons for being a full-service, diversified firm is to be able to withstand the ups and downs of the transactions market,” said legal recruiter Avis Caravello. In the Bay Area, Morrison & Foerster remained dominant in terms of total revenue. The firm’s gross revenue edged up 7 percent in 2003, to $540 million. MoFo Chairman Keith Wetmore said the improving economy benefited the firm. “As we see the technology, venture capital and capital markets recover, those sectors of the firm that were hard hit by the recession are rebounding fabulously,” he said. MoFo’s busiest practices in 2003 included patent and securities litigation, Japanese cross-border work, “with mergers and acquisitions and capital markets coming on strong in the fourth quarter.” In spite of its leading performance in the region, MoFo slipped from 21 to 22 on the national chart. Heller Ehrman White & McAuliffe showed the most improvement among local firms. Revenues at the firm, which swallowed Venture Law Group last year, soared 22 percent, pushing the firm six notches up the chart, to No. 36. Orrick, Herrington & Sutcliffe also showed double-digit growth, improving 12 percent, with $448 million, and rising six spots to 29. “Our economic performance has improved every year for 14 years,” said Chairman Ralph Baxter, Jr., who credited a diversified and balanced practice for the firm’s financial success. “There is no single thing that spikes and drives our performance overall.” THE BIG PICTURE The top six AmLaw 100 firms held their posts from last year, led by New York’s Skadden, Arps, Slate, Meagher & Flom. But the calm belied tumult within the rarefied ranks. No. 3 Jones Day broke the $1 billion revenue bar, a 20 percent jump that landed the firm within striking distance of No. 2 Baker McKenzie. Even as Jones Day charged forward, it had to watch its back, where just $2 million protected the firm from losing its ranking to No. 4 Latham & Watkins. Regionally, New York and Washington, D.C., area firms remained dominant. Three firms debuted this year on the AmLaw chart, including Seattle’s Preston Gates & Ellis, Boston’s Fish & Richardson and Los Angeles’ Sheppard, Mullin, Richter & Hampton. Sheppard, Mullin flirted with the top 100 in 1999, when it ranked 101. Though its revenue increased steadily in subsequent years, its ranking fell as other players were simply growing faster and rising farther. This year, the firm’s diversified practice base helped boost its ranking. The demise of Brobeck, Phleger & Harrison also opened up a spot. Among outside firms with a large Bay Area presence, Pittsburgh’s Reed Smith reaped the benefits of its merger with Oakland’s Crosby, Heafey, Roach & May. The firm shot up 21 rungs, to No. 33, reflecting its 41 percent revenue jump over last year. Local firm leaders say their firms are seeing better times in 2004. Wilson Chairman Larry Sonsini said he expects activity at his firm — particularly in venture finance, corporate finance, M&A and private equity — to be strong into 2005. “The main thing is whether all of the sectors are gaining confidence and momentum at the same time,” Sonsini said. “And I think they are.”

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