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When Matthew Jacobs was ready to leave the Northern District U.S. attorney’s office, he wouldn’t accept just any law firm job that came along. Like many federal prosecutors shifting to private practice, he wanted into the lucrative field of white-collar defense. But he had special requirements: He didn’t want to be in anyone else’s shadow, nor did he want to be totally on his own. “The entrepreneurial challenge of building a practice appealed to me,” Jacobs said. “The downside… is you don’t have colleagues to bounce ideas off of, and you don’t have resources to take a big case.” Jacobs found a balance at McDermott, Will & Emery in Palo Alto. In January, he’ll become the firm’s first white-collar practitioner in the Bay Area, but he’s joining a national practice group that includes several former federal prosecutors. Jacobs’ career turn isn’t unique. In recent months, others from the local U.S. attorney’s office have agreed to kick-start the Bay Area white-collar practices of otherwise established firms. Recent notable private hires include Patrick Robbins, the former chief of securities fraud at the San Francisco U.S. attorney’s office, and Martha Boersch, who managed the organized crime strike force. Boersch went to Jones Day’s fast-growing San Francisco outpost. Robbins joined Shearman & Sterling, where he had worked as an associate before becoming a prosecutor. All three former assistants were brought into their new jobs as partners. The trend has a simple explanation. In high-stakes corporate lawyering, it has become essential for firms to have in-house experts to handle allegations of financial improprieties and other criminal troubles. And firms have figured out there’s no one better to investigate and defend white-collar cases than the people who used to prosecute them. Several firms with Bay Area offices already have white-collar sections, and many of those are populated by former federal prosecutors. But others are playing catch-up. Just as companies have figured out that allegations of wrongdoing are an increasingly routine hazard of doing business, law firms realize they need to offer white-collar services in order to stay competitive in the local game. The rising interest in white-collar practice follows a well-publicized uptick in federal white-collar prosecutions, particularly of securities fraud. In 2000, then-U.S. attorney Robert Mueller III created a local securities fraud section. Robbins pointed to local cases involving McKesson Corp., NVIDIA Corp., U.S. Wireless Inc., Ernst & Young, Network Associates Inc., Reliant Energy Inc. and, of course, Enron Corp. And more prosecutions are expected nationwide related to the 2002 Sarbanes-Oxley Act. “This firm has an incredible corporate client base,” Robbins said of Shearman & Sterling. “So there’s an opportunity � to persuade those clients who rely on the firm for corporate advice to also use the firm for regulatory and enforcement matters.” Robbins said a big part of his decision was his prior relationship with Shearman & Sterling. But he also likes the idea of the white-collar services growing around him. “Another reason I chose this firm was because I wanted to try to build a practice with a base that I thought had potential,” Robbins said. Robbins is talking about cross-marketing, a concept that is a no-brainer when it comes to offering white-collar representation alongside more traditional corporate services. But it hasn’t always been so. As recently as a decade ago, some large corporate firms resisted having an in-house person handle allegations of business wrongdoing. In the early 1990s, Rory Little headed the appellate section for the Northern District U.S. attorney’s office, but he was casting about for something new. He tried to convince a couple of big firms to hire him to start San Francisco white-collar practices, but they were unconvinced that the work could be profitable. Things are different now. “People have figured out the synergy that can come from this,” said Little, now a professor of criminal law and ethics at Hastings College of the Law. “It’s silly to not have at least one person in-house who can handle complex criminal matters. It keeps your existing corporate clients in-house � [and] it gives you leads into other corporate entities that you otherwise wouldn’t have.” Besides the obvious economic benefit of offering a panoply of services, firms have also realized that “good white-collar crime people are good litigators in general,” Little added. There is one major downside to bringing a former federal prosecutor on board — no book of business. With other candidates, not having clients would likely jeopardize the newbie’s chances of coming in as a partner. Not so for ex-federal assistants. Legal recruiter Charles Fanning Jr. of Major, Hagen & Africa, who helped place Boersch and also talked with Robbins and Jacobs, said a recent shift in partner models is benefiting prosecutors who make the transition. More firms, Fanning said, are favoring a two-tier partner structure: equity and non-equity. That allows them to bring in lawyers with the partner title without diluting profits. “It’s important for white-collar folks, particularly if they’re going to be the go-to person, to have the partner title,” Fanning said. “If you’re the [client], you don’t want any question in mind about the stature of your lawyer.” Fanning said that, in the past, many large firms tried to cover the demand for white- collar work with someone devoted to it only part-time. But growing law enforcement emphasis on white-collar crimes has created demand among clients, and the job market has responded, Fanning said. He’s seeing firms both locally and nationwide beef up their white-collar units. This has translated into more opportunities for him to place former prosecutors. Fanning knows many feds through his wife, Melinda Haag, who was a federal prosecutor before leaving to join the white- collar practice group at Orrick, Herrington & Sutcliffe. “I make a market for the right kind of candidate,” Fanning said, adding that he’s “absolutely” done that with former assistants. Law firms view former assistants as a special kind of investment. John Wilson, managing partner for Shearman & Sterling’s offices in San Francisco and Menlo Park, said marketing white-collar attorneys is “quite different” from other practice areas. Although assistants don’t bring business in the door with them, Wilson doesn’t worry about that. “It really is like ‘Field of Dreams,’” he said. “If you build it, they will come.” “In � the Bay Area, for us to be successful, and for us to really work efficiently with local companies when they have this type of matter come up, we simply can’t say to them, ‘No, we don’t have the individuals,’” Wilson said. Shearman has been in the Bay Area since 1979 and now has about 70 attorneys. Elwood Lui, partner-in-charge of Jones Day’s S.F. outpost, agreed with Wilson and said having someone to do white-collar in- house was “absolutely” a selling point for the entire firm. Complementary practice areas include transactional, technology, antitrust and trade regulation, Lui said. Jones Day, which began with a handful of lawyers in May 2003, now has more than 40 in San Francisco. Another new partner, John Cline, was brought in to handle white-collar work at the same time as Boersch. Boersch said so far the firm isn’t putting any pressure on her to get clients. But it doesn’t really need to. “I put a lot of personal pressure on myself all the time,” she said. Even with that, though, Boersch said the job is no more stressful than being an assistant. Boersch, Robbins and Jacobs are lucky to be getting on board as white-collar is really taking off. As the government goes after more white-collar cases, that means things will only get busier — and more competitive. Jacobs said that’s fine by him. “My impression is that the white-collar practice in the Bay Area has lagged behind other areas” including New York, Washington, D.C., and Chicago, he said. “In some ways, what we’re seeing now is the Bay Area catching up.”

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