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Chart: London Calling – California Firms in London. Barry Levin and Matthew Larrabee, the former and current chairs of Heller Ehrman White & McAuliffe, have long talked of opening a Heller office in Europe — preferably in the U.K. The San Francisco lawyers even went for a holiday in Ireland last year. They say they didn’t hop over to London to visit any merger candidates, though they did practice a skill essential to impressing partners: golf. But opening a London office — considered as essential as New York for global firms — promises to be tougher than your average 18 holes. “It’s a hard thing to break into a new country or continent,” Larrabee says. “Nobody’s confused that it will be easy or simple.” As the last of the big California firms to place its flag in Europe, Heller’s journey is expected to be especially difficult. As it weighs opportunities, it can choose any one of several well-worn paths — and that’s part of the problem. “My own view is that if you wanted a seat at the table, you had to get there years and years ago,” says Tower Snow, former chairman of Brobeck, Phleger & Harrison � speaking of “any law firm” making its entry into London today. “It would be a niche presence — absent something extra-ordinary.” Heller’s leaders say it can be done, pointing to their success in New York. “We came in by doing a small merger and went from 0 to 100 in five years by growing organically,” says Paul Downs, who directs Heller’s international strategy. “That’s a vision we could see replicating in London, although not the only one.” Still, American lawyers in London have learned that Big Ben does not equal the Big Apple. Lateral recruiting is especially difficult and the rules of play often give English firms a competitive advantage. They can impose “garden leave,” prohibiting a departing lawyer from practicing law for up to six months before joining a new firm. And “non-compete” provisions can prohibit partners from working with clients from a prior firm. Morrison & Foerster Chairman Keith Wetmore says only after 25 years in London is his firm able to retain a sizable group of lawyers. “Our first two decades, we were most successful as a job placement agency,” says Wetmore. Recently, the firm has hired away from both British and American firms. For instance, the firm recently poached groups from Shaw Pittman and Weil, Gotshal & Manges as well as a corporate partner from Simmons & Simmons. Other latecomers to the market have struggled to grow organically, says Martha Sellers Klein, former editor of Legal Business Magazine and a consultant with Mlegal Consulting Inc. The consulting agency, based in Palo Alto, sees enough of a need in the London market to plan on opening an office there to help Bay Area clients. Klein suggests the fastest way to get established is through a merger. Kirkpatrick & Lockhart, for example, has over 130 London lawyers after combining with Nicholson & Graham. Of the California firms, Latham & Watkins has had the most success. Many point to the firm’s brand recognition and profitability. “London lawyers look very carefully at PPP numbers,” says Morgan, Lewis & Bockius partner Thomas Kellerman, who worked at London-based Brobeck Hale and Dorr. “The U.K. legal press market is so crowded, and you are constantly barraged with financial information about the firms.” Latham partners also point to their substantial investment in Europe. “The office started in 1990 as a small project-finance outpost for Latham & Watkins but didn’t really take off in size until 1997 or 1998,” says Bryant Edwards, head of the corporate practice in London. “We’ve gone from a dozen lawyers to a hundred in London, and during the same time, we’ve opened very large offices in Paris, Germany, Brussels and a small office in Milan.” And Latham played to its strengths. For instance, the firm derives 35 percent of its revenue from litigation, says John Hull, head of the firm’s litigation practice in London. It made sense to replicate that formula in the U.K., even though litigation hasn’t been priority for American firms in London. Hull points to American shops known for litigation — among them Morgan, Lewis & Bockius; Debevoise & Plimpton; and White & Case — that have followed similar strategies. Heller, known for its litigation strength, lists international arbitration as one reason it wants to expand. The practice is becoming popular with American firms in London, says Claire Smith, a London-based consultant. And Heller’s work is increasingly international. The firm handled the defense of Deloitte & Touche in its role auditing the troubled Italian company Parmalat Finanziaria S.p.A. Heller also hopes to transport its transactional practices to Europe. It recently represented non-U.S. aspects of Northrop Grumman’s $4.7 billion sale of TRW Automotive — a matter that involved closings in 10 different countries. Ultimately, Larrabee says Europe follows naturally from the firm’s expansion into Hong Kong and China. A final strategy for American firms, and one Wetmore says has worked for MoFo, is focusing on practices that are not the traditional strengths of the English firms. “I think we are becoming known in London as a first-tier life-science shop,” he says. Other firms have complemented their London presence by opening offices in other European markets. “The little victories are what’s amazing,” Klein says. “Paul Hastings acquired Moquet, Borde & Associes. Orrick pulled in a strong Paris team.” But London is the prime destination. “You can’t be a serious law firm and not think about being in New York and London,” says Orrick, Herrington & Sutcliffe Chairman Ralph Baxter Jr. “You have to take the long view and be persistent and patient.” That seems to be Larrabee’s plan. One thing’s for sure. The firm plans on making a big splash. You can’t go to London, Larrabee likes to say, “with two lawyers and a dog.”

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