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More than two years after deepening its finance specialty through a merger, the San Francisco office of Chapman and Cutler seems to have no trouble landing new clients or bringing in more work from existing ones. Winning over first-year associates and lateral partners, however, has been anything but easy. Office co-leader Melanie Gnazzo, formerly managing partner at Gnazzo-Thill, which merged with Chicago’s Chapman and Cutler in summer 2003, said the aim of the union was to broaden the client base and beef up the office. Joining forces with the 200-lawyer finance firm has led to an exchange of connections and sharing of resources that has spawned more work for the firm. But the firm’s name recognition achieved in much of the rest of the country hasn’t yet reached the western shores. Paired with a nervousness about the relatively small branch office, Chapman has struggled to parlay national renown into local hiring. “I think it was a good fit, I think we’re heading in a good direction, but I wish we could find more associates,” she said � and more lateral partners. Since the merger, Chapman’s San Francisco office has not hired a single lateral partner. That is not for lack of effort. “There’s a limited number of lawyers in the Bay Area doing what we do,” Gnazzo said. “We’re very picky in recruiting.” Chairman Richard Cosgrove said the firm has been courting several top-tier lawyers for “quite a while” to beef up its public finance group. “The priority is to build [the office] by attracting top-tier laterals,” Cosgrove said. “We’ve been so selective, we would prefer to be patient rather than diluting our practice.” Cosgrove said he’d be happy to hire half a dozen laterals “if they were there.” Headquartered in Chicago, with an additional branch office in Salt Lake City, the firm caters almost exclusively to financial services companies. It provides corporate and transactional counsel to large lenders, investment banks, pension funds, insurance companies and institutional investors. Lawyers at the firm say they plan to take the model to the nation’s other money centers and open offices in New York and Los Angeles. For now, Gnazzo said, the firm’s Chicago partners are lending a hand to help with the increase in business. “Chapman has no problem recruiting in Chicago,” she said. The hiring situation is not much brighter at the associate level. Since 2003, Chapman has added one mid-level lateral associate, two first-year associates and one incoming first-year associate and has extended an offer to a mid-level lateral associate. This brings the total number of lawyers at the San Francisco office to 13. As a result, the Bay Area branch is broadening its recruitment reach to the East Coast and Midwest. Gnazzo said a genuine long-term interest in transactional work and finance is key to landing a job at the San Francisco office, where no litigation work is done. “The first question I ask [candidates] is, ‘Do you read the Wall Street Journal?‘” she said, adding that experience in the business world also helps. Chapman associate Jeffrey Browning was a vice president at Wells Fargo Bank before going to law school, and said the extra work experience and exposure to a corporate culture made him confident in his choice to work at a smaller specialty firm. Judging from what he’s heard from associates at other larger firms, Browning says, he doesn’t think there’s an earth-shattering difference between lawyering at Chapman and working at a corporate department in a mega firm. “I don’t know that there’s that much difference between what I’m doing and what other associates are doing,” he said. “Firms tend to be compartmentalized anyway, so if an associate is in the corporate practice, they wouldn’t be exposed to employment law anyway.” At the same time, Browning said, he understands the reasoning of a Boalt Hall School of Law graduate who is “obviously smart,” carrying “great credentials” and weighing two or three offers. “Orrick is the safer bet.” Roger Davis, head of public finance at Orrick, Herrington & Sutcliffe, said each national finance firm opening a branch in California has wooed the same lawyers and faced the same struggle trying to dislodge them from other law offices. “Now, to get the marquee players is very difficult,” he said. “The landscape has been scoured for the same people over the last five or six years, and there’s not an infinite number of people [in public finance]. For the most part, newcomers have not been successful.” This is especially true in public finance, he added. The good news is the financial services market is vibrant. Chapman has landed several new clients in the last few years, among them Bank of the West and the CalPERS pension fund. The firm also has expanded its work for existing clients, including giant Bank of America and Wells Fargo Bank. For the past 25 years, Chapman has ranked No. 1 among public finance bond counsel, according to Thomson Financial, a market research firm. Whereas Chapman secured 652 deals in 2005, its main competitor, Orrick, completed 474. “Chapman is a good firm and will be able to compete,” Orrick’s Davis said, adding that the California market is a gold mine for public finance. “California probably represents a disproportionate share of the national public finance market,” leading in both volume and diversity, he said. More bonds are issued here by state and local governments than in any other state, he added. Moreover, there are literally thousands of agencies issuing bonds at any given time. “That said, there are firms that have been here a long time and have established relationships with those governments,” Davis said. “It’s not necessarily easy or quick to get a foothold in the state.”

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