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When Richard Ross and his band of real estate lawyers broke away from Squire, Sanders & Dempsey to help establish a Phoenix office for Sonnenschein Nath & Rosenthal, the move marked the end of a 17-year relationship between Ross and his old firm. At 54, Ross had risen through the ranks at Squire Sanders to become head of the 804-attorney firm’s hospitality practice, and leaving it was an emotional two-year process, he said. But in the end, new opportunities, client demands and the need for support prevailed over the allegiance that he had to his former shop, which he left last month. “Loyalty is something that is not blind,” he said. Ross’ lateral move is one of dozens that have occurred at top firms in the last few months and is part of a growing trend in lateral hopscotching among attorneys nationwide. Last year, 2,429 partners left their firms for perceived greener pastures, compared with 2,081 departures in 2004, according to The American Lawyer, an affiliate of The National Law Journal. That tendency of partners to pull up stakes has firms trying a variety of approaches to foster loyalty. But it remains uncertain whether those efforts can overcome the lure of the mighty dollar that often draws lawyers away. Just in the past two months, lateral moves among big firms include the departure of 23 Latham & Watkins attorneys to the New Jersey and New York offices of Washington-based Patton Boggs; J. Hovey Kemp and two other private equity partners from Washington-based Hogan & Hartson to the Washington office of Boston-based Goodwin Procter; Adam Hoffinger, former chairman of DLA Piper Rudnick Gray Cary’s white-collar crime practice, to the Washington office of Morrison & Foerster; a six-lawyer Latin American practice from O’Melveny & Myers to the New York office of Latham & Watkins; and five partners from New Orleans-based McGlinchey Stafford to the Jackson, Miss., office of Baker, Donelson, Bearman, Caldwell & Berkowitz. “Ultimately, this is an age where people can go next door at any time,” said Cesar Alvarez, president and chief executive officer of 1,482-attorney Greenberg Traurig. Because ethics rules prohibit law firms, unlike other businesses, from requiring their workers to sign noncompete and nonsolicitation agreements enforceable if they leave, attorneys generally are freer to move about than other professionals, Alvarez said. That, coupled with explosive growth that has changed the composition and culture of many law firms, likely accounts for the increase in lateral activity. Greenberg Traurig is one of those firms that has experienced rapid expansion, growing mostly organically from 812 attorneys in 2001 to 1,482 in 2005, according to The National Law Journal‘s annual survey of the nation’s 250 largest firms. The firm had 650 partners last year, compared with 579 in 2004. One of the keys to preventing lateral defections, Alvarez said, is to keep attorneys from feeling isolated. When partners feel like they do not have support and help from colleagues and management, they start eyeing the exits, he said. But a collaborative environment is not the same as a democratic one. Greenberg Traurig does not have a management committee and operates under a closed compensation system, where salaries and bonuses are not disclosed. “In a law firm, anything where you have visible winners and losers is a negative for collaboration,” Alvarez said. In addition, the firm generally does not take votes on issues, leaving much decision-making to Alvarez and practice leaders. Putting firm decisions to a vote, he said, forces partners to choose sides and leads to infighting. And having a management committee leads to politicking by attorneys wanting to make partner or from partners wanting preferences for their practices, he said. Alvarez maintains that such divisiveness erodes collaboration, which, in turn, undermines loyalty to the firm. Los Angeles-based Sheppard, Mullin, Richter & Hampton takes a much different approach. A democratic partnership is “steeped” in the firm’s culture, said administrative partner Robert Beall, who practices from the Orange County, Calif., office of the 378-attorney firm. Sheppard Mullin, which has an open compensation system, had 158 partners in 2005, compared with 167 in 2004. “We vote on a lot of things,” Beall said. “Everyone is involved.” Giving partners a vote in all “material initiatives” is critical to maintaining loyalty, he said. “If you all know where the ship is headed, you’re all more eager to get on the oars and take it there.” Growing leads to changing Issuing an oar to every partner, however, seems to be getting tougher. As firms get bigger, they may more closely reflect not a partnership, but a corporate structure with a top-down management style like that of their clients. The consequences, say some observers, are attorneys whose job title may say “partner” but who feel more like a cog in the wheel of the law firm machine. Indeed, whether a law firm operates as a de facto corporation, even amid a partnership structure, is the question plaguing Sidley Austin in a case brought by the Equal Employment Opportunity Commission regarding the firm’s mandatory retirement policy. The central issue at stake in the case, which other law firms are closely watching, is whether the partners functioned as employees in the firm, which could make the firm subject to federal age bias laws. But the degree of partner input in decision-making is just one factor for attorneys pondering a move, said Christopher Stief, co-chairman of Saul Ewing’s employee defection and recruitment practice group. He said that as law firms begin to look less like college fraternities and more like the general population, partners may have less allegiance to the frat house. “Subtle evolutions” at law firms over time whittle away a partner’s devotion to a firm, whether they are management changes, office locations or increased conflicts of interests among clients, said Stief, who also serves on the Philadelphia-based firm’s lateral integration committee. In addition, Stief points to the diminished stigma of partners who leave firms. “You’re just not seen anymore as a pariah who abandoned your colleagues,” he said. Firms that provide attorneys with the opportunity to advance their practices garner the most loyalty from partners, he said, adding that such loyalty is not simply a function of a partner’s ability to make money. The notion of advancing a practice may include the variety and sophistication of services the firm can offer clients, the amount of support help a practice receives and the degree of collaboration attorneys have on projects. Moreover, he said lawyers who switch firms thinking they will enjoy a huge increase in business often find that, over time, the move does not radically boost their income. “It all settles out,” he said. And for those attorneys who leave their firms, it is a “wrenching decision” for most of them, he said. Ross, who left Squire Sanders to join Sonnenschein, agreed. “I had developed strong, deep roots. It was a very emotional process to think of pulling those up.”

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