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Robert Zeavin was scrambling to finish work the day before leaving for a World Cup Soccer match in Munich earlier this month. Even so, the head of Steefel, Levitt & Weiss’ litigation group set aside three hours to mentor associates. “I’m not sure two or three years ago I would have � a day before I flew to Germany, when I’m really, really grinding � spent two to three hours debriefing the associates,” Zeavin said. But these are no ordinary times for the firm. Since January 2005, 11 partners have left, including two who announced their departures this week. Most have left for large national firms. Though Steefel has brought in or promoted eight partners in that time, the firm, which five years ago claimed 80 lawyers and had plans to grow to 120, is down to 65. On one day in September 2003, the firm announced the arrival of four associates. Only one is still at the firm. Which is where Zeavin’s extra effort comes in: A renewed emphasis on mentoring is part of a professional development plan adopted by the firm as it seeks to make itself more attractive to lawyers and clients at a time when both are gravitating toward national firms. “We’ve become considerably more available and present to mentor and talk with our associates and occasionally young partners, exposing them to certain types of trial work, depositions, work that we’re not billing our clients for,” Zeavin said. Back in 2000, Steefel, best known for its real estate practice, announced plans to expand its three core practice areas: real estate development and finance, business and taxation, and complex commercial litigation. In 2002, the firm opened an office in Los Angeles. The firm had several early successes. But it’s had trouble holding onto lawyers. On Monday, Reed Smith said Steefel partners Harvey Leiderman and Mark Fogelman will start there July 1. Fogelman, who joined the firm in 1998, was a member of Steefel’s board of directors. Leiderman, who has been with Steefel since 1988, was once managing partner. For a firm of Steefel’s size, the rapid partner turnover is troubling. “That is greater than normal attrition or retirement,” said Mark Hennigh, a real estate partner at Greene Radovsky Maloney Share & Hennigh, a Steefel competitor. “I don’t know that it’s threatening for them, but it’s got to be unpleasant.” Steefel is struggling against the same market forces faced by all midsize firms. “Clients are consolidating, and the market for legal services is requiring that firms increasingly be able to service clients in a variety of ways and in various geographic markets,” said Michael Coffino, a litigation partner at Steefel who left for Reed Smith in March. “One of the things that attracted me to Steefel was that they were able to survive as a small firm,” Coffino said. “The question is, will they be able to continue doing it?” Steefel’s leaders think so, and the firm vows to remain independent. “Consolidation in the market helps us,” said James Eastman, the firm’s managing partner. For example, larger firms have “shunned the real estate practice,” he said, playing into Steefel’s hands. The firm’s leaders downplay the departures, and say morale is not a problem. “People who are unhappy leave,” said Chairman Barry Lee. “The people who stay are happy.” Observers say midsize regional firms like Steefel can prosper indefinitely � as long as they can retain or replace big-book partners. “The question becomes relevant if they lose a few more rainmakers. Can they effectively recruit lateral partners to make [the firm] competitive?” recruiter Larry Watanabe said. “This firm model works [but] it’s a fragile model, because if you have a couple of key rainmakers that you lose and can’t replace them, it can create a problem.” Lee said growth in the firm’s key practice areas has helped mitigate any losses. “Lately more growth is from real estate and wealth management,” added Eastman. Though the firm won’t release financial data, Lee said the firm’s revenue in the fiscal year that ended in January was better than the prior year, and the coming year will be better still. And firm leaders say they aren’t overly reliant on any one partner for business. “We’re fortunate that the revenue production of the firm is spread out among the shareholders and to a good degree the associates,” Eastman said. An eye on growth Steefel formed in 1980 when its three name partners split off from Dinkelspiel, Steefel, Levitt, Weiss & Donovan: Litigator Lenard Weiss, real estate lawyer Edward “Ted” Steefel (who died in May 2002) and tax attorney Alvin Levitt had practiced together since 1963. “Our strength is that we are litigators, not just administrative law types,” Weiss said. With eight lawyers in Los Angeles, two in Stamford, Conn., and the rest in San Francisco, Steefel is far from a full-service, one-stop shop. Instead, firm leaders pride themselves on offering top quality expertise at a cost lower than its national competitors. Christine Shingleton, assistant city manger of Tustin, said Steefel’s lawyers have been “exemplary in the service they’ve provided.” Shingleton, who said she generally works with smaller and midsize firms, said Steefel has represented the city since 2003 in a mixed-use development project of 4,600 dwelling units and 10 million square feet of nonresidential space. “They have particular expertise in real estate working with lenders, understanding the interest of private development parties and balancing that with the interest of public agencies.” The firm also is representing Verizon Wireless in Santa Clara County Superior Court over the enforceability of a utility user tax, and it previously helped Orange County fend off a $500 million property tax refund threat. It is also representing the city of Tustin in converting a Marine air station to what’s going to be the centerpiece of the town. Some of its biggest and oldest clients include the Union Pacific Railroad; the Estate of James Campbell, a 106-year-old private trust with real estate assets valued at $2.3 billion; and Wal-Mart Stores Inc. Its real estate projects include everything from residential housing and corporate campuses, to industrial properties and vineyards. Attorneys in the real estate group work closely with the firm’s business and tax, environmental and natural resources and other groups. Steefel’s litigation group handles complex commercial cases from inception through trial. Its clients cover the gamut of sectors, including technology, communications and financial services. Steefel has tried cases involving securities, employment, class actions, insurance and environmental, among others. Steefel started concentrating on growth in 2000. The firm had early successes, such as the 2001 hire of well-known San Francisco land-use attorney Timothy Tosta, Judy Davidoff and six other lawyers from Baker & McKenzie, and the addition of an 11-lawyer group from the now-defunct L.A. boutique Tatro, Coffino, Zeavin & Bloomgarden. In 2003, the firm recruited regulatory partner James McTarnaghan and securities class action lawyer Clyde Wadsworth. But in the spring of 2005, long-time securities litigation partner Michael Lawson took the bulk of his broker-dealer work to Morgan, Lewis & Bockius. Partners Daryl Landy and Joseph Floren soon followed him. Wadsworth and McTarnaghan have left, too. “The fact that [Lawson] was a senior, well-liked partner in the firm made the move more problematic from the perception standpoint,” Zeavin said. “Mike had a very large book of business, [but] the bulk of it was in an area of practice that had pricing issues.” The larger concern with his departure, Zeavin said, was trying to bring “perception in line with reality.” Since January 2005, the firm has hired litigation partners Michael Gevertz and William Murphy and real estate partner Elizabeth Strahlstrom. Internally, four lawyers were promoted to partner, including litigators Brian Hafter and Amy Briggs, real estate attorney Adria Cheng and regulatory attorney Lori Dolqueist. One former partner, Lisa Carvalho, returned to the firm after a child-rearing hiatus. Though the last few years have been stop and go, Lee said they haven’t curbed the firm’s ambition. In mid-2004, Steefel put together teams of senior lawyers and staff to visit important clients and find out how the firm is doing and how it could improve. “This is not a marketing function,” Eastman said. “It is not directed at selling services.” Instead, he said, it leads to bonding with clients and promotes business development. “It continues to be our objective to see continued growth in our firm,” Lee said. “The size that I think Steefel can do a good job at is a firm of 110 to 125 lawyers.” Mentoring is part of a plan to attract them. In April, the San Francisco Business Times named Steefel one of the best places to work in the Bay Area. Zeavin said that when he returned from Germany, he’d get back to the task of persuading partners and associates that the departures have created opportunities. “You talk to your associates and to partners who are less involved in management,” Zeavin said, “and you tell them: Now go out and see what you can do.”

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