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It may be a dry heat in Phoenix, but it’s also a hot legal market for some national law firms moving into the desert city to take advantage of the region’s flourishing economy. Ranked the fifth-largest city in the nation with 1.5 million people at the center of a metropolitan area of 3.8 million, Phoenix has the fastest-growing population of any major U.S. city, with professional and technical jobs creating the biggest surge in its employment sectors. Law firms new to the area want a piece of the thriving hospitality, real estate, construction, aerospace and electronics industries. But the influx of national firms means that some firms with long-standing practices in Phoenix are feeling a pinch from the competition. “The large national firms are competing for a relatively small number of people,” said Elliott Portnoy, chairman of Sonnenschein Nath & Rosenthal. The 658-attorney firm opened a Phoenix office in June 2006 with seven lawyers from Squire, Sanders & Dempsey. The focus at Sonnenschein’s new office is real estate and hospitality. Richard Ross, a former partner at Squire Sanders, heads the firmwide hospitality and leisure practice, which includes about 20 lawyers in Phoenix and in some of the firm’s other offices. Three other partners and two of counsel from Squire Sanders joined Ross in June. The group’s clients included Hilton Hotels Corp., Fairmont Hotels & Resorts Inc., Canyon Ranch and Vail Resorts Inc., among others. DLA Piper also recently opened a Phoenix office. In February, the 3,333-attorney giant started a practice with two partners also from Squire Sanders, Mark Nadeau and Cindy Ricketts. At the time of the launch, Nadeau said DLA’s move marked a “major shift in the area’s legal climate.” The firm plans to build on the international arbitration business that the two attorneys bring and expand the firm’s reach into the Southwest. Another law firm, Ford & Harrison, a labor and employment shop with about 190 lawyers, launched a Phoenix office in January. It brought in three partners � Richard Cohen, Stephanie Cerasano and Troy Foster � from Phoenix-based Lewis and Roca to create its 18th location. Cohen is managing partner. Four associates from Lewis and Roca also came aboard. Besides swiping lawyers from Squire Sanders and Lewis and Roca, new firms have lured attorneys from Fennemore Craig and Bryan Cave, among others. “There is some growth and some reshuffling,” said Stephen Savage, managing partner of Philadelphia-based Ballard Spahr Andrews & Ingersoll’s Phoenix office, which opened in August. He and partner Karen McConnell, both corporate lawyers, came from 160-attorney Fennemore Craig, a Phoenix firm founded in 1885 and formerly chaired by Savage. Mirroring economy The recent arrivals of national firms mirrors the changes in Phoenix’s economy, Savage said. In recent years, local big businesses, including some banks, have been bought out by national competitors. Indeed, some firms with entrenched practices in Phoenix have seen flat growth in recent years or even reductions in their attorney numbers. According to the NLJ 250, The National Law Journal‘s annual survey of the nation’s largest law firms, Bryan Cave, with 763 attorneys total, dropped from 78 Phoenix attorneys in 2001 to 65 in 2006. Kansas City, Mo.-based Stinson Morrison Hecker had 32 Phoenix attorneys in 2006 and 39 in 2002. And Milwaukee’s Quarles & Brady went from 136 attorneys in 2001 to 115 last year. Squire Sanders attorney Gregory Hall, who is managing partner of the firm’s Phoenix office, said the attorney census in his office is “a fluid number.” Last month, his firm added Bryan Cave corporate finance partner Frank Placenti. “There are people who make moves for personal reasons, and there are people who take a look at some of those opportunities at the other national firms,” he said. In 2001, the firm reported 84 lawyers there, and in 2006 it reported 59, according to the NLJ 250. Having the support and depth of 486-attorney Ballard Spahr was the determining factor in Savage’s decision to move, he said. Right away, his clients could tell the difference, he said. “One of the main attractions for Arizona lawyers to larger, out-of-state firms is the access to expertise,” he said. “It’s a more attractive arrangement.” Keeping the arrangement attractive for lawyers that Snell & Wilmer wants to retain is fairly simple, said Thomas Hoecker, a member of the firm’s executive committee and a partner in its Phoenix office. Snell & Wilmer, Phoenix’s largest law firm, has 448 attorneys in six offices. Overall, the firm has grown by 24% in five years. In 2001, the firm’s Phoenix office, its largest, had 202 attorneys. It now has 210. “If we stick to our knitting and concern ourselves with our clients, if we continue to have a place where people want to come to work in the morning, we’ll do just fine,” he said. Growing pains For firms new to the area, which has a tightly knit legal community, they may have some growing pains, said Hall of Squire Sanders. “The legal work and legal community in Arizona is a mile wide and inch deep,” he said. “It is still a maturing market.” Although national firms may be able to service their national clients that themselves have expanded into Phoenix, “it remains to be seen” whether the economy, dominated by tourism and real estate, can sustain a major push from additional firms, he said.

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