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LOS ANGELES � Littler Mendelson isn’t the only national labor and employment boutique in town. Several law firms that specialize in labor and employment work are aggressively adding lawyers and opening new offices across the country in an attempt to offer their specialized legal services on a national scale. In expanding their scope, the boutiques find themselves treading onto turf dominated for years by the nation’s largest labor and employment firm, Littler Mendelson. The San Francisco-based firm, with 617 lawyers, has been on a rapid growth spree in recent years, with 13 new offices opening since the beginning of 2005. But other labor and employment firms aren’t far behind. Ogletree, Deakins, Nash, Smoak & Stewart, with about 360 lawyers, has added six offices in the past three years. Jackson Lewis, which has more than 400 lawyers, added six.. Two Atlanta-based labor and employment firms, Fisher & Phillips and Ford & Harrison, have collectively opened more than a dozen new offices while expanding beyond the Southeast to cities such as Dallas, Minneapolis, Phoenix and Philadelphia. Ten years ago, Littler was the most well-known national labor and employment boutique in the nation while most of the other boutiques remained regional, said William Johnston, vice president of consulting firm Hildebrandt International. But that landscape is changing. “Now, because of the growth, because of the expansion, you definitely hear more about the other firms,” he said. Fallout from consolidation Much of the growth comes amid a rapid consolidation in labor and employment law as small boutiques began to face increasing competition from national firms and clients reduced the number of law firms with which they worked. Some firms, such as Seyfarth Shaw of Chicago and Epstein Becker & Green of New York, opted to add practice areas other than labor and employment. Others, such as Paul, Hastings, Janofsky & Walker, have retained substantial labor and employment departments. But for firms that wanted to remain labor and employment boutiques, “all of us, at the same time, began to realize that in order to make the cut with the big purchases we were going to have to be in more places,” said Roger K. Quillen, chairman and managing partner of Fisher & Phillips. Littler has been at the forefront of national expansion among labor and employment boutiques. In the past year, Littler has added about 140 lawyers, said Marko Mrkonich, president and managing partner at Littler Mendelson. The firm now has 41 U.S. offices, more than any other boutique by about a dozen. In recent years, the firm has ventured outside the country with locations in Shanghai, China, and Bangalore, India, to handle immigration processing for employees of its clients. But, Mrkonich noted, “we’re not big because we wanted to be big. It’s happened by virtue of the other things we’ve done.” He brushed off the notion that Littler faces more competitors from other labor and employment boutiques. In fact, he said, the firm competes as much with general practice firms as it does with other boutiques. National aspirations But lawyers at other labor and employment boutiques said their growth has been part of a strategy to compete nationally. “It was a strategic decision to grow,” said Joe Beachboard, a shareholder and chairman of the client services committee of Ogletree Deakins. “The leadership of the firm was united behind the concept that we needed to have a national capacity.” On Jan. 1, the firm opened new offices in Cleveland, Philadelphia and Pittsburgh. Beachboard declined to specify the potential locations of additional offices, stating that “we are in discussions with several groups and . . . we certainly expect we’ll open some more offices this year.” Ogletree now has 28 offices, the same size as Jackson Lewis. Jackson Lewis began a “renewed push” on its expansion about two or three years ago, said Michael Lotito, a partner in charge of client relations for Jackson Lewis. Last year, Jackson Lewis opened four new offices. “We are still in the very, very aggressive growth stages, and we do definitely have plans to open additional offices in key cities,” Lotito said. At Fisher & Phillips, said Quillen, “we began to feel this pressure from clients who were consolidating and shrinking their list of approved service providers.” At that time, in 1999, the firm had four offices. In the past 2 1/2 years, Fisher & Phillips has opened six new offices, most recently in Philadelphia last month. Quillen said the firm is talking to lawyers to open more offices this year in the Northeastern and Western regions of the country. Not all firms pointed to strategic decisions as reasons for their growth, however. In the 1980s and early 1990s, Ford & Harrison opened offices in Los Angeles and Washington to accommodate specific clients, said C. Lash Harrison, managing partner of Ford & Harrison. But clients stopped paying to fly lawyers to their locations; as a result, the firm began to open more offices, Harrison said. “To say that was a strategy is probably a mistake,” he said. “It just was a natural evolution of things.” The firm, which opened two offices this year, has about 180 lawyers in 18 offices. Harrison said he expects to open offices soon in the Midwest, the Pacific Northwest, California, Texas and the Southwest, possibly Las Vegas. In adding offices, several of the national boutiques have arrived in the same cities at about the same time. In January, for example, both Ogletree and Littler opened an office in Cleveland. That same month, Ogletree opened a Philadelphia office, followed by Fisher & Phillips about three months later. “They often follow each other,” said Johnston, at Hildebrandt. “One will go into one market and, before you know it, the other is in the same market.” But few of the lawyers admit such competition. Mrkonich of Littler said his firm began talking to lawyers in June 2006 about opening a Cleveland office � long before Ogletree opened its office there. “We don’t have a road map of what other firms are doing, nor do we focus on what other firms are doing,” he said. “It’s not as if we sat down and said, ‘Where are other firms having offices we don’t?’ “ Beachboard of Ogletree agreed. “We’re not looking to where Littler has opened an office and said, ‘We need to open an office.’ That has not been the strategy,” he said. Big arrival, big response Instead, he said, lawyers at small labor and employment boutiques in those cities face increasing competition when one of the national firms opens an office in their market. In response, they turn to other national labor and employment boutiques that might open their own office there. Quillen of Fisher & Phillips said that lawyers at his firm paid little attention when Ogletree opened its Philadelphia office. But the lawyers who ended up joining the firm’s Philadelphia office contacted Fisher & Phillips five weeks later. Geography plays a critical role in retaining clients. Elizabeth Ganiere, corporate counsel at Champion Enterprises Inc., the largest U.S. builder of manufactured homes, said Ford & Harrison used to serve as outside counsel for the company’s employment lawsuits. But Champion switched a few years ago to Jackson Lewis after closing plants in the Southeast. One big reason: Ford & Harrison didn’t have an office in Pennsylvania, where Champion has four remaining plants. “The travel costs had become so onerous,” Ganiere said. Plus, having lawyers in the same state helps in deciphering the nuances of employment claims, which differ from state to state. As a result, many national labor and employment boutiques have staked claims in most major cities while expanding into some relatively obscure legal markets, such as Mobile, Ala.; Melbourne, Fla.; Fayetteville, Ark.; and Spartanburg, S.C. “It’s the nature of labor and employment law,” Beachboard said. “Just about every market or region has labor and employment law issues because every market and every region has companies and employers.” Lower rates The boutiques are growing amid a rapid rise in employment litigation, particularly class actions. “We’re in the midst of an employment law revolution in this country,” said Lotito of Jackson Lewis. “These companies are looking for firms to help them to strategically control risk.” Specializing in employment work helps the firms compete for clients and for lawyers. Susan Hoffman, a shareholder in the Philadelphia office of Littler, said she joined the firm in January after nearly 20 years at Pepper Hamilton of Philadelphia. She said she was attracted to working with 600 lawyers who specialized solely in employment and could handle more complex legal issues. She also said her rates were $50 higher per hour at Pepper. “When I was pushing $600 at Pepper, that was going to be a tough sell,” Hoffman said. In general, lawyers at national labor and employment boutiques estimate that general practice firms charge rates 10% to 30% higher than those at their own firms. For several lawyers, clients are less willing to pay the higher rates. But not all employment lawyers are drawn to national boutiques. Stuart Newman joined Seyfarth Shaw’s Atlanta office last year after founding the Atlanta office of Jackson Lewis 28 years ago. He said Seyfarth Shaw’s labor department has 350 lawyers, a size that is comparable to that of his former firm and other boutiques. As a lawyer focused on union relationships, having access to lawyers in other practice areas, such as employee benefits, is a “tremendous advantage,” he said. But, more importantly, “Seyfarth works on the more complex or more difficult, higher profile traditional labor situations than do the other firms,” he said.

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