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An exodus of sorts is taking place at Miller & Chevalier, one that has the 100-lawyer Washington firm taking a hard look at its future. Known primarily as a tax boutique, the firm has seen roughly 15 partners sprint away in the past 12 months, including a virtual meltdown of its international trade practice. “We still have a center of lawyers that you must have to build a law firm around,” says Marianna Dyson, managing partner of the firm since February. “But we know we’re a David in a field of Goliaths.” Motivations for the exodus vary. Some are client-driven. Some partners were seeking better pay � compensation at the firm ranges widely, from the top producers taking home $1 million to other partners earning as little as $250,000. And others were looking for relief from the tumult and turmoil recent life at Miller & Chevalier has brought. But all are tethered to the distinction between life at a small firm and life at a megafirm � and the ripple effect a merger can have on a law firm. Just last week, government contracts partners Angela Styles and Robert Nichols jumped ship for Crowell & Moring. Styles is the former administrator for federal procurement policy at the Office of Management and Budget. Nichols was with the firm for just over a year after arriving from DLA Piper. “We have a very deep and broad practice,” says George Ruttinger, Crowell’s government contracts chairman. “[The partners] said their clients came to them with antitrust and corporate issues that they didn’t feel Miller had the capability to service.” Former partners also say there are more Miller & Chevalier partners looking for a life raft, which could bring the firm to the verge of some sort of tipping point, when lawyers begin to leave for the simple reason that other lawyers are jumping. Perhaps that has already happened. “I just didn’t want to stay at a firm with that much upheaval,” says a former partner. “Better to get out early.” At that point, whether the firm likes it or not, perception is its current and future problem. “When you have this much instability,” says a Washington recruiter, “and everyone is coming to work thinking that the guy in the next office is talking to another firm � and you have every law firm and every recruiter in town going after these people � it becomes an intolerable situation.” To get through the situation, the firm has laid off staff to rein in costs and contracted with the Zeughauser Group for some outside counseling. “We’re trying to better position them in the market and make sure their brand stays strong,” says Peter Zeughauser, founder of the consulting firm. Despite the bloodletting, Miller & Chevalier says it is focused on moving forward � and loudly dismisses any suggestion that the firm should be looking for a merger. “We have to be extremely entrepreneurial when competing with larger firms for clients,” Dyson says. “We have no plans to narrow our practice areas. In fact, I’m looking for litigation associates.” MERGER FALLOUT The firm’s season of discontent can be traced to 2000, former partners say, when three of Miller’s top tax rainmakers � partners John Magee, F. Scott Farmer, and Richard Stark � left for McKee Nelson. The trio quite literally loaded up a semitrailer of client work � including Magee’s work for GlaxoSmithKline, which in the subsequent years has produced a deluge of work, including a 2005 case that is the largest single tax case in U.S. history � and drove off. After the blow to the tax group, Miller & Chevalier merged a year later with the 19-lawyer D.C. trade boutique Ablondi, Foster, Sobin & Davidow. The decision was facilitated by a friendship between boutique name partner Sturgis Sobin and Miller & Chevalier partner Samuel Maruca, who would go on to be the firm’s managing partner. At the time the move was seen as a boon for the firm’s international trade practice. The addition of the Ablondi lawyers brought the practice’s head count to 40. But it was a bad marriage, borne out by the fact that the practice today has dwindled to about 21 lawyers. “All of our challenges should not point to the Ablondi merger,” Dyson says. “But because we are a smaller firm, personalities and personality mix certainly matters.” Current and former partners describe Miller & Chevalier and Ablondi’s cultures as diametric opposites. Miller & Chevalier has long prided itself on being a lifestyle firm, with maximum business hours sacrificed, however slightly, for personal time. Both current and former partners say Sobin and many other Ablondi lawyers didn’t buy into that business model (which isn’t to say all Ablondi lawyers have left; a few are still with the firm, including former Ablondi name partner F. David Foster). Once Maruca ascended to managing partner and Sobin became chairman of the international group in August 2003, sources say, tensions within the firm worsened. “The Ablondi group kept pushing for any and all cross-marketing,” says one former partner. “Maximizing profits was also an issue. Everything would culminate with incredibly contentious discussions at off-sites between the tax and trade groups.” The first major defection amid the turmoil came in April 2006, when tax partner Alex Zakupowsky left, along with partner James Atkinson, for Winston & Strawn. Zakupowsky specializes in energy utility tax issues and took with him a book of business that included the Edison Electric Institute and the American Gas Association. “Alex was driven by clients wanting to be associated with a more full-service platform, and some of the bigger clients felt they could get more one-stop shopping,” says the former Miller & Chevalier partner. Zakupowsky did not return calls for comment. “A lot of people think the firm was badly managed,” says another former partner. “It appeared as though there was a lack of consensus about where the firm should go. Some partners didn’t feel like they were making enough money, and there were complaints that some people were carrying others that weren’t bringing in the work.” Over the following months, partners began streaming out. Last August, Michael Burton joined Arent Fox’s international trade group as a partner. In October, trade partner Duane Layton, who headed the international trade litigation group; counsel Sydney Mintzer; and associate Jeffrey Lowe left for Mayer, Brown, Rowe & Maw. Then, beginning last September, the firm lost the international trade practice’s top three partners, starting with Sobin, who left for Heller Ehrman. The previous spring, Sobin had resigned as practice chairman. He was replaced by Hal Shapiro, who moved to Akin Gump Strauss Hauer & Feld in March of this year, along with Greg Mastel, chairman of the firm’s government affairs section. “Sturge leaving was a mixed blessing,” says a third former partner. “He took business, but if he had stayed, the firm might have imploded.” In January, Jean Pawlow, previously a member of the executive committee, left for McDermott Will & Emery, taking associate Elizabeth Erickson with her. “The three main practices at the firm have nothing to do with one another for the most part,” says the third former partner. “They were just using the same office space and letterhead. I don’t think losing the trade and government contracts people will hurt in the end.” In April, William McGlone, Miller & Chevalier’s vice chairman, who had been with the firm since 1987, took off for Latham & Watkins. The move came at the same time that export control partners Lisa Prager and Josephine Aiello LeBeau moved to Wilson Sonsini Goodrich & Rosati. Prager had been with the firm for less than a year since moving from DLA Piper. A VOW TO PRESS ON Postmodernism is a term most often used to describe a dissatisfaction with modernist architecture; it railed against what was then the status quo and urged a return to more traditional elements. It also happens to be the new d�cor of choice at Miller & Chevalier � and the attitude of the new leadership, which will turn away from any semblance of being a general-service firm and re-emphasize Washington-based issues through its three core practices: tax, litigation, and international trade. “The international practice has been here since 1981,” says John Davis, head of the international group. “We’re trying to grow, trying to integrate the practice with a very Washington focus � the tax, government contracts, and litigation side.” In recent weeks Miller & Chevalier added to its international practice with David Christy and Chris Parlin, who joined from the Loeffler Group and practice before the World Trade Organization. Among both current and former partners, there’s a consensus that the firm is better for having Dyson in charge. Dyson, who has a tax and employee benefits practice, arrived at the firm in December 2004 from Baker & McKenzie. “I would be more worried if we didn’t have a really great core of loyal, strong lawyers,” says Dyson. “We’ve already gotten through this.” Which could mean that the biggest danger Miller & Chevalier faces is the rumor mill in Washington.
Nathan Carlile can be contacted at [email protected].

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