X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Attorneys at Robins, Kaplan, Miller & Ciresi like to say that they don’t practice law — they make history. Now their Washington office is history. Citing modern firm economics, the Minneapolis-based litigation firm announced last week it will close its 20-year-old D.C. office, the firm’s largest outside of Minnesota, as of Aug. 15. “Probably 90 percent of our lawyers practice in litigation and that does not require a Washington presence,” says Steven Schumeister, the firm’s managing partner. “We are in discussions with our lawyers in the Washington office as to their interest in remaining with the firm.” Robins Kaplan, a 2004 member of The American Lawyer‘s A-List, is widely known for having a peculiar business model that is weighted heavily toward winning large contingency cases. The most publicized was the $550 million in attorney fees the firm bathed in after representing the state of Minnesota in its 1998 case against Big Tobacco. That emphasis on contingency cases deviates from most other midsized, Midwestern firms that have headed East. The 250-lawyer firm is also known for name partner Michael Ciresi’s foray into politics. The heavily Democratic-leaning firm’s partner announced in April that he is running for Sen. Norm Coleman’s (R-Minn.) seat in 2008. The Washington office reflects the firm’s model, emphasizing contingency cases with specialties ranging from intellectual property to business litigation to health care fraud. But a 2006 internal firm memo shows that it was billing fewer hours than the typical dizzying sum D.C. lawyers are known for. The death knell came last week when eight attorneys, including office managing partner Keith Styles, announced they were departing for Arent Fox. The group also includes real estate partners Robert Falb, Barbara Needle, Richard Nettler, and four associates. “They were looking for a platform that is larger, deeper,” says Marc Fleischaker, chairman of Arent Fox. “We already had an existing real estate practice that has both litigation and policy. Their practices match up well with ours.” Fleischaker says a starting date for the group has not been determined but will come before the end of June. If this episode feels like a rerun for Robins Kaplan and Schumeister, it’s because in a way it is. In 1999, the firm scrapped its 15-attorney San Francisco outpost. “When we opened the office in San Francisco, we felt we needed to be physically in the city,” Schumeister told The Recorder, an affiliate of Legal Times, at the time, who then foreshadowed the firm’s rationale for closing its Washington office. “We just believe this is the best way we know how to . . . provide the most cost-effective structure for our clients.” In the current era marked by consultants, recruiters, and competition, the seemingly constant drive for growth is fueled by big-city firms such as Sidley Austin and Skadden, Arps, Slate, Meagher & Flom, which have more than 1,500 lawyers apiece. The rapid pace set by those mega-firms has placed greater pressure on regional firms like Robins Kaplan to expand in order to keep top-tier attorneys and blue-chip clients. And so Robins Kaplan’s efforts to move from regional player to a national behemoth is a familiar tale, with success most often dependent on the amount of money a firm is willing to spend. “There has to be a commitment to compete for top talent,” says the chairman of a Washington-based firm. “But for medium-market firms, that’s harder because they’re used to spending a lot less.” REGIONAL BLUES In the most recent Am Law 100, the American Lawyer‘s annual survey of the top-grossing firms in the nation, D.C.-based firms had an average profit per partner of $1.2 million. That’s less than their New York brethren and far ahead of the $400,000 in profits that partners at Robins Kaplan were taking home, according to former partners at the firm. For mid-market firms inside the Beltway, the roadside is littered with wreckage; look no further than fellow Minneapolis-based Dorsey & Whitney, which a few years ago had 55 District attorneys and today has four. But Robins Kaplan’s decision to pull completely out of Washington is a step beyond that typically made by other less-than-prosperous District ventures. Many firms keep at least a toehold in the District despite an office’s lagging income — if only to have the city’s name on their Web site and letterhead. Consultants point to Philadelphia-based Pepper Hamilton, and Kansas City, Mo.’s Shook, Hardy & Bacon as prime examples. “It’s just hard for mid-market firms to attract good people,” says Lisa Smith, a consultant at Hildebrandt. “They often end up staying steady. Growing becomes very hard, and many times they end up with disconnected practices.” Robins Kaplan never even reached Dorsey’s headcount in Washington. That lack of a critical mass, consultants and recruiters say, can lead to a permanent second-tier status, which in turn hampers the firm’s ability to compete in a market where raiding entire practice groups has become as routine a business practice as lunch at the Metropolitan Club. “There are unique skill sets in this city and they generally service the needs of a Washington client base,” says Avery Ellis, a recruiter at Mestel & Co. “Robins Kaplan on the other hand has a unique business model, and the facts speak for themselves about how successful that is.” Robins Kaplan’s decision to leave is all the more surprising because the firm’s interest in a Washington presence never appeared more set than when it moved into a new office, at 1875 Eye St. N.W., last November. The digs provided twice the space, leaving open the interpretation to current and former partners that the firm was going to expand the office’s headcount in the coming years. A former Robins partner said the upgrading and decorating cost the firm about $10 million. According to the lease agreement, the firm signed a 15-year deal for the new space in late 2005 at an annual rent of $1.75 million. “It’s like being in Atlantic City and doubling down on a hand — they just happened to lose twice as much,” says Ellis. THE FINAL BLOW Then Arent Fox came calling. Current and former partners say the departing real estate group represented more than half of the office’s revenue, a crucial loss for any business. Especially so at Robins Kaplan, which uses its annual revenue — without borrowing any money — to fund the large contingency cases that have become the firm’s trademark. Robins Kaplan came to the District in 1986. Current and former partners say the intent at the time was to build a traditional Washington office. In 1990, the firm acquired transaction boutique Levan Hawes Mason & Martin, with an eye toward it being a building block to a larger presence in the District. But that never materialized, primarily, consultants and recruiters say, because Robins Kaplan never showed enough financial love to top District talent, instead betting on contingency litigation. During the same decade that the Washington office was stagnant, the firm as a whole took on national prominence. Most notable was the firm’s 1998 victory against cigarette-makers, prompting Big Tobacco to pay out about $6.5 billion to the state of Minnesota and health care providers, which produced a $550 million contingency windfall. The firm was flush with cash. “If you’re going to come into a coast city and not compete at the levels of pay you see in those markets, then it becomes a huge challenge to get and keep talent,” says a current Robins partner. In 2004, the firm reached its national zenith when it was named to the American Lawyer‘s A-List of law firms. The list is a subjective grouping of the top 20 firms in the nation. Measurements include revenue per lawyer, pro bono work, associate satisfaction, and diversity. That same year the D.C. office took a hit when government regulatory partners Charles Hunnicutt and Harold Mesirow left for Troutman Sanders. In 2006, the firm lost anti-trust partner David Balto, former Federal Trade Commission policy director. All were hourly billers. “To build a Washington practice you have to build a core group of Washington clients,” says the former partner. “But at Robins the firm was all about trial work. The goal was to win a big contingency fee and then sit around, smoke cigars, and talk about your boats. The firm never had the right instincts.” Those instincts may be reflected in the office’s hourly billing. In a town where breaking 2,000 billable hours can induce shrugs because the guy in the office down the hall billed 3,000 hours, lawyers at Robins Kaplan were considerably less busy. According to a 2006 internal partners memo, the D.C. office partners billed slightly more than 1,700 hours each in 2005. Associates billed roughly 1,600 hours, a detail that shows that the leaders of the firm may have been content with its relatively low revenue numbers or that the work simply was not there. “They never committed to a Washington regulatory practice,” says a Washington recruiter. “It’s a bit like �Citizen Kane:’ They thought it would be fun to have a Washington office. But they never figured out what Washington is about.”
Nathan Carlile can be contacted at [email protected].

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.