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Helping clients find the right approach to take with government alcohol regulators can be like choosing the right wine for dinner: stressful, complex, and you don’t have all day. That’s why Pillsbury Winthrop Shaw Pittman hired Jerry Jolly, a 31-year veteran of the California Department of Alcoholic Beverage Control, as a nonlawyer consultant for its five-person wine, beer, and spirits practice group earlier this year. “[Jerry]‘s provided us valuable insight on the way that the agency makes decisions,” says James Seff, a longtime Pillsbury partner who heads the practice from San Francisco. “There was a surprising amount that I didn’t know.” While nonlawyer industry experts have populated some practice groups for at least a decade, like in the science-heavy IP arena, now they’re being hired in new areas. “In part to differentiate themselves, [firms] are looking to less traditional areas to bring them in,” says Susan Raridon Lambreth, a practice group expert with legal consultancy Hildebrandt International. For alcohol lawyers the argument is simple: Consultants provide expertise, most often on regulatory and compliance issues, to their practice group, and they usually bill out at a far lower rate than attorneys. “What people are seeing is that as you build groups you just can’t charge lawyer rates for some of the work that needs to get done. But it’s really important work — it’s essential,” says Robert Carrol, the San Francisco Nixon Peabody partner who heads his firm’s beverage alcohol team. Carrol’s firm just added three new consultants in June, including wine trade expert Jeannie Bremer in the San Francisco office, bringing the group’s head count to 10. While attorneys in the group bill out from $400 to $500 an hour, the consultants bill out at around half that, Carrol says. DRUNK WITH SUCCESS At Pillsbury and Nixon, lawyers say that they’re seeing more work in the practice area — in part, spurred by the new hires. “Since January the phone hasn’t stopped ringing,” Seff says. “Some of it is Jerry. Much of it is old clients with new problems. The practice is waxing right now.” For example, Seff points to his representation of private equity firm TowerBrook Capital Partners as special liquor counsel in its purchase of Beverages & More. Nixon lawyers also report more matters for real estate investment trusts that need all their liquor licenses in order when buying or selling properties, which can include resorts and restaurants. Still, the bread and butter of the practice remains commercial disputes and trademark, contract, and regulatory work. Perhaps the most nettlesome regulations are the so-called “tied house” laws that restrict cross-ownership of suppliers, wholesalers and retailers. These alcohol industry regulations (which originated with the Prohibition repeal), as well as many others aimed at curbing alcohol use, vary from state to state, so new companies on the California scene come to the lawyers — and now the consultants — for advice. “It’s a lot of the same issues, but you just have different players in the California market,” says Pillsbury’s Jolly, who works in the firm’s Sacramento, Calif., office. So far, he’s consulted for Anheuser-Busch Inc. and other clients on marketing and distribution issues. He’s also prepared a training program for Rite Aid clerks on things like proper ID checks. Manny Espinoza, who preceded Jolly as the ABC director and joined national firm Holland & Knight as a consultant in 2004, says veterans in the field are able to spot problems before they occur. That could mean finding a potential violation of tied-house rules in an acquisition or red-flagging a new beer marketing campaign that could be perceived by regulators to be targeting minors. “Our strength is our experience we’ve had within the system,” says Espinoza, who works from his home near the California capitol. “We’re able to recognize issues before they become a problem.” POST-GOVERNMENT HANGOVER Consultants can face a few obstacles to landing successfully at a law firm. Former government officials, like Jolly and Espinoza, aren’t allowed to lobby their former agency until a year after retirement. Jolly’s year is up at the beginning of September, and Espinoza’s is already past, but Espinoza says he won’t do it anyway. “I really don’t like the lobbying part,” he says. “[Those are] folks I used to work with. I find that part distasteful.” Another challenge is being accepted as an equal by the lawyers, said Hildebrandt’s Lambreth. “The firms that have done it best recognize that, �I as a lawyer am no better than my colleague that’s an industry expert,’ ” she says. Finally, since consultants aren’t lawyers, they must be careful not to overstep their bounds. All their work, like that of a paralegal, must be signed off on by lawyers. “I’m supervised by an attorney — everything I do for the clients is approved by [Nixon Peabody lawyer] Vince [O'Brien] and sent out by Vince — everything goes through him,” says Nixon’s Bremer. Pillsbury and Nixon lawyers say the recent hires, combined with an increase in work, mean that the practice groups are looking to expand. “Now that we’re here and have critical mass we’re going to continue to grow,” says Nixon’s Carrol. Even with a bump, the practice area does have its limits, lawyers agree. “It’s not the kind of practice that’s going to end up with 20 lawyers and 50 consultants because there’s not that many clients to go around,” Carrol says. But even though it’s not the biggest practice for any firm — and only a handful of big firms have one — the alcohol lawyers are always the most adored when it comes time for a firm party. “We don’t do barter, but we are real popular when it comes to events around Nixon Peabody,” says Carrol, laughing.
Zusha Elinson is a reporter for The Recorder , an ALM publication.

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