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The Dallas office of Arter & Hadden once looked like one of the firm’s bigger mistakes. It was heavily dependent on FDIC work from the savings and loan cleanup that dried up overnight. But Mark Solomon, 40, rode to the rescue, retooled the office with laterals, moved into new practice areas, and made the office a success. He’s now being asked to dust off the white hat and do the same, as the new managing partner, for the rest of his troubled firm. The job won’t be easy. Although it’s big (more than 400 lawyers), Arter & Hadden doesn’t make a big impression on the national consciousness. Profits per partner for 1999 were down significantly, and satellite offices have been battered by defections. Solomon’s appointment is the latest indication that the firm’s center of gravity is moving from its Cleveland home to Texas and California. But earlier California moves were troubled. The firm made a strong move into that market in the early and mid-1990s, opening offices in San Francisco and San Diego. In the Los Angeles area, it opened two new offices, one as the result of a merger with an existing firm. The number of Arter & Hadden lawyers in the state grew from 66 in 1994 to 170 in 1999, driven by expanding transactional, intellectual property, and product liability practices. But the costs associated with opening offices and hiring laterals in California cut into profits, according to several former partners, and 15 attorneys left the Los Angeles offices in 1999. California may have suffered bumps and bruises, but the firm’s Washington, D.C., office is in intensive care. Since 1998 the D.C. office has shrunk from 81 lawyers to 49, taking significant hits in labor and antitrust. The firm is carrying an unwieldy partner-to-associate ratio of 2:1, and was forced to sublease part of its office space. Former partners in Washington blame the disconnected Cleveland management. “The laid-back Cleveland attitude won’t cut it in D.C.,” says one former partner. Others say that the compensation system was too Cleveland-centric, and failed to account for the tougher nature of the D.C. market. One gripes about “exporting profits to Cleveland to pay for partners that weren’t producing.” Steve Ellis, managing partner for most of the 1990s, disputes these contentions. “Cleveland outperformed the firm as a whole during most of the 1990s,” he says. “There may have been unproductive partners here 10 years ago, but no more.” The solution? “Stop paying unproductive partners at the expense of those bringing in money,” says one former partner. Into this mess rides the man from Dallas. Mark Solomon is a graduate of George Washington University Law School who specializes in M&A. He joined the firm in 1992 and has been managing partner in the Dallas office since 1996. His first priority: growth. He plans a push in the next six to nine months in Washington, Texas, and California. The firm is having “serious conversations” about merging with a firm of more than 200 lawyers, and talking about other lateral hires and smaller mergers. Profitability is next. Profits per partner for 2000 are up from 1999, but continued improvement may require unpleasant tasks such as cutting unproductive lawyers and imposing billable hour requirements. When asked, Solomon steers clear of those subjects, but admits, “We need to look at everything.” Not a pleasant prospect for a man universally described as “likable” and “a good guy.” The D.C. office is also high on his list. “It was one of the gems of the firm,” Soloman says. “We’ll do whatever it takes to build it back up.” The appointment of a relatively young attorney far from old-line Cleveland management seems to indicate that Arter has gotten a wake-up call. “The profitable [partners] have realized that the Cleveland management is dragging it down,” says one former partner. But now, there’s a new sheriff in town.

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