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More than 10 years ago, Steven Brill — then editor of The American Lawyer magazine — penned an essay on the coming decade for U.S. law firms. By the year 2000, Brill predicted, the market would be dominated by a group of 20 megafirms. Just two native Washington firms made his list of contenders for top-tier status: Covington & Burling and Hogan & Hartson. It’s hard to say that Brill’s predictions for the year 2000 have come to pass — scores of Washington firms continue to compete for sophisticated work nationally and internationally. D.C.’s Arnold & Porter, for instance, is one firm conspicuously left out of Brill’s calculation. Still, Covington and Hogan certainly remain industry leaders. But while the two firms had similar profiles in 1990 — each with about 300 lawyers and in the early phases of European expansion — their paths have diverged dramatically since. Covington has grown cautiously, ending fiscal year 1999 with 320 lawyers — just 50 more than it had 10 years earlier. Meanwhile, Hogan more than doubled in size and opened offices in 14 additional cities. In the past six months, Covington and Hogan – two of the oldest firms in Washington – find their paths converging again. Both have merged with small New York firms and redoubled their emphasis on technology. Which Washington firm is better prepared to thrive in the next decade remains to be seen. OLD VALUES, NEW ECONOMY Just over a year ago, in March 1999, Covington’s executive committee appointed an eight-member team to reflect on the firm’s future. The feeling at the time, says partner Andrew Friedman, was that Covington could not stay competitive simply by following the same track it had through the 1990s. “The committee was formed to figure out who the firm wanted to be and how we should go about getting there,” says Friedman. “We determined that in order to continue as one of the best firms in the nation, it would require taking some proactive steps.” Specifically, the group concluded that Covington needed to bolster its transactional and intellectual property capabilities or risk losing out on the business wave of a lifetime. Today, with a year-old office in San Francisco welcoming its first class of summer associates and a fall merger with New York’s Howard, Smith & Levin yielding lucrative deal work, partners are unfailingly optimistic. “We are not the same firm we were just a few years ago,” says managing partner Jonathan Blake. The changes at Covington go beyond geographic expansion. The firm has eased its historic resistance to admitting lateral partners, created a new three-member executive committee, and upped its billable-hour expectation for associates. In October, Covington, which had traditionally done very little advertising, hired a senior marketing director away from PricewaterhouseCoopers. The firm’s recent expansion follows a decade of near dormancy. Covington opened its London office in 1988 and its Brussels office in 1990. Partner profits remained sluggish as well, climbing a relatively modest 25 percent between 1994 and 1999, while other firms on Brill’s list saw profits soar dramatically in the late 1990s. At Akin, Gump, Strauss, Hauer & Feld, for instance, profits rose a remarkable 65 percent. To many, Covington’s move for greater domestic reach after a sleepy decade speaks volumes about the competitive pressures facing Washington firms. “I think of Covington as being akin to a Wall Street firm in terms of having a one-office mentality,” says Newport Beach, Calif.-based legal consultant Peter Zeughauser. “It’s a symptom of the times that a firm like Covington has moved into these other markets.” But Blake says that Covington’s aggressive strides are in keeping with firm culture. “There’s a constant instinct to go back and make sure what we’re doing is consistent to our core values,” he says. “One way to lose what is at this firm’s core is to just stand pat and not take new opportunities.” The opportunity that Covington hears calling now is the technological revolution. Every step the firm has made over the past year relates back to its desire to gain ground in the technology sector. While Covington is hardly alone in those ambitions, the firm’s San Francisco expansion in 1999 shows a commitment to the new economy many firms have not made. In fact, it was the Bay Area presence that sparked interest for partners at New York’s 60-lawyer Howard, Smith & Levin — a firm that had rebuffed many potential merger partners in the past. With the West Coast and Wall Street under its belt, Covington is again focusing on foreign expansion. Friedman says he does not expect the firm will ever have dozens of offices. He predicts Covington will continue making strategic moves into “the financial and regulatory capitals of the world.” Looking ahead, Asia and Germany are on the list of potential targets for future expansion. But don’t expect any announcements from Covington in the immediate future. “I think we’re kind of catching our breath at this point,” Friedman says. GLOBAL GROWTH As Covington regroups from offices four and five, Hogan tackles Nos. 16 and 17, which opened earlier this year in Miami and Tokyo. In addition, Hogan is integrating 35 laterals from New York’s Davis, Weber & Edwards — its largest single acquisition ever. For a firm that started the decade with 300 lawyers and just three mid-Atlantic offices, Hogan’s growth to more than 700 lawyers in 17 offices is staggering. About 40 percent of the firm’s lawyers work outside Washington. “They’re very quietly moving in to dominate the world,” jokes Avery Ellis, a local recruiter with Mestel & Co. Indeed, many observers refer to Hogan’s steady advances as quiet or “under the radar screen.” But expansion outside the Washington region has been an articulated focus within Hogan since the late 1980s. At a partners’ retreat in 1989, expansion was set out as the firm’s No. 1 new goal. “I think many of us believed that for a firm like ours to remain a top-tier firm, we needed to expand our international reach,” says managing partner Bob Glen Odle. By 1991, Hogan had opened five international offices: London, Brussels, Paris, Prague, and Warsaw. And it hasn’t stopped since. Among the firm’s recent ventures are outposts in Budapest; Boulder, Colo.; and Los Angeles. Hogan’s future moves may include opening an office in Brazil and expanding in Asia. “We have never set out to be a certain size,” Odle says. “Our strategy has been to have leading practices in a variety of areas. In most instances, that means continuing to grow and expand.” Though such rapid growth is expensive and can tear at a firm’s culture, so far Hogan seems to have avoided the usual pitfalls. Average profits per partner and revenue per lawyer have kept pace with other, less-expansive D.C. firms. On the personnel front, Hogan has not had to close any offices or suffered above-normal defections. Rather, it continues to be viewed as one of the city’s most civil and collegial workplaces. Zeughauser credits strong leadership from Odle, who visits each international office at least twice a year. “I’ve been told by laterals that we have brought in from other U.S. law firms abroad that they have already seen me more than they saw the managing partner at their old firm,” says Odle. “I don’t think you can overemphasize the importance of in-person contact.” Odle, the first full-time managing partner in Hogan’s 96-year history, describes the firm as being much the same as when he joined 34 years ago. But it’s clear some things have changed. “In 1980, we all knew each other and we knew each other’s spouses and we had dinners on Saturday night,” recalls D.C. managing partner Ann Morgan Vickery. “That was just a different world.” And as the times change, Hogan — no longer quite as nimble as it used to be — must adapt as well. Like Covington, Hogan is positioning itself to represent companies in the technology sector, both start-up companies and traditional clients reinventing themselves for the Internet age. The firm represented the Netscape Corp. in its merger with America Online Inc. and was counsel to five technology initial public offerings in the D.C. region last year — more than any other firm, according to D.C.-based Global Securities Information Inc. As the technology boom goes global, Hogan’s international reach may give it an edge. “I think a firm like ours has a terrific launching pad for this kind of practice,” Odle says. “There are infinite number of strategies to have an excellent law firm,” he adds. “I don’t think you’d find any Hogan & Hartson partners who would regret the path we have taken.”

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