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Two Troutman Sanders project development and finance partners have left for Paul, Hastings, Janofsky & Walker, taking some Mirant Corp. work with them. Robert C. Marshall and Michael A. Lueder say they switched firms because of conflicts that arose when Troutman Sanders’ megaclient Southern Company spun off Mirant Corp. (formerly Southern Energy) into a separate, independent entity in April. “I frankly just underestimated the impact of the spin on our relationship,” Marshall says of his connection to Mirant. “Mike and I both had excellent careers at Troutman. It’s an excellent firm. We just noticed the closer we got to the spin, the more difficult it was, not on the legal end but on the business end. … It just seemed to us that our practice was being limited by the spin.” Mirant’s business-side leaders were reluctant to use Southern Company lawyers on their deals, he says. Southern Company owns large, regulated utilities such as Georgia Power that have fundamental competitive differences with independent power producers such as Mirant, he says. Marshall, who spent 13 years at Troutman, compares those differences to the conflicts in the telephone industry some years ago when AT&T held a near-monopoly and Sprint entered long-distance service. Troutman’s relationship with Southern Company also made it hard to attract other independent power producers as clients, says Lueder, who spent nine years there. “I think you always have conflicts in this business,” says Douglas L. Miller, Mirant’s senior vice president and general counsel. “There are conflicts if Mirant is trying to develop projects in an area that is served by Southern Company. … We’re certainly looking at sites throughout Southern’s service territory.” Marshall says he and Lueder will continue to work on Mirant projects they began at Troutman. “We hope to continue to represent Mirant. There’s certainly no guarantees,” he says. “When they left, we didn’t promise them any work,” says Mirant’s Miller. “I told them they’d done good work in the past, and we’d consider them in the future. But the same is true of Troutman.” Robert W. Webb Jr., Troutman Sanders’ managing partner, says he’s not authorized to discuss client business with the press, saying only, “We appreciate every day the opportunity to represent Mirant.” Lueder, Marshall and other current Troutman Sanders’ lawyers have substantial Mirant work on their resumes. Last year, Marshall served as head finance lawyer on Mirant’s $2.65 billion purchase of Potomac Electric and Power Company (PEPCO) generating plants serving the Washington area. But the lead lawyer handling asset acquisition work on the deal, Benjamin L. Israel, still is a partner in Troutman’s Washington office. And earlier this year, Troutman lawyers represented Mirant in two simultaneous public offerings with combined proceeds of $1.8 billion. Troutman also represented Mirant and Southern in the spinoff that prompted Marshall and Lueder to switch firms. The pair announced their plans to leave Troutman on April 18; they began work at Paul Hastings two days later. Marshall joins Paul Hastings as a partner and Lueder as of counsel. Marshall says the two began seriously considering a move in mid-March. After talking to several firms, they contacted Paul Hastings securities partner Walter E. Jospin, who left Troutman a few years ago. They said they made the move based on Jospin’s recommendation, their own due diligence and an assessment of how Paul Hastings’ geographic reach could work in their practices — the firm has offices in California, London and Tokyo, among other places. “Paul Hastings was already representing Mirant,” Marshall says. “In fact, I’d come across their lawyers in part of the PEPCO transaction.” Miller says several firms represent Mirant, including Kilpatrick Stockton, which has handled some small projects for the company. Seth Zachary, Paul Hastings’ New York-based chairman, says Marshall and Lueder’s joining the firm is part of a long-held strategy to grow its project finance practice firmwide and particularly in Atlanta. According to Jospin, the firm already does project finance and development work primarily out of its Stamford, Conn., and Washington offices. Clients include Oglethorpe Power and GE Power. Paul Hastings’ firmwide corporate practice, at 300 lawyers, is about twice the size of Troutman’s 153-lawyer corporate, securities and project finance group. Paul Hastings’ profit per equity partner also is about double Troutman’s. Zachary projects average 2000 equity compensation at about $775,000 per partner (the firm’s fiscal year ended in 2001, and numbers still are being calculated). Troutman Sanders’ 2000 profit per equity partner is $387,640. Despite the income differential, Troutman’s Webb says his firm is having no trouble recruiting. So far this year, nine lateral partners have joined, including two from Skadden Arps Slate Meagher & Flom in Washington. As for Marshall and Lueder’s leaving, Webb says, “We wish them well.” But he also says, “We’re very happy with our project finance and our corporate practice, and it’s very robust, and we expect it to continue to be.”

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