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The prevailing opinion is that a recession is good for litigators. Businesses strapped for cash will fight harder to get what they think is rightly theirs. Plummeting stock markets spawn securities litigation and business failures create bankruptcies and all the attendant debtor-creditor disputes. And in this current post-Sept. 11 time, insurance and re-insurance litigation is also a hot area. So, presumably it follows that law firms are increasing their number of litigation partners. Well, not exactly. The National Law Journalsurveyed more than 100 firms around the country and took a closer look at 20 to find out if they are hiring more litigation partners. The finding is that some are and some are not. And the reason is that litigation partnership decisions are generally driven by longer-term economic factors and by the vicissitudes in the quality of incoming associates and a particular firm’s partnership-making process. “I do not believe that the recession has any impact on who becomes litigation partner,” said Richard S. Odom, chairman of San Francisco-based Brobeck, Phleger & Harrison and head of its complex litigation group. Brobeck has been hit hard by the downturn in technology industries and the recession and has, in fact, added only nine litigation partners in 2001, compared with 20 in 2000. Still, Odom echoed what other firm leaders around the country said: Because litigation work is steady and has countercyclical aspects the firm would not turn away someone who met its criteria — a person with strong skills, experience and the ability to manage major litigation projects. He noted that even with the collapse of the dot-com world, litigation involving intellectual property and other technology-related issues has continued to grow. Of the 16 firms that could provide information for 2000 and 2001, eight hired more partners in 2001 than in 2000 and one stood pat. Of the 18 firms surveyed that had figures for 2002, nine promoted more associates to litigation partner this year than last and another four stayed the same. Take, for example, Detroit’s Miller, Canfield, Paddock and Stone, which promoted four associates to litigation partner this year, compared with only one in 2001. “Clearly the cranky economy has led to an increase in debtor-creditor, contract-related, bankruptcy and other litigation,” said Clarence L. Pozza Jr., head of the firm’s litigation practice. But that fact does not explain the fourfold increase in partner elevations. Pozza said that his firm has made partnership decisions with an eye to a longer-term and more deeply entrenched economic trend — the business world’s move toward vendor consolidation. “Though I hate to use the phrase vendor to describe a law firm, the same trend applies to us. Clients want to deal with a smaller number of firms.” Miller Canfield has thrived, he said, by ensuring that it can meet a wide range of its clients’ needs, not only in Michigan, but in the surrounding Great Lakes region and nationally. At Stamford, Conn.’s Cummings & Lockwood, the firm has 24 litigation partners after promoting two associates to partner this year, the same as in 2001 and two more than in 2000. The chairman of the firm’s trial group, William H. Bright Jr., said that litigation partnership decisions were not affected by the recession. The firm has given the nod to new associates when it is “their turn to come up,” he said, explaining that the firm has a two-tier partnership system. After six to 10 years with the firm, he said, an associate can become an “income partner” if he or she is a first-rate attorney, has a commitment to the firm and its clients and has the potential to develop new business that will support himself and others. After a year or more, he may be moved to “equity partner” if he has lived up to his potential and has demonstrated the skills needed to be a business owner. Most attorneys in commercial litigation, he said, could not expect to be “rainmakers” until they were in their 40s or even 50s. CLIFFORD CHANCE Global giant Clifford Chance Rogers & Wells, which has 46 litigation partners in the United States, named six new litigation partners in 2001, compared with 14 in 2000 (figures for 2002 were not available). Yet the firm has seen its litigation practice grow. The recent turbulence in the securities markets, which saw the values of many stocks plummet precipitously, has been the cause of a great deal of litigation, said James N. Benedict, the leader of Clifford Chance’s global litigation and dispute resolution practice area, noting that his firm has been called upon to defend against a rapidly increasing number of securities class actions. In addition, he said, “There has been a huge surge in re-insurance litigation. In part that’s because of the events of Sept. 11, but the trend was there before. Billions of dollars of insurance risk will be reallocated through litigation.” He added that his and other firms can expect to be busy with bankruptcy litigation. “Enron alone is likely to generate tens of millions of dollars of bankruptcy litigation,” he said. Benedict explained that litigators follow a different cycle than their transactional peers. Transactional work can dry up overnight if the economy turns sour, but once clients initiate litigation, they will usually let it take its course. Consequently, litigation tends to move in three- to six-year cycles, with less extreme booms and busts, Benedict said. Paul B. Klaas, chairman of Minneapolis-based Dorsey & Whitney’s trial department, was also reluctant to attribute his department’s recent growth to the recession, mostly because it has been a continuation of the firm’s long-term growth. The firm added nine litigation partners in 2001, up from five in 2000. And he agrees with his counterparts’ assertion that partnership decisions are usually not tied to year-to-year economic trends: “Our litigation partners rarely leave the firm. We are making very long-term decisions.” LATERAL HIRERS As for whom firms are looking for, filling a strategic hole can be a key. An example comes from Clifford Chance, which hired partner David M. Lindsey as a lateral hire in 1999. The firm had a strong international arbitration practice in its European branches, but not in the United States. Lindsey, who came from Miami-based Steel Hector & Davis with experience in international commercial litigation, provided Clifford Chance with a U.S. complement to its European practice. Los Angeles’ Manatt, Phelps & Phillips added 17 new litigation partners in 2001, 10 via lateral hires, up from 14 and nine, respectively, in 2000. According to Barry S. Landsberg, Manatt Phelps co-chairman, although the firm has a commitment to producing partners from within (it added seven in 2001 and five in 2000), the reason it added more partners through laterals was because the firm has a strong industry-specific focus, frequently handling litigation involving energy and natural resources, the entertainment industry, healthcare and telecommunications, for example. And the firm needed to find laterals with a deep background in those specific industries, Landsberg said. Dawn Markowitz and Shannon Attaway contributed to this story. Related chart: A Picture of Partnership: 2000-2002

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