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The news came as no great revelation. After battling with layoffs, pay cuts and revenue drops, San Francisco Bay Area firms announced partner classes for 2002. Nearly all of the classes, especially at larger firms, were smaller than the year before. Times are tough. The economy’s hurting. And so, say some, this is no time for elevating large partner classes. But even so, the figures weren’t entirely bleak. Out of 16 Bay Area-based firms polled by The Recorder, 10 named fewer partners than last year, five named more and one elevated the same number. “It is definitely increasingly difficult to become partner,” said Peter Zeughauser, a law firm consultant in Orange County, Calif. “The biggest change since the early ’90s is many firms require an associate to have a book of business before they make them partner — and that just wasn’t the case back in the early ’90s.” “Historically, the skill set that was required was to be a really excellent technical lawyer,” said Mary Cranston, chair of San Francisco-based Pillsbury Winthrop, which dropped its class size by eight partners this year. Over time, she said, “sales and client development skills became more critical.” Besides excellent work and the ability to generate profits, most Bay Area firms look for a common set of traits in candidates. Wanted are leadership, commitment to the firm, an ability to blend well with the firm’s culture, a strong work ethic, an active role in the community — and firms want people who show that they can step into the ownership role. “The people who make partner generally have acted like a partner for a year or two before they make partner,” said Kevin Dunne, presiding partner in the San Francisco main office of Sedgwick, Detert, Moran & Arnold. Barry Levin, chairman of San Francisco’s Heller Ehrman White & McAuliffe, said, “You hope that people you make as partner will look at themselves as owners and not just employees.” In addition to a tougher, longer list of qualities that a potential partner must possess, the process itself is taking longer than ever. “The trend is to have a longer partnership track,” said Geoffrey Howard, a partner in McCutchen, Doyle, Brown & Enersen’s San Francisco main office. “I think you’ve seen West Coast firms lengthen their tracks in recent years to stay competitive with firms from other places in the country.” It used to take six or seven years to make partner; now the road more commonly stretches for seven to eight years or longer. Los Angeles-based Latham & Watkins, which operates an office in San Francisco and Silicon Valley, decided in the late ’90s to lengthen its partnership track to 8� years. The firm named eight partners this year. Stretching the path to partnership out even further is the fact that attorneys today face more competition than ever before. “We tell people if you go to one of our emerging offices, your odds of making partner are better than at a larger office,” said Dunne of Sedgwick. For example, Sedgwick’s New Jersey office had six associates — one of which was elevated to partner this year. The firm’s San Francisco office had 62 associates and only one of those was elevated. By contrast, one of New York’s largest firms, Dewey Ballantine, had a record-breaking class size of 12 this year and other New York firms managed to increase their size as well. There’s always one quality that a slumping economy can’t negate and a demanding firm can’t ignore — talent. “One’s main competitive advantage is talent and sometimes you move on even if the economics would be unthinkable,” said Keith Wetmore, a partner in the San Francisco main office of Morrison & Foerster. His firm’s numbers dropped by a third this year. “I think it comes as no great surprise that we have smaller partner classes than in boom times,” said Wetmore. “I don’t think it would be a shock to disclose that the Palo Alto office is not as busy this year.” But that doesn’t mean candidates there were overlooked. Three partners were named in the Palo Alto office. Brobeck, Phleger & Harrison says the economy played a role in its reduced class size. In 2001, 24 new partners were named; this year there were only nine. “Economics in general definitely has something to do with the opportunities that are available for senior associates to make partner,” said Allan Whitescarver, director of communications at San Francisco’s Brobeck. “In a slower economy, there are fewer opportunities to demonstrate the higher level of leadership” that’s needed to make partner, said Whitescarver. “So it’s not surprising that in a year of slower economy you’re going to have smaller partnership classes.” Not everyone agrees. Pillsbury’s Cranston says the economy is not even a factor in the decision-making process. “We are developing attorneys for the long haul, so it would be, I think, very poor management to change your partner decisions because the economy is having a down slip,” she said. The CEO and managing partner of Walnut Creek, Calif.-based Morgan, Miller & Blair shares those sentiments. “It’s a dangerous signal to a talented lawyer to [say] ‘we’re not going to make you a partner because the economy is weak.’ Firms that make decisions on partners based on the economy are making a huge risk,” said Michael Brown. Some think a downturn in the economy can actually work in a candidate’s favor. Ralph Baxter Jr., chairman and CEO at San Francisco’s Orrick, Herrington & Sutcliffe, is one. “Sometimes when a practice area is experiencing challenges it can make for an even more attractive opportunity for a candidate” because the person’s qualifications may be so necessary to the firm. Orrick’s class size dropped by one this year, from 14 to 13. The surveyed firms that seemed to ignore the economy the most when selecting partners — the small to mid-size firms like Oakland, Calif.’s Crosby, Heafey, Roach & May; San Jose, Calif.-based Skjerven Morrill MacPherson; Morgan, Miller & Blair; and San Francisco’s Hancock Rothert & Bunshoft — each increased class sizes by at least a third compared with the year before. Skjerven more than doubled its class size by jumping from three partners in 2001 to seven this year. Selecting partners is “something you do looking forward instead of looking back,” said Edward Anderson, managing partner. “We had a lot of very good, very able people up. We had a number of candidates both in litigation and in patent that were particularly strong and that’s why we made more partners.” Related chart: San Francisco Bay Area Partnership Classes

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