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A vigorous market for corporate litigation work kept the recession at bay for large New Jersey law firms in 2001, and kept them on a growth curve. The number of lawyers at a studied group of firms grew 5.3 percent last year, outpacing increases of 3.7 percent in 2000 and 3 percent in 1999. Of 32 firms tracked, 21 increased their number of lawyers, nine decreased and two kept their ranks stable, according to figures derived from the Martindale-Hubbell Law Directory and cross-checked with managing partners. Though the nation’s economy has been in recession for the past four quarters, there’s been no falloff in business for firms concentrating on commercial litigation. “We were always waiting for it to happen,” says Paul Rowe, managing partner at Greenbaum, Rowe, Smith, Ravin, Davis and Himmel in Woodbridge, about the expected impact on his practice. Nevertheless, the firm added 13 lawyers — a 15 percent growth rate. While corporate transactional departments, which were buoyant just two years ago, have had to redeploy lawyers to other areas, other practice areas are flourishing. Besides commercial litigation, growing practice areas are intellectual property, labor and employment, and environmental law. And practices tied to pharmaceuticals and real estate have continued to flourish, managing partners say. At the same time, firms are holding on to more of the lawyers they have, as the feverish job-hopping among associates two and three years ago seems to have cooled. “I think there are fewer opportunities for people to move around,” says Rowe, noting a reduction in the number of help-wanted ads for lawyers since early 2001. The fastest-growing firm in the surveyed group is McElroy, Deutsch & Mulvaney of Morristown, whose lawyer ranks increased 20 percent to 120. Managing partner Edward Deutsch says the 19-year-old firm’s growth has been based largely on commercial litigation — some of it complex, which requires more lawyers. He says the firm has a blueprint for expansion that anticipates a size of 140 or 150 lawyers in a few years. At the other end of the spectrum, Tompkins, McGuire, Wachenfeld & Barry of Newark suffered a 19 percent reduction in lawyers, falling from 43 lawyers to 35. Managing partner William McGuire did not return calls requesting comment. Other firms in retrenchment are Cole, Schotz, Meisel, Forman & Leonard of Hackensack, which dropped 11.6 percent; Waters, McPherson, McNeill of Secaucus, 9.8 percent; and Morgan, Melhuish, Monaghan, Arvidson, Abrutyn & Lisowski of Livingston, 8.3 percent. The largest firms grew faster than midsized ones, reversing a trend from the mid-1990s. Among those ranked by the Law Journalas the 20 top-grossing firms in the state, the growth rate was 6.4 percent. Ten firms have surpassed the 100-lawyer mark, compared with eight firms in that category in 1997. The firms enjoying growth lie evenly through northern, central and southern New Jersey. They include Budd Larner Gross Rosenbaum Greenberg & Sade of Short Hills, 16.4 percent; Parker, McCay & Criscuolo of Marlton, 16.3 percent; and Stark & Stark of Lawrenceville, 13.6 percent. Another firm with ambitious growth plans, Norris, McLaughlin & Marcus of Somerville, has seen the future and it is intellectual property. The firm reached 63 lawyers, a 9.5 percent hike above the totals in 2001. There are 10 IP lawyers, including six in the firm’s New York office, and managing partner John Eagan says the firm wants to hire three to five more as part of a strategy for growth in the field. “We are a business firm. In terms of us cross-selling services, IP sits very well for us,” says Eagan. The health-care, labor and employment, and litigation groups are also in line for expansion through laterals, he says. He adds that the firm expects to hit the 100-lawyer mark in three years. Also seeking laterals in commercial litigation and intellectual property is Fox, Rothschild, O’Brien & Frankel, whose Martindale listing gave it 72 lawyers, a 4.3 percent increase. The firm has also brought in laterals in its real estate and environmental groups recently, and it is seeing brisk business in creditors’ rights, health care, casino and brownfields practices, says Phillip Griffin, managing partner of the Lawrenceville office. Fox Rothschild, which also has an Atlantic City office, will add its third New Jersey site sometime this year when it merges with a smaller firm, says Griffin, declining to name the target. The firms whose lawyer rosters shrunk or stayed flat in 2001 are concentrated in the northeast corner of the state, in Essex, Hudson, Bergen and Morris counties. But even they say they have been experiencing robust business. Porzio, Bromberg & Newman held the line at 59 lawyers, but managing partner D. Jeffrey Campbell says the Morristown firm boosted its revenue and average hours per partner, associate and paralegal. The tort litigation and environmental shop has seen an upswing in business since Gov. James McGreevey took office because of a change in environmental enforcement practices, says Campbell. Likewise, Morgan Melhuish, despite an 8.3 percent drop in its lawyer count, is more efficient and productive and is pleased with its gross dollar volume, says co-managing partner Elliott Abrutyn. Drinker, Biddle & Shanley of Florham Park shows 101 lawyers, a 4.7 percent decline from last year’s totals. Yet pharmaceutical mass tort defense work and product-liability defense have been strong in the firm’s New Jersey offices, says managing partner Daniel O’Connell. The office also has been putting in lots of hours in litigation and antitrust work for client Hewlett Packard in its proposed takeover of Compaq, O’Connell says. A revitalized real estate market and the busy pace of commercial litigation and bankruptcy practice have kept lawyers hopping at Cole, Schotz in the past year, says managing partner Steven Klein. Though the 2002 Martindale-Hubbell directory lists 76 lawyers, Klein says the number is actually 84. The firm’s clients include Home Depot and UBS Paine Webber. Klein says the firm is pleased with its current size and does not plan significant growth, although he adds that such decisions are client-driven. “Our eyes and ears have been open,” Klein says. “We’re just cautious and conservative. We feel like it has to be the right thing.” Related chart: Growth and Attrition at Major New Jersey Firms Related chart: Hiring Trends at New York Firms

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