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Add Kirkland & Ellis to the list of out-of-towners staking a claim in the Bay Area. Now that most of the big New York firms have already set up shop in Silicon Valley, the rest of the country’s big law firms appear to have discovered the San Francisco Bay Area. Chicago-based Kirkland joins the growing list of newcomers to announce in recent weeks a plan to set up shop in San Francisco — even though the tech boom is long over. Attracting firms are cheap rents, falling profits — which puts local lawyers in play — and a long-term view that technology is a permanent fixture in the U.S. economy. Kirkland’s decision follows the arrival of London’s Clifford Chance, the Boston-based Bingham Dana, and Dorsey & Whitney of Minneapolis. Clifford Chance made a big splash by raiding San Francisco’s Brobeck, Phleger & Harrison for its former chairman and some 20 other partners, while Bingham Dana and Dorsey got into the market by merging with local firms. Bingham last week announced its plan to merge with McCutchen, Doyle, Brown & Enersen. In early May, Dorsey merged with the intellectual property boutique of Flehr Hohbach Test Albritton & Herbert. Kirkland isn’t sharing many details of its expansion plan just yet, although the firm has been in touch with local headhunters and may be considering raiding existing firms for talent as well as relocating partners from other offices. Thomas Yannucci, a Kirkland partner in Washington, D.C., and the firm’s chairman of strategic planning, said in a statement that the region’s mix of businesses plays to the firm’s expertise. “The firm believes that San Francisco provides great opportunities for practicing law in areas that match well with the firm’s traditional strengths,” Yannucci said in his statement. Kirkland is known for its litigation and bankruptcy expertise as well as for representing some of New York’s larger buyout firms. The new arrivals are bad news for indigenous firms, both the traditional ones and the ones that placed heavy bets on technology, say local headhunters. “I do believe that the whole legal market is up for grabs,” said Martha Africa, a recruiter at San Francisco’s Major Hagen & Africa. “Anybody can compete against anybody.” Lawyer-client relationships took a beating during the tech boom, when local firms were turning away work and passing on the publicly traded clients to other firms, Africa said. That made an opening for newcomers when it comes to penetrating the market, she said. It’s also one of the best times to go bargain hunting for office space, and for recruiting talented local partners at firms where profits have taken a beating, said headhunter Avis Caravello. “It’s the out-of-town firms expanding because they have the money,” Caravello said. “They’re thinking that in a few years, we’ll be out of the recession and it’s important now to do strategic alignments.” Martin Collins, who helped open a Silicon Valley office last summer for Chicago’s Mayer, Brown & Platt — which earlier this year became Mayer, Brown, Rowe & Maw — said the Valley still has too few lawyers for the amount of work that the region’s large, public companies can generate in better times. “The amount of commercial transactions divided by the number of lawyers … is very favorable to the lawyers,” Collins said. Newcomers in general say they’re not too late to the Valley because their firms cater to more mature clients rather than small technology startups. “I don’t know if we were early or late, but we wanted to be smart,” said Craig Diviney, a Dorsey partner in Minneapolis who heads the firm’s technology group. Opening up in the Bay Area was on the firm’s to-do list for several years, Diviney said, because many of its Midwestern clients, including Northwest Airlines Corp., Apogee Industries Inc., and several venture capital firms, do business in the region. “As far as we could see into the future,” Diviney said, “Northern California and Silicon Valley were places that were going to continue to be centers of high-tech legal work.” But the firm didn’t move until it had the chance to merge with Flehr Hobach, he said, adding, “The opportunity that really attracted us to California wasn’t available to us two years ago.”

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