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After losing a string of prominent partners in the San Francisco Bay Area, international law firm Coudert Brothers is consolidating its Palo Alto and San Jose, Calif., offices and moving its San Francisco practice out of the historic Cannery building. The moves are part of a plan adopted earlier this year by the firm’s new executive committee to reorganize its 47-lawyer Northern California presence. “We do periodic strategic planning for our different regions,” said David Huebner, a Los Angeles partner who sits on the firm’s executive committee. “Given our market and clients, it made sense to have a larger presence in Palo Alto rather than two smaller offices.” Attorneys in the San Jose office will start relocating to the Palo Alto office in the next few weeks. And the 21 San Francisco lawyers will abandon the Cannery in October, even though their lease has not expired. “The move is not a cost-cutting move because it actually involves us taking another lease, so it’s adding cost,” said Huebner. Coudert, which is based in New York, maintains 31 offices across the globe and counts as many partners in Europe as in the United States. Despite the tough economic times, the firm had a strong 2001. Coudert’s 800 attorneys grossed $216.5 million in revenues in 2001, with average profits per equity partner of $455,000, up 17 percent from the previous year. In October, the firm elected Englishman Steven Beharrell as its new chairman. Beharrell, a corporate partner who focuses on energy companies, has described Coudert as being on a fitness regimen. While Coudert doubled its attorney ranks during his predecessor’s eight-year tenure, Beharrell has stated that the firm will not expand as aggressively going forward. “Our target is to get lean and fit and organized,” he told an Australian newspaper shortly after taking office. Along with a new chairman, Coudert also installed a new seven-member executive board last fall. In the months since those management changes, the firm’s Bay Area offices have suffered a series of high-profile defections. In the San Francisco office alone, nearly half the 16 partners and of counsel attorneys have jumped ship, most notably intellectual property rainmakers Ronald Katz and Carole Barrett, who moved to Los Angeles-based Manatt, Phelps & Phillips and San Francisco’s Howard, Rice, Nemerovski, Canady, Falk & Rabkin respectively. Katz, a 14-year Coudert veteran and former member of the executive committee, would not comment for this story other than to say he wishes the firm well, while Barrett stressed that her departure was not motivated by any disagreement or displeasure at Coudert. “I didn’t leave for any reason other than a better opportunity,” said Barrett, who now chairs the trademark group at Howard Rice. According to Coudert’s Huebner, the San Francisco departures do not fit into any overall trend. Most of the departures were individual circumstances, said Huebner, such as people retiring or moving out of state for family reasons. “It has not hurt our practice in terms of lost dollars,” said Huebner, noting that Northern California has historically been one of Coudert’s most profitable regions. Coudert’s San Francisco practice moved into the Cannery building, located in the tourist-oriented Fisherman’s Wharf area, in 1999. That decision is now openly deemed a mistake by the firm’s new management. “If you’re not selling T-shirts, you really want to be where your clients are and where you’re comfortable being,” said Huebner. “Our view is it’s retarding our growth and we need to move out of it.” While the firm hasn’t signed a new San Francisco lease yet, Huebner said he’s currently looking at several spaces in the financial district. The firm is in discussions with the Cannery about the terms of its departure and is simultaneously looking at prospective subtenants. Regardless, said Huebner, the San Francisco attorneys will move out of the Cannery in October. Meanwhile, Coudert will sublease its San Jose office for the last year on its lease as it consolidates into Palo Alto. While the move means that some staff and attorneys will be let go due to overlap and redundancies, Huebner maintained that this is in no way an economically motivated layoff. “This move we’re making is a greater investment in Northern California rather than a retrenchment,” said Huebner, “because the goal is to position ourselves to take more space and further grow the operation.”

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