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Although the vast majority of the law firms based outside of the Empire State added just a handful of attorneys to their Manhattan offices this year, some firms experienced hefty gains — and sizeable losses — at those New York locations, according to the NLJ 250. It appears that the industry standard for law firms seeking to maintain a national presence continues to require a strong New York practice, where participation in its capital markets, securities and real estate work is critical for big firms needing to serve their existing clients and to attract new ones. But staffing those offices with the right number of attorneys apparently takes some tweaking. This year’s survey, which covers a 12-month period ending Sept. 30, 2004, shows a fair amount of both additions and departures at Manhattan offices, as non-New York-based firms reacted to the ebb and flow of Big Apple business. Greenberg Traurig, for example, which experienced 26 percent growth overall during 2004, had a net gain of 49 attorney positions in its New York practice, which totals 264 attorneys. The Manhattan additions demonstrate a 23 percent increase in the attorneys working there. The uptick included adding 19 equity partners and 23 associates. Overall, Greenberg Traurig, which has its principal office in Miami, grew from 1,023 attorneys in 2003 to 1,284 this year. Increases in litigation, real estate, corporate and tax work in New York contributed to the gain, said Cesar Alvarez, president of the firm. Most additions came through lateral hires of attorneys lured by the culture of Greenberg Traurig, Alvarez said. “I know it may seem almost unsophisticated, but I can’t stress enough how it works,” he said. Specifically, the firm fosters cooperation and collaboration instead of competitiveness, he said. “Word-of-mouth” about a “lack of bureaucracy” has prompted attorneys to switch to his firm, Alvarez said. But at Latham & Watkins this year, attrition was particularly pronounced. The firm had a net loss of 34 attorneys, or 12 percent, from its New York practice. Last year, Latham & Watkins, which has its largest office in Los Angeles, employed 275 lawyers in New York. This year, it reported 241. David Gordon, managing partner at Latham & Watkins’ New York office, said that by year’s end the firm will have hired at least as many attorneys as those who left. But he added that the attrition rate, especially for mid-level associates, was especially high this year in New York. As he described it, “pent-up demand” for attorneys from investment banks and in-house counsel positions fueled the exodus in 2004. “It was uncorked this year,” he said. Associate departures made up the bulk of the losses, with 31 leaving, for a total of 170 associates currently working in the New York location. In addition, four of counsel attorneys left. The firm reported a total of 1,540 attorneys this year, compared with 1,624 lawyers in 2003. An important reason some attorneys are moving to in-house work is that those salaries now are more in line with law firm pay, said Jonathan Lindsey, managing partner at the New York office of Major, Hagen & Africa, a law firm recruiter. “Law firm salaries were a little bit out of whack,” said Lindsey, referring to pay structures during the dot-com years that doled out starting salaries exceeding $140,000 in some firms. While law firm compensation has stayed “flat,” he said, in-house pay has increased incrementally. Another firm based outside New York that saw a significant dip in its New York numbers was Chicago’s Winston & Strawn, which showed a 12 percent net loss. Reporting 174 attorneys in Manhattan this year, the firm had 197 at that location last year, for a decline of 23 lawyers. The firm’s total attorney population is 870, compared with 845 in 2003. The biggest drop for Winston & Strawn also came from associate losses, with 78 associates working at the New York office in 2004 and 92 in 2003. Firm chairman James R. Thompson attributed the lower New York showing to the “right-sizing” of the practice. Changes in “corporate opportunities” led to the fluctuation of numbers in the New York office, which focuses on securities litigation work, he said. But he added that the firm’s broader objective is to add to the New York office, especially in light of its goal to expand its international practice. “There’s a correlation between the London market and New York,” Thompson said. “It’s very important to the Brits that you have a large presence in New York.” In addition, Sidley Austin Brown & Wood’s New York office experienced a net loss of 39 attorney positions, which totaled 395 this year and 434 last year, for a 9 percent decline. Again, the majority of departures was from associates. RICH GET RICHER Lindsey, the recruiter, cautions that some firms are overly ambitious in their plans to expand their Manhattan practices. While it takes more than a “Maytag repairman” presence, he said, where a firm may have one lone attorney in New York or an office there just for convenience, expecting to pull in big numbers of laterals is more difficult for certain practices. “To some extent, the rich are getting richer,” he said. “The firms that have achieved critical mass in New York and are highly successful are more attractive to laterals. Other firms have had a tougher time getting traction.” Besides Greenberg Traurig, another big gainer this year was Jones Day. It added 57 net positions to its Manhattan office, up to 283, compared with 226 last year. Much of its gain came from hiring about 100 of the 174 lawyers from Pennie & Edmonds, a New York intellectual property firm. Effective in January, the Pennie & Edmonds lawyers joined Jones Day in New York, California and Washington. With a significantly smaller New York foothold, Manatt, Phelps & Phillips, which is based in Los Angeles, showed a 51 percent gain this year by adding 21 positions to its office, for a total of 62. Much of the increase is attributable to its merger with Parcher Hayes & Snyder, a New York litigation boutique that represented several prominent entertainment media clients. Twelve attorneys from Parcher joined Manatt Phelps in a move that Manatt’s chief executive and managing partner, Paul H. Irving, at the time said would enhance the firm’s ability to serve its clients on a national scale. That some firms markedly increased their Manhattan numbers may be more indicative of their persistence in cracking the New York market than any big job gains, said Toby Spitz, president of Toby Spitz Associates, an attorney recruiting firm in New York. Spitz said that although “out-of-town firms are solidly here,” growth coming out of the down years following the dot-com failures has been slow. “This might have been a weak recession, but it was also a weak recovery,” Spitz said.

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