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Corporate lawyers with portable books of business have always been among the most sought-after practitioners in the Philadelphia legal market. In many instances, it’s a case of wanting what you can’t have. Unlike New York, Philadelphia is not exactly bubbling over with lawyers that fit that description. But lawyers and consultants alike say law firms work hard to create an environment that makes lateral moves difficult to execute for corporate lawyers. Lateral movement has been virtually non-existent for Philadelphia corporate lawyers since the economic slowdown of 2001. Firm managers such as Duane Morris Chairman Sheldon Bonovitz believe that could change as economic indicators take an upswing this year. Frank D’Amore, who runs the Philadelphia office of legal recruiting firm Major Hagen & Africa, said he has already seen more requests from firms and r�sum�s from corporate lawyer candidates looking to move. Bonovitz said there is not a deep list of lateral candidates in Philadelphia, and those who do fit the bill are often tied to the infrastructure of their current firm. “Corporate lawyers generate work for other lawyers at a firm in areas like employee benefits, tax, real estate, IP and litigation,” Bonovitz said. “So they, along with institutional-type clients, tend to get more embedded into the firm. And that makes it harder to move with portable business. The client might say, ‘I love you, but I want to keep the people that are doing my IP, real estate and employee benefits work.’ So they can’t bring the client with them. And that makes them much less attractive.” Morgan Lewis & Bockius Philadelphia office managing partner Howard Meyers also noted the business-generating power of corporate lawyers, saying they are equivalent to an outside general counsel for the client, serving as business portals to lawyers in other practice areas at the firm. “To provide a high level of service, a corporate lawyer involves experts from other practice areas in the representation of clients,” said Meyers, himself a corporate lawyer. “Corporate lawyers are trained to do that so that the client is institutionalized into the firm. But that makes it tougher to move without taking the infrastructure with them.” Meyers said corporate lawyers often lateral with a deal team from a firm with a big corporate practice to one with a less established practice. Conversely, corporate lawyers making solo lateral moves tend to join firms with a built-in infrastructure. Cozen O’Connor managing partner John Cunningham, a corporate lawyer who led a four-partner lateral group from Schnader Harrison Segal & Lewis five years ago, said you never know how a client is going to react to your interest in switching firms. He said he was lucky that he brought a deal team with him and joined a firm with an established corporate practice. But he said some lawyers who feel the need to move are forced to leave key clients behind and start fresh at a new firm. “The new firm shares in the risk that maybe the clients won’t come with the lawyer,” Cunningham said. “And if the business doesn’t follow, the firm has to be confident that the lawyer will be able to re-build his book.” Altman Weil principal William Brennan said most firms have taken a proactive approach to institutionalizing clients. He said corporate lawyers representing major corporations are the least likely to move, while those representing smaller clients are the most likely but the least attractive to large firms. It is the lawyer representing mid-market clients — between $250 million and $500 million — who could have the best combination of attainability and attractiveness. “But no one wants to go to a firm with a platform that is going to hinder them in the future,” Brennan said. “So if a firm can’t be Morgan Lewis or Dechert, they market themselves as having increased responsiveness, having partners spend more time working on matters and having lower rates. If you are looking for a good value as a client, you might find it at a firm like that. Philadelphia firms have used this strategy, and quite successfully, in competing for business with New York and Washington firms — which have much higher cost structures.” D’Amore said a corporate lawyer’s ability to lateral is directly correlated to how well a firm does at institutionalizing clients and the manner in which they reward partners with compensation points for their client interaction. He said some firms give more points to the lawyer who originates the business while others spread the points out to all of the partners handling the work. “If you are at a firm with an eat what you kill mentality, the lawyer generating the business is going to keep their clients close to the vest and make sure they are on top of the work they parcel out to lawyers in other practice areas,” D’Amore said. “That way, if they are dissatisfied at their current firm, they retain portability.” So what does a Philadelphia firm do if it wants to build its corporate practice? D’Amore said there are a number of local firms that have small corporate practices but are significant firms in other areas like litigation, labor and employment, real estate, bankruptcy and intellectual property. He said there are some corporate lawyers at established firms who are the fourth or fifth best-known lawyer in the department who might be willing to take up the challenge of trying to build a corporate department at a new firm. The attraction, he said, comes from having leadership opportunities, the chance to take on work that the firm had previously referred out, and the opportunity to generate new business. “If you are risk-adverse, though, you need not apply,” D’Amore said. “It’s a risk on both sides. It’s a gamble for the firm because it is basically saying that if the lawyer was able to build a book, he can do it again. This is something that does happen. “But the other side of it is that corporate lawyers tend to gravitate to firms like Morgan Lewis and Dechert because they are concerned about losing pitches to clients outside Philadelphia.” Hangley Aronchick Segal & Pudlin is a mid-sized firm with high-end practices in areas such as litigation, real estate and bankruptcy. But it has never had a star corporate lawyer. With only 50 lawyers, little infrastructure in key support practice areas and no successful track record in that area, it has had trouble luring in a big fish during its 10 years of existence. So the firm has targeted younger corporate lawyers — either senior associates or junior partners — at firms with more established practices in that area. Late last year, the firm was able to recruit Jack Kenney, a senior associate from Morgan Lewis who entered as of counsel but could emerge as a partner in the near future. Managing partner David Pudlin admits that it has been slow going in building the practice, but he believes Kenney’s arrival will signal an opening of the floodgates to other corporate lawyers. He said the firm has been in talks with other corporate lawyers and is confident about expanding the practice. “Of course if we could get a group of four or five, that would be ideal,” Pudlin said. Saul Ewing Chairman Stephen Aichele said his firm’s recruiting strategy for corporate lawyers revolves around its strategic plan of being a top shelf regional firm. He said the firm just brought in a partner from DLA Piper Rudnick Gray Cary in Baltimore who was reluctant to increase his billing rates to match that firm’s new status as an international player. Nor did he believe his regional clients would receive the same level of attention. “He didn’t want to bill at $600 to $750 an hour like they do at those intergalactic firms,” Aichele said. “And he believes he can still get national and regional business with us.” Though he said Philadelphia possesses few superstar corporate lawyers, Aichele said there are a number of solid practitioners that would fit into the strategic plans of regional firms like his. “We try to attract people who are invested in the work that we do, but we always are looking for more people,” Aichele said. “I think any firm that tells you they are happy with the number of corporate lawyers they have is not telling you the truth.”

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