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Continued consolidation and megafirm growth made room for a host of regional powers on this year’s NLJ 250, our list of the nation’s largest law firms. At the same time, a number of familiar faces had trouble adapting or ran into bad luck and disappeared from the list. The changes reflect the profession’s efforts to adapt to a shifting marketplace, where some firms found happiness in the shadow of legal powerhouses. “We’re not looking to be Latham & Watkins. That tier is getting a little crowded,” said Robert Bell, managing partner of Luce, Forward, Hamilton & Scripps, based in San Diego. With 189 attorneys, the firm made the list this year at No. 213. It grew by 19 percent compared with 2004, when it had 159 lawyers. Luce Forward has found its place as a regional firm amid the continued big-firm mergers and lateral hires of the national market, Bell said. For example, DLA Piper Rudnick Gray Cary this year became the second-biggest law firm in the country after two separate mergers formed the 3,159-attorney giant. Also this year, Pillsbury Winthrop merged with Shaw Pittman to create an 858-attorney firm. In addition, Dechert gained 65 attorneys by hiring nearly all of Swidler Berlin’s New York office and some attorneys from Washington. Greenberg Traurig added almost 200 lawyers this year. As the mammoth firms wrestle each other for the biggest clients, Bell said that Luce Forward is happy to remain regional. The firm, which fell from the NLJ 250 last year, has no plans for a national or even bicoastal presence, he said, although he anticipates its continued growth in California, especially in Los Angeles and San Francisco. Luce Forward had an office in New York in the mid-1990s but closed it after environmental law work dried up. The firm has other offices in San Diego and Carmel Valley, Calif. Part of its plan today, Bell explained, is to continue to provide the kinds of legal services that have fallen out of favor with many of the giant firms, such as trust and estate work and labor and employment services. A busy California commercial real estate market, particularly in tenancy-in-common investments, spurred much of the firm’s growth in 2005, he said. Defense litigation also proved strong for Luce Forward this year, especially in matters concerning bad faith and unfair business practices claims. Several large firms wanting bigger California operations have approached Bell about mergers, he said, but at this point the firm is not interested. However, it would consider merging with smaller California practices to expand the firm, he said. Kennedy Covington Lobdell & Hickman has a similar regional approach. It has five offices in North Carolina and South Carolina. “Our strategy is to stick with what we do best,” said managing partner Eugene Pridgen. The number of attorneys at Kennedy Covington grew by 18 percent this year, to 186 attorneys, compared with 160 in 2004. This year, it is ranked No. 217 on the NLJ 250. It was ranked No. 238 in 2003 with 165 attorneys, but fell off the list last year. Although Kennedy Covington leaders have been “more intentional about growth,” Pridgen said, they also want to maintain the firm’s position as a regional player. “We have no immediate plans to go outside that footprint, but that doesn’t mean we won’t be opportunistic,” he said. The firm added a land-use practice group this year with five attorneys in Morrisville, N.C., from Womble Carlyle Sandridge & Rice. Some of Kennedy Covington’s bigger clients include Bank of America Corp., Wachovia Corp. and Duke Energy Corp. Other firms added to the list this year include Knobbe Martens Olson & Bear in Irvine, Calif., which has 177 attorneys, a 14 percent increase from last year; and Phillips Lytle in Buffalo, N.Y., which rose 11 percent to comprise 170 attorneys. Still others include Morris, Manning & Martin in Atlanta; Munger, Tolles & Olson in Los Angeles; Townsend and Townsend and Crew in San Francisco; Neal, Gerber & Eisenberg in Chicago; and Jeffer, Mangels, Butler & Marmaro in Los Angeles. Also new to the list are The Cochran Firm, ranked No. 141; Adorno & Yoss, ranked No. 169; Boies, Schiller & Flexner, ranked No. 203; and Ulmer & Berne, ranked No. 237. The National Law Journal obtained census information about these firms for the first time this year. UNDERCUTTING FEES The ability to undercut the fees that their national competitors charge is fueling some of the growth among regional firms, said Ward Bower, principal with the law firm consultancy Altman Weil. Although plenty of big firms are expanding into the Southeast, Southwest and Midwest, regional firms can do a client’s work for less money — often with a comparable level of expertise. “Corporate counsel are under intense pressure to reduce legal costs,” Bower said. “They’ll want to use a smaller regional firm with a lower cost base and a lower fee structure.” FIRMS OFF THE LIST Other firms previously on the NLJ 250 were not so fortunate this year. Off the list permanently are Coudert Brothers and Testa, Hurwitz & Thibeault, both of which collapsed in 2005. Coudert’s demise, announced in August, was largely attributed to an erosion of its international practices and the subsequent departure of many of its top attorneys. Trouble for Testa Hurwitz began after founder and Chairman Richard Testa died in 2002. His death, coupled with hard times the firm experienced during the slump in Boston’s technology sector, eventually proved insurmountable. But a decline in business is just one piece of a firm’s failure, Bower said. Struggling firms often face burdensome leases and high debt loads, which can send partners who do not want to shoulder those problems fleeing to other firms. Also noticeably absent from the NLJ 250 this year is Swidler Berlin, which now has 138 attorneys, well below the smallest firm on the list, Jeffer Mangels, with 165 attorneys. Ranked No. 170 last year, Swidler Berlin took a major hit in January, when 57 partners in its New York office left for Dechert. That blow was compounded by the defection of 14 attorneys from its energy practice in August. The firm was founded in 1982 as an energy boutique. It did not return phone calls for this article. In addition, the New York intellectual property law firm Fitzpatrick, Cella, Harper & Scinto dropped from the list after its attorney numbers fell 9 percent from 165 in 2004 to 138 this year. Phone calls to the firm were not returned. Other law firms failing to make the cut this year had hovered at the bottom of last year’s NLJ 250, and the loss of a handful of attorneys bumped them off. Those firms are Warner Norcross & Judd; Bond, Schoeneck & King; and Fisher & Phillips. The death of some law firms this year and the marked decrease of others reflect an ongoing shakeout of the changing national market, said Bower, who predicts continued shuffling among big firms. “There will be some at the top end that aren’t going to get the formula,” he said.

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