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January 12, 2012 5:25 PM

Megafirm Merry-Go-Round: Lateral Movement Picking Up Among Legal Industry Giants

Posted by Brian Baxter

If the new law firm investment rules now taking effect the U.K. ever overcome the significant opposition that nonlawyer firm ownership faces in this country and make their way stateside, DLA Piper is one firm that might be a good candidate for an initial public offering.

In the meantime—and as The American Lawyer prepares to publish its latest Lateral Report in our upcoming February issue—DLA is kicking off the new year with a bit of a hiring binge.

The 4,200-lawyer firm, which became the world's largest after its May 2011 combination with Australian alliance partner DLA Phillips Fox, is bolstering its securities, litigation, and IP practices by adding a team of five partners from Reed Smith in Silicon Valley, according to sibling publication The Recorder.

Richard Scudellari, who helped open Reed Smith's Palo Alto office in 2008 and chaired its emerging growth and venture capital team, is joining DLA along with corporate partners Armando Castro and Matt Oshinsky, litigation partner David Lisi, and IP partner Craig Opperman.

Scudellari joined Reed Smith from Morrison & Foerster in 2008, the same year that Opperman and Castro joined the firm from Morgan, Lewis & Bockius. Oshinsky came aboard in 2010 after seven years at Gibson, Dunn & Crutcher, while Lisi joined from Howrey in 2009. The Recorder reports that Lawrence Watanabe of legal recruitment firm Watanabe Nason & Schwartz brokered the Reed Smith group's move to DLA.

Reed Smith also lost a trio of partners and some 15 counsel and associates in Hong Kong earlier this month as another group broke away to form independent firm Howse Williams Bowers, according to sibling publication The Asian Lawyer. The new firm will mainly focus on advising clients in Hong Kong's health care industry.

Reed Smith, which boasts more than 1,600 lawyers worldwide, shrugged at the departures. The firm said in a statement that in the current global legal market "lawyers change firms for personal and professional reasons. We wish the departing attorneys the best in their new endeavors."

(It's worth noting that Reed Smith grabbed four partners of its own from DLA last August to bolster its New York and San Francisco offices, while also appointing 22 new partners in early January.)

As for DLA, the firm also announced last week that it had hired another five-partner team, this one a group of energy specialists from Hogan Lovells, including practice cochair Kevin Lipson.

Joining Lipson, who has spent the bulk of his career at Hogan Lovells and predecessor firm Hogan & Hartson, in jumping to DLA are former Hogan Lovells partners Lee Alexander, Stefan Krantz, John Lilyestrom, and Christopher Schindler, all of whom are based in Washington, D.C. The group's work focuses on advising clients in the natural gas sector, according to U.K. publication Legal Week. Scott Yaccarino and Jordan Rosenthal from Empire Search Partners brokered the move of the team to DLA.

Hogan Lovells co-CEO J. Warren Gorrell, Jr., wished his former colleagues well in a statement to sibling publication The Blog of Legal Times, noting that "it’s important to keep in mind that Hogan Lovells has a global platform with more than 200 high-quality energy lawyers working with many of the world’s leading energy companies."

Like Reed Smith, 2,500-lawyer Hogan Lovells also named a plethora of new partners in early January, appointing 35 attorneys to its global partnership. The firm also strengthened its corporate practice in London by hiring David Levin, the former head of British firm Eversheds's Russian practice and previously the head of Chadbourne & Parke's U.K. corporate practice. Joining Hogan Lovells in Washington, D.C., last week was Adam Kushner, a former director of the office of civil enforcement at the Environmental Protection Agency.

Also keeping the lateral door spinning this week is Baker & McKenzie, now the world's second-largest firm by head count after DLA with 3,800 attorneys worldwide.

Legal Week reports that a five-partner team from Baker & McKenzie has broken away in Amsterdam to form independent firm Van Campen & Partners. Private equity partner Marc van Campen and corporate partner Maurits Tausk are leading the new operation.

Baker & McKenzie is also losing two IP partners in San Diego, according to The Recorder, which reports that the duo of James Conley and Howard Wisnia will join the local office of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. The departures leave Baker & McKenzie's San Diego office, which had 45 lawyers a decade ago, down to 13 lawyers, four of them partners.

Of course, like most global behemoths, there are plenty of lawyers moving into the firm as well. Baker & McKenzie announced this week that its Toronto office had picked up John Owen, the former cochair of the tax and estates practice at Canadian firm Bennett Jones. Also joining Baker & McKenzie: a team of five corporate lawyers—partners Hideo Norikoshi and Jiro Toyokawa and three associates—in Tokyo from Magic Circle firm Linklaters, according to The Asian Lawyer.

All the lateral movement involving the world's largest firms is largely a byproduct of their growing global platforms, whether it's through cross-border mergers or international office expansions.

Kent Zimmermann, a law firm consultant at The Zeughauser Group in Chicago, notes that firms residing in The Am Law 100's top tier just keep getting bigger. Zimmermann told The Am Law Daily via e-mail that the top 25 Am Law 100 firms control 49 percent of the U.S. market, with 13 of them boasting more than $1 billion apiece in gross revenue.

Zimmerman predicts that it will be increasingly difficult for the rest of the Am Law 100 to close the gap that exists between themselves and the top 25 global firms. "The benefits of being big and rich include having the resources to do things like recruit top laterals with big books of business," he says. "Another benefit is having the resources to brand, position, and effectively communicate points of differentiation to the market.”

And even when they're not adding partners in bulk, many large global firms are busy bolstering their ranks on a smaller scale.

Just this week, DLA quietly announced the hire of Earl Adams, Jr., in Baltimore. Adams, the former chief of staff to Maryland's lieutenant governor, joins DLA as of counsel in its litigation and government affairs practice where he will work alongside Gary Almeter, a litigation attorney who joined DLA in December from Venable.

Also joining DLA last month: Katten Muchin Rosenman real estate partner Nina Sitzer in Chicago and IP partners Melinda Upton and Nicholas Tyacke in Sydney. The Aussie duo began working at DLA in January, the same month that the firm brought on Irene Schmid as counsel in Berlin.

Perhaps not surprisingly, DLA joint CEO and managing partner Nigel Knowles was reelected this month to another term as head of the firm in an uncontested vote that came two months after the firm's partnership approved the appointment of former Linklaters managing partner Tony Angel as global chairman and senior partner of DLA Piper International.

When the rich get richer, it's hard to complain.

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Don't forget the smaller firms:

Last Monday, Offit Kurman, one of the fastest growing, full-service law firms in the mid-Atlantic region, opened its 6th office in Tyson’s Corner, Virginia. Alison Noll, a leading Virginia trusts & estates lawyer and her associate, Christina Niepraschk, join Tom Repcyznski, an OK bankruptcy/litigation principal.

The OK managing partner, Ted Offit, commented on why his firm is bucking this larger firm trend. "An increasing number of companies are choosing mid-sized law firms for both value and personal service."

Offit Kurman now has over 80 lawyers--they opened 2 offices the past 6 months and now have offices in 4 states.

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