California Powerhouses Leverage Top Talent in Legal Goldrush

Law360, August 26, 2018

By Kat Greene

LOS ANGELES — The continuing growth of California's economy has fueled a legal industry gold rush across practice areas, and the eight firms selected as Law360’s 2018 California Powerhouses have excelled at attracting top talent and the state's increasing book of business, from class actions targeting tech giants to deals and disputes in the sports and entertainment industries.

As part of its annual Regional Powerhouse series, Law360 is recognizing a group of law firms with a major presence in the Golden State that stood out during the past year for their outstanding achievements in the region in what experts say was an exceptionally competitive year for the legal sector in California.

CALIFORNIA POWERHOUSES

Best Best & Krieger
Farella Braun
Gibson Dunn
Kilpatrick Townsend
Morrison & Foerster
Munger Tolles
Orrick
Sheppard Mullin

The law firms are Best Best & Krieger LLP, Farella Braun & Martel LLP, Gibson Dunn & Crutcher LLP, Kilpatrick Townsend & Stockton LLP, Morrison & Foerster LLP, Munger Tolles & Olson LLP, Orrick Herrington & Sutcliffe LLP and Sheppard Mullin Richter & Hampton LLP.

“The firms selected as this year's winners are an eclectic bunch,” Valerie Fontaine, co-founder of California-based legal recruiting firm Seltzer Fontaine, said. “The variety of firms on the winners list reflects the strength and diversity of California's economy and its need for a variety of legal services.”

The winners — which range in size from a 126-lawyer regional firm to a global giant with nearly 600 lawyers in the state — each found ways to mine the legal market for opportunities this past year, representing clients in a range of industries, including technology, finance, food and beverage, media and entertainment, energy, hospitality, life sciences, and even cannabis.

During the past year, BB&K defeated a lawsuit challenging its clients’ $100 million transportation corridor; Farella Braun secured a $30 million jury verdict for its data-center manufacturer client in a business information theft trial; Gibson Dunn defeated an enterprise-threatening class action brought by delivery workers against GrubHub; and Kilpatrick Townsend won a temporary restraining order for CBS in anticipation of a boxing match between Floyd Mayweather Jr. and Conor McGregor to prevent piracy issues.

Meanwhile, Morrison & Foerster secured a U.S. Supreme Court victory for client biosimilars maker Sandoz; Munger Tolles snagged a victory at trial for its client in a fight for ownership control of Beverly Hills-based entertainment management company ROAR; Orrick scored class action wins for both Microsoft and Twitter; and Sheppard Mullin advised Adidas on the sale of two of its brands for $425 million.

THE MANY WAYS TO GROW IN CALIFORNIA

California's economic engine is revving up, and that has provided an opportunity for law firms to do well also, according to Sheppard Mullin chairman Guy Halgren, who says that the legal market in the state has exhibited solid, steady growth over the past few years.

But, Halgren noted, that good business environment did not come without challenges — the fertile soil for opportunities also drew a good deal of competition.

“The California legal market is becoming increasingly competitive. Many new firms are coming into the state and existing firms are expanding by opening new offices,” he said.

One of the big ways law firms grew and got a leg up in California during the past year was through combinations, according to Delia Swan, founder of Swan Legal Search.

Recent combinations involving California offices or law firms include Lathrop Gage LLP’s expansion of its Los Angeles office with the addition of four-lawyer law firm Scheidemantle Law Group; Los Angeles-based Pierce Bainbridge’s merger with a New York firm to expand its offices there; Littler Mendelson PC’s merger with an Amsterdam firm, creating a new international office; and Squire Patton Boggs LLP’s acquisition of Singularity, a Redwood City intellectual property boutique.

“While that kind of consolidation might normally signal a downturn, I'm convinced this is more due to firms realigning to take advantage of the new normal,” Swan said. “The same dynamics that are powering corporations to buy back stock have created an environment for law firms to consolidate for competitive advantage.”

The ability of law firms to successfully recruit high-profile partner talent was another key driver of success in the highly competitive California legal market in the past year, according to Paul Allen, a Palo Alto-based partner at legal recruiting firm Major Lindsey & Africa.

“The firms that do this well can broaden their client base by bringing in partners with portable company relationships, and can effectively capture more work from their existing client roster by augmenting their visibility and expertise across practices,” Allen said.

Recent examples of high-profile partner hires in the state include Orrick’s addition of Clem Roberts and Jared Bobrow to its patent litigation practice; Gibson Dunn's hire of Michael Celio to its securities litigation practice; Cooley LLP’s decision to bring on Rachel Proffitt, Jon Avina and Dave Segre to its corporate practice; and Morrison & Foerster’s addition of M&A partner Khoa Do.

“The firms in California that have been attractive to partner candidates in the past year tend to be both strategic and nimble in their recruiting efforts, and demonstrate a highly collaborative partnership culture,” Allen said.

FINDING THE RIGHT MIX OF PEOPLE

Nimbleness in hiring was on the lips of several law firms that made the cut in this year's Powerhouse series, as they explained the reasons for their success.

California's economy and population have grown as innovation has generated new companies and new industries, according to Gibson Dunn managing partner Kenneth Doran, creating an environment where adapting quickly to novel types of work is a necessity.

“The firms that have done well, like Gibson Dunn, have remained nimble and have positioned themselves to serve clients in the new economy,” Doran said.

Hailyn Chen, co-chair of Munger Tolles’ practice development committee, attributes her law firm’s success in California to finding the right balance in staffing as well, but in a different manner. Chen touts the firm’s leverage model, in which equal numbers of partners and associates populate the law firm.

“The secret to our firm’s success has remained the same since day one: provide the highest-quality legal thinking to help clients solve their most important and complex cases and deals in a low-leverage model,” Chen said. “This one-to-one overall partner-to-associate ratio means we assemble lean, efficient teams that provide tight quality control and hands-on client service.”

Kilpatrick Townsend, meanwhile, pointed to its array of attorney positions, which includes partners, counsel, associates and team attorneys, when explaining its success.

“We offer a range of attorney positions so that our talent can match our client needs and the career goals of our attorneys,” managing partner Susan Spaeth said. “When a client engages the firm, they get a collaborative team of highly specialized attorneys that matches each client's specific industry, market and technology needs.”

--Editing by Orlando Lorenzo.

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