February 18, 2003

THE SAN FRANCISCO DAILY JOURNAL

By Erik Cummins

SAN FRANCISCO – Within hours of Brobeck, Phleger & Harrison’s announcement last week that it would close its doors, California’s major law firms began scrambling to snap up the firm’s remaining assets: its best-known, best-paid lawyers.

By Monday afternoon, many of those lawyers had found homes or were in serious negotiations with suitors, according to sources familiar with the talks.

Much of Brobeck’s prized, 80-lawyer San Diego office, best known for its intellectual property, biotechnology and litigation attorneys, seems headed to Los Angeles’ Paul, Hastings, Janofsky & Walker, according to Greg Nitzkowski, Paul Hastings’ managing partner.

Such prominent lawyers as Palo Alto transactional partners Curtis Mo and Rod Howard are going to Weil, Gotshal & Manges.

Warren Lazarow, another big name in Palo Alto, will take a group of corporate partners to Los Angeles’ O’Melveny & Myers. Lazarow’s group includes partners Tim Curry, David Makarechian and Will Chuang.

Heller, Ehrman, White & McAuliffe, Latham & Watkins and Philadelphia’s Morgan, Lewis & Bockius were reportedly among the firms talking to Brobeck’s Los Angeles lawyers, including the office’s managing partner, John Hilson.

In Texas, corporate partner Carmelo Gordian said he is talking to a handful of firms about the possibility of placing all or portions of his 12-lawyer Austin group.

Gordian, the former chairman of Brobeck’s business and technology group, said members of the Austin group probably would land at new homes next week. Suitors include prominent firms from Texas and both coasts, he said.

“It’s not really a money issue,” Gordian said of the firms he’s been talking to. “It’s much more important to find a home we feel really good about.”

In California, most major firms confirmed they were talking to Brobeck’s lawyers and employees. Those negotiations, which typically can drag out for months under normal circumstances, could be completed this time within a matter of days.

“It’s a troubling time,” said Lawrence Watanabe, a legal recruiter with Watanabe, Nason & Seltzer. “Partners [at Brobeck] need to move quickly. I don’t see the process lasting more than 30 days.”

For its part, Brobeck is helping its lawyers and staff find new positions, according to firm spokesman John Pachtner. He wouldn’t discuss specifics. “Clearly, they are all looking for their next opportunity and they all want to land somewhere,” he said of the firm’s 150 partners.

Brobeck will stay open until it has satisfied all of its clients’ needs, Pachtner said. He wouldn’t estimate how long that would take.

Morrison & Foerster and Pillsbury Winthrop were among the first California firms to snare Brobeck lawyers. Friday, Morrison acquired former San Diego partners Jay de Groot and Steven Rowles. Pillsbury followed Monday by naming Palo Alto corporate lawyer Benjamin Quinones a partner.

Orrick, Herrington & Sutcliffe assembled a team of partners Thursday to recruit Brobeck partners, associates and staff members. Negotiations began almost immediately after Brobeck announced it would close and continued through the weekend. Ralph Baxter Jr., Orrick’s chairman, returned to San Francisco on Monday from a vacation in Hawaii to lead the effort.

As many as 100 Brobeck partners and associates might end up at Orrick, although that number could be much smaller, Baxter said. Negotiations to acquire some of those lawyers were under way, he said.

Brobeck’s dissolution and the rush to divvy up the firm’s remains were extraordinary, Baxter observed.

“There has never been anything quite like this, this suddenly,” he said.

Paul Hastings is well on its way to signing a deal with members of Brobeck’s San Diego office, which has about 80 lawyers, Nitzkowski said.

“I believe they will join Paul Hastings sometime next week,” he said.

Paul Hastings has long been interested in opening an office in San Diego and came close to doing so three years ago, he said.

Nitzkowski described Brobeck’s San Diego lawyers as “absolutely superb.” He said they would contribute substantially to the firm’s intellectual property, securities litigation and real estate groups.

“We have been wanting to add depth in all these areas, and this is a great opportunity to do that,” he said.

Carl Baier, managing director of legal recruiter Major, Hagen & Africa’s Palo Alto office, said Brobeck’s breakup offers a rare opportunity for law firms to acquire top Silicon Valley talent.

“All of the out-of-towners who have been salivating will be thrilled with this development,” he said. “It removes Brobeck as a competitor and increases the supply of well-respected lawyers with portable books of business.”

Brobeck lawyers are likely to be attracted to larger, stable firms with diversified practices and would avoid technology-focused law firms like the one Brobeck had become, Baier said.

“I think you’ll see groups moving,” he said. “Whether you are a buyer or a seller in this situation, there are lots of really good lawyers at Brobeck with lots of good clients.”

San Francisco’s Sedgwick, Detert, Moran & Arnold also is negotiating with lawyers and employees at the failed firm, said Kevin Dunne, Sedgwick’s managing partner.

Brobeck, he said, has outstanding litigators in a number of areas coveted by Sedgwick including white collar criminal defense, antitrust and intellectual property litigation and complex class actions.

Orrick also is looking at litigators.

“There’s normally very little urgency to get it done on either side,” Baxter said of lateral acquisitions. “We’re set up so we can do this quickly.”

Orrick’s executive committee, he said, will meet throughout the week to consider additions “until the Brobeck situation is resolved.”