June 12, 2006

THE DAILY JOURNAL

By William-Arthur Haynes

SILICON VALLEY – Two more White & Case partners have decided to leave rather than move to the firm’s Silicon Valley offices.

The latest defections last week mean that nearly half of White & Case’s San Francisco partners have made lateral moves since the firm’s February announcement that it would centralize its Northern California practice in Silicon Valley. The San Francisco office will close at the end of the month.

G. Larry Engel, a bankruptcy and workout attorney, joined Morrison & Foerster, a firm with more than 1,000 attorneys in 12 U.S. offices and seven overseas outposts. Engel, whose practice focuses on financially distressed companies, arrived at White & Case in 2003 as a “Brobeck, Phleger & Harrison refugee.” He joined White & Case after a brief stint at Morgan, Lewis & Bockius, which absorbed more than 50 Brobeck partners after its implosion.

Corporate and securities lawyer Douglas M. Young also has decamped from White & Case. He is joining Baker & McKenzie, a firm of 3,300 lawyers in 70 offices worldwide. Young represents domestic and international buyers and sellers in U.S. and cross-border merger and acquisition transactions.

While Engel said Morrison & Foerster provides better opportunities to cross-sell his practice, he acknowledged that the firm’s impending San Francisco closure played a role in his decision to leave.

Engel said White & Case’s announcement that it would close its four-year-old San Francisco office “caused me to consider going to another White & Case office or re-evaluate what I was doing.”

“[The announcement] came as a surprise to us Brobeck folks who didn’t think we’d go through this again,” he said.

When Brobeck dissolved, Engel said, a team of five attorneys who started under him as associates joined White & Case while he remained at Morgan Lewis and advised a three-person liquidation committee mandated to “help clean up the Brobeck mess.”

Engel said he initially attempted to recruit his former team to Morgan Lewis, but he confessed they ultimately recruited him.

Three remain on White & Case’s San Francisco roster. The fourth is a partner in the Los Angeles office.

Among those five attorneys was bank finance and capital markets transactions partner William L. Harvey, who departed for Winston & Strawn in May. He cited White & Case’s office closure as his reason for leaving.

Also in May, former White & Case partner Jon F. Doyle lateraled to DLA Piper Rudnick Gray Cary’s corporate and securities practice in San Francisco.

“I wouldn’t have left if they hadn’t closed the office,” Doyle said.

Jay B. Gould, a White & Case counsel, and associate Michael G. Wu were the first to depart following the announcement. In April, the two landed in Pillsbury Winthrop Shaw Pittman’s corporate and securities practice group. Gould was taken on as a partner.

“I left because the office was closing and I didn’t want to be the last one out,” Gould said.

Roger Cohen, the firm’s New York-based spokesman, said closing the San Francisco office is based on a strategic decision to focus on the intellectual property, technology and patent litigation practices in the Palo Alto office.

Since February, Cohen has said consistently that White & Case is in discussions with all San Francisco attorneys about their futures.

At the time of the closure announcement, the White & Case office maintained nine partners. According to the firm’s Web site, White & Case now has five partners in San Francisco.

A source close to the situation said the manner in which the firm handled the closure was disturbing. According to the source, who spoke on the condition of anonymity, the partners were notified only two weeks before the firm publicized its intent to shutter the office.

“You can imagine what that does to someone’s client base,” the source said.

Cohen said the announcement was made in winter that the office would close in June. He declined any further comment.

When the office opened in 2002, White & Case signed a 10-year agreement for 30,000 square feet of office space in the Bay-front tower known as Four Embarcadero Center, according to sources familiar with the firm’s lease. It occupies 22,000 square feet of that space with rights to the remaining 8,000 on a contiguous floor. Sources said the firm spent approximately $2.5 million to renovate and furnish the space.

According to a source at Perkins Coie, that firm is negotiating with White & Case to sublease the space.

Cohen said he had no information on the real estate aspect.

Engel said that his colleagues at White & Case were nice people and good attorneys but that he’s always admired Morrison & Foerster.

He said he would retain most, if not all, of his existing clients, which include Wells Fargo, Pacific Coast Capital and Sherwood Partners Inc.

Larren Nashelsky, Morrison & Foerster’s New York-based chair of the bankruptcy and restructuring group, said Engel would bring two associates along and possibly a third. The additions would nearly double what was a five-person San Francisco group before Engel’s arrival.

Nashelsky said that Engel adds expertise to one of the firm’s most critical markets and that his track record and credentials fit the mold of what the firm’s clients are looking for.

Young has counseled U.S. and international financial institutions, borrowers and issuers in financing transactions and represented clients in bankruptcies and workout deals.

Young did not respond to requests for comment.

“This is terrific news for our office and our clients,” said Peter J. Engstrom, managing partner of Baker & McKenzie’s San Francisco and Palo Alto offices, in a statement released to the press.

“He is an asset to our existing corporate team and will help us continue to grow our international practice in the Bay Area.”