June 29, 2007
THE DAILY JOURNAL
By William-Arthur Haynes
Pillsbury Winthrop Shaw Pittman is showing signs of bouncing back from the less-than-flattering times dating to its 2005 merger with Washington, D.C.’s Shaw Pittman.
Despite a number of partner defections since disappointing 2005 financial figures were released, 2006 showed a sharp increase. Detractors, meanwhile, have insisted it was because of those defections that the numbers rose.
The firm attributes the turnaround to cost-cutting measures, such as bringing the staff-to-attorney ratio into balance and liquidating superfluous office space, and moving beyond the one-time expense to complete the Shaw Pittman merger.
Whereas recruiters had struggled to place new partners at Pillsbury while so many were leaving, they are now finding partners once again attracted to the San Francisco-born firm.
“Pillsbury had a real bad run of negative news,” said Lawrence S. Watanabe of placement consultancy Watanabe Nason Schwartz & Lippman. “The firm has and is making a comeback. We are finding laterals attracted to the platform and new firm leadership, and have been successful in those efforts.”
Watanabe placed the firm’s most recent hire – David M. Furbush – who arrived last week from O’Melveny & Meyers in Silicon Valley.
The veteran securities litigator joins the firm’s 200-attorney litigation practice and, in tandem with Bruce A. Ericson, will lead Pillsbury’s security litigation practice team.
Furbush practiced at Brobeck, Pfleger & Harrison for more than 20 years until its 2003 implosion. Among the many firms he examined then, Pillsbury extended an offer, but he ultimately chose O’Melveny.
“It was a tough choice,” Furbush said. “I think it was influenced by some other Brobeck attorneys who were interested in going to O’Melveny at that time.”
Furbush said he stayed in touch with a number of Pillsbury attorneys, and watched with interest as the firm consummated the 2005 union with Shaw Pittman, the second of two major mergers in four years.
More recently, Furbush shared with Pillsbury acquaintances his vision for a national securities litigation practice built on the opportunities provided by the mergers.
“Some of what I had to say was attractive to the Pillsbury people about things that I thought would be possible,” he said.
Furbush envisions a nationally cohesive practice with cases staffed by cross-geography capabilities. Furbush said he would market the firm’s capabilities in locales where Pillsbury doesn’t have bricks and mortar.
There are three related areas of practice, Furbush explained. One is private shareholder class actions and the derivative cases, his forte, where the private plaintiffs’ bar is bringing the suits.
Closely allied are government-initiated civil and criminal securities litigation: the Securities and Exchange Commission regulatory practice where Pillsbury attorneys counsel clients during agency investigations and in the resulting claims should it reach that stage, and white-collar criminal representation in Department of Justice investigations.
“We’re seeing a classic example of all three of these coming into play in the options backdating cases,” Furbush said. “A public company anywhere can find itself caught up in these problems. In the area that I practice in, the plaintiff firms are located in relatively few locations, but they file suits in every state.”
Furbush said the firm could approach a defendant and make a compelling case that the plaintiffs’ lawyers and government agencies are specialized in their pursuit of such cases, minus a shingle in the relevant jurisdiction. It’s only logical to consider specialized defense representation in the same vein, he said.
“It’s a tremendous opportunity to be able to endorse and introduce with confidence somebody with as prominent a presence in our bar as David,” said Kirke M. Hasson, co-head of the firm’s litigation practice.
Hasson and Furbush acknowledged Pillsbury’s recent past, but insist the firm is on an upward trajectory.
Furbush said he had a number of discussions about the firm’s finances and was pleased with what he learned about management and conservative approaches to the balance sheet.
The firm has been able to convince others of the turnaround as well. Pillsbury has added about a dozen partners in 2007. Since March, the firm has attracted finance partner Barry K. Gassman from Mayer Brown Rowe & Maw in New York, corporate and securities partner Robert Metzger from Gibson, Dunn & Crutcher in Los Angeles, securities partner Richard M. Rosenfeld from Akin Gump Strauss Hauer Feld in Washington, D.C., and energy partner Sergio A. Pozzerle from Baker Botts in Houston.
“We’re growing back and we project continued growth,” Hasson said. “The securities litigation practice is one of the areas where we have been growing and will continue to grow.”
Hasson said the firm was poised to announce the addition of a former assistant U.S. attorney in the New York securities practice in the near future, but declined to give a name.
“I think that’s emblematic of what you’re going to see around the firm,” Hasson said.
The market is forgiving, Watanabe contends.
“If over a period of time you can increase your overall financial productivity and at the same time retain partners – and that’s key – the market will forget,” he said. “Pillsbury is a brand, it’s a very well-known brand and for a lot of very different reasons – New York firms in the area, new firms popping up – there are a lot of people that are going to say, ‘I want to go to a law firm that has deep-seeded roots in Northern California.’ There are only a handful of those. Pillsbury is one.”