April 7, 2014

LOS ANGELES DAILY JOURNAL
By Alexandra Schwappach

SAN DIEGO – Close to 20 attorneys are leaving McKenna Long & Aldridge LLP to join Sheppard, Mullin, Richter & Hampton LLP in San Diego, sources said Friday.

McKenna confirmed that real estate partner Nancy T. Scull and insurance litigation partner Peter H. Klee will jump to Sheppard Mullin. They’re bringing roughly 15 other attorneys with them, most of whom are partners, sources said. Among them is real estate partner David M. Hymer, who is part of Scull’s team.

The moves come just two years after Washington D.C.-based McKenna significantly expanded its San Diego presence by acquiring Luce, Forward, Hamilton & Scripps LLP, a sizeable local firm known for its deep roots and real estate prowess. Scull, Hymer and Klee were all attorneys at Luce Forward.

Since then, McKenna has continued on a path of expansion, engaging in merger talks with international law firm Dentons, which ultimately fell through.

Experts say that some legacy Luce partners were giving the McKenna-Luce combination a try before deciding whether to leave. An environment more akin to the culture at Luce might have been what Scull and others were seeking.

Larry Watanabe, a legal recruiter who brokered Scull and Hymer’s move, said the departures are a significant feat for Sheppard Mullin as both Scull and Klee are highly regarded rainmakers in the legal community.

“Klee and Scull drive a lot of revenue,” he said.

Scull represents commercial, industrial, retail and residential developers in real estate transactions. In 2010, she represented AEG in connection with a 224-condominium high-rise at downtown Los Angeles’ L.A. Live development and last year advised on the governance and structuring of the Civita master-planned community in San Diego.

Klee, who serves on McKenna’s board of directors, focuses on defending insurance companies in bad faith and fraud suits. In a 2010 jury trial, Klee scored a unanimous defense verdict in a bad faith suit brought against client Deerbrook Insurance Co. “Both of these folks had significant books of business,” said Alan Miles, a legal recruiter in Los Angeles.

Scull, Klee and Hymer could not be reached Friday.

In a statement, McKenna said Scull, Klee and departing members of their respective practice groups made “important contributions to the growth of the legacy Luce Forward firm and we wish them well in this next phase of their practices.”

McKenna, the firm added, “is a robust national firm. The departures reflect approximately only a small percent shift in the number of our attorneys in our San Diego region. We continue to have strong marketplace history and diverse strengths in litigation, government contracts, government affairs, real estate, private client services and corporate law.”

The firm also said it’s “highly committed to the San Diego market,” and it continues to “grow our California presence and build our position in many client sectors.”

McKenna currently has about 600 attorneys in 16 offices. It had added 73 partners with the Luce merger.

“Culturally and otherwise, Sheppard Mullin has a lot of roots that are more reminiscent of Luce Forward,” Watanabe said.

McKenna Long has looked into other possible unions since its marriage with Luce. The firm abandoned plans to combine with Dentons after partners voted against the proposal in late November.

“I think it’s safe to say that [McKenna’s] intent is to merge at some juncture,” Watanabe said.

A combination of McKenna and Dentons would have created a 3,000-attorney firm. Legal observers at the time said that not enough partners were on board with the firm’s plans to expand to such a great size.

“There would definitely be great changes with more expansion,” said Diane Rifkin, a legal recruiter in Orange County.