When H & #233;ctor and Norma Orc & #237; went into business nearly 20 years ago, they were among the first generation of ad agencies to connect national brands to a then-underserved Hispanic consumer base.

Once a narrow market, advertising to the Spanish speakers in the U.S. has grown into $3 billion industry and the Orcis’ agency, La Agencia de Orc & #237; & Asociados, had become one of its biggest players.

Having guided the firm to its position as the seventh largest Hispanic agency last year and launched the process of expanding its offerings to an increasingly bilingual audience, the Orc & #237;s are handing the reins to a new management team and easing into retirement.

“I’ve found a team that can succeed the founders,” said H & #233;ctor Orc & #237;. “I’ll be able to concentrate on thinking and strategizing and being personally involved with clients, rather than counting paper clips.”

The restructuring, which saw Norma Orc & #237; leave her post as chief creative officer in November and H & #233;ctor Orc & #237; step back from his day-to-day duties as chief executive, left the agency’s operations in the hands of Dilys Garc & #237;a Tosteson, promoted to president and chief operating officer last month from her post as director of new business development.

As part of the generational shift, La Agencia De Orc & #237; has gone outside, luring Tony Stanol from J. Walter Thompson in New York to serve as senior vice president in July. Stanol, who worked on international accounts in the U.S. and Latin America, had been a senior partner and worldwide director at JWT, overseeing accounts for Cadbury Adams USA LLC’s Trident Gum and Halls cough drops.

His hiring dovetails with what Tosteson said was the goal of adding three new, large, national brand clients. Those would bolster the firm’s bread-and-butter accounts: Allstate Insurance Co., Johnson & Johnson and American Honda Motor Co. Inc. by the end of 2007.

“Every one of our clients is asking about this issue of English-speaking Hispanics,” said Stanol. “It’s the hot topic right now. For each one of our clients, we’re either testing or implementing English-language service.”

Last year, Orc & #237; took an existing Spanish-language Honda commercial aimed at Latinos and re-purposed it to run in English. But not all products can work equally well with ads in English and Spanish; much depends on a product or brand’s resonance with Latinos.

“For Johnson & Johnson, we do ads for Lactaid and Splenda (sweetener),” Stanol said. “We seem to have better leverage with Lactaid with Spanish-language consumers than with Anglos. Lactose intolerance is very common among Latinos. So the general market strategy will follow that lead and we don’t have an integrated effort. With Splenda it’s the reverse the Spanish-language part has a smaller budget, because there’s less interest in Splenda among the Hispanic audience.”

Orc & #237;’s forays into English-language advertising for Latinos is a trend many Hispanic advertisers, as well as their mainstream national clients, have been following.

“There’s a bit of a revolution happening in Hispanic ad agencies and the Hispanic market,” said Felipe Korzenny, professor and director of the Center for the Study of Hispanic Marketing Communication at Florida State University. “Just a few years ago, it was totally taboo for Hispanic agencies to do English language, but the numbers have made it pretty obvious they need to change.”

Earlier this month, Korzenny presented the results of a recently completed study showing that Hispanics whose first language was Spanish received half their electronic media exposure in English. While about half of Hispanic ad agencies in the U.S. and about half their clients are embracing multi-lingual advertising for Latinos, Hispanic media adheres to the notion that Latinos can be reached only in Spanish, the study found.

But the 2000 Census found that while more than 80 percent of Hispanics speak Spanish at home, about 70 percent said they understand English well.

“Spanish media like Univision and Telemundo have been very slow to open up to English-language programming, but I think it will happen more,” Korzenny said.

H & #233;ctor Orc & #237; was born in Hermosillo, Mexico, and moved to L.A. while in high school. He met Norma, who moved from Chihuahha to L.A. as a child, while they were attending USC.

After college, the Orc & #237;s worked for several years in Puerto Rico and Mexico before returning to L.A., where H & #233;ctor became general manager of La Agencia de McCann-Erickson, McCann’s U.S. Hispanic agency. The Orc & #237;s bought out the agency and formed La Agencia de Orc & #237; & Asociados.