Gibson Dunn to Tap Two Leadership Spots

Staff Reporter

Seems like old times.

Gibson Dunn & Crutcher LLP, the century-old L.A. firm, last made a significant shift in management almost a decade ago also amid a recession that left even top firms struggling.

Ron Beard, a 37-year Gibson attorney, was named managing partner and chairman. Two vice chairman were selected, including Wesley Howell Jr., a New York partner who took the position of managing partner in 1997.

What followed was phenomenal growth, culminating in the firm last year ranking No. 22 nationwide in profits per partner with $975,000, according to American Lawyer's AM Law 100.

Now, the stakes are again high as the firm prepares to name a new managing partner and chairman in a few months its two highest management positions. A succession committee is currently reviewing candidates and while no names have been announced, some suspect that the firm will return to its roots with the naming of an L.A. partner.

"If it were me, I would focus on the culture of the firm and what makes it special," said Clay Halvorsen, senior vice president and general counsel at Irvine-based Standard Pacific Corp. who was at Gibson from 1985 to 1997. "Now it's a good time to build that culture and loyalty. Given that the last managing partner was on the East Coast, it wouldn't hurt to have someone on the West Coast."

Among the whispered names for managing partner: Kenneth Doran, an L.A. corporate partner, and Dean Kitchens an L.A. litigation partner and general counsel to the firm. Both are members of the 18-person executive committee and the 5-person management committee.

Ted Boutrous Jr., an L.A. partner on the management committee, declined to confirm any names, but said location will not play a significant role in the selection.

"We haven't, in looking to see who will be the next managing partner, focused on geography," Boutrous said. "We really do function as a national firm."

Consistent moneymaker

Over the years, Gibson consistently has ranked in the top five locally in terms of employment, revenues and profits per partner. The firm has almost 800 attorneys in 11 offices worldwide. Its revenues last year were $469 million, up 12 percent from last year and below only Latham & Watkins among L.A.-based firms, according to the AM 100.

Last year, the firm gained recognition for having attorney Theodore Olson represent George W. Bush in the litigation that followed the presidential election. Bush named Olson U.S. Solicitor General earlier this year.

But the firm has gone through significant cost restructuring to get where it is today.

"About the time I made partner, there was a real problem in terms of profits per partner," said Ken Lamb, head of CIBC World Markets' M & A; group on the West Coast who left Gibson in March after 15 years. "It was still very profitable, but it was not the kind of profits per partner of major competitors, and the cost structure was way out of line in terms of the number of offices."

So the firm closed some offices and cut operating costs.

For some, the changes meant more pressure to bring in bigger profits, which translated into longer hours and a harsher work environment and culture.

Boutrous said the firm doesn't see it that way.

"Part of the firm's history is to get the best people to do the work, attract the best clients and do the best work we can," he said. "We try to make sure we give the client high value, and that seems to be a formula for success."

Martha Jordan, managing partner of Latham & Watkins' L.A. office, said Latham also has been blamed for pushing attorneys harder to reach a bottom line. She said that's just part of today's law firms.

"If you're running your legal practice as a business and providing high quality service to national and international clients, you're going to end up working harder and doing high caliber work of the same level of New York firms," Jordan said.

Gibson has become more global with offices in London and Paris. It's also gained notoriety of late for its contributions to the Bush Administration.

Politically connected

Besides Olson, former partner Robert Bonner was recently named head of the U.S. Customs Service, and local partner Thomas Holliday is a potential candidate for the local U.S. Attorney's office.

But many point out that Gibson is no more politically motivated than other firms. Nor is it any more Republican, having had several Democrats named to positions during the Clinton administration.

Boutrous said the incoming managing partner, who handles day-to-day operations, likely will be more in tune with the firm's global reach. He or she will have to be familiar with the management structure, as well.

And whoever comes on board will likely struggle with the same economic battles facing all firms right now, as they make decisions on costs and layoffs. Even without those factors, heading Gibson will be a significant challenge.

"They'll have to follow a pretty heavy tradition," said Richard Chernick, vice president and managing director of the arbitration practice at JAMS L.A. office who was a Gibson partner from 1977 to 1994. "It's a big responsibility to run a $500 to $600 million business with several thousand people's livelihoods depending on your judgments and skills. The risk of failure is much greater than the rewards. You get blamed if something goes wrong, and nobody compliments you when things go well. It's certainly not something I would do."

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