Los Angeles-based Latham & Watkins LLP is quietly developing a New York state of mind as it propels to the top tier of U.S. firms with high-dollar corporate and finance deals, according to new rankings.

"If you take a look at a list of the eight firms ahead of us, my guess is seven are in New York," said Peter Kerman, Latham's global chairman of the corporate department who represented Kohlberg Kravis Roberts & Co. in the recent $6.6 billion sale of Toys 'R' Us Inc. "Brick by brick, every year, we get more improvements and a little bit larger in New York. Now, we're at a point where New York is bigger than the L.A. office."

In addition to Toys 'R' Us, Latham's recent deals included Amgen Inc.'s $1.3 billion purchase of Tularik Inc., Harrah's Entertainment Inc.'s $9.4 billion acquisition of Caesars Entertainment Inc. and the $4.85 billion sale of Metro-Goldwyn- Mayer Inc. to Sony Corp.

Growth in the New York office, as well as a rapid growth strategy, has helped Latham generate enough high-billed corporate work to compete with the New York firms.

But its success also comes from handling more mergers and acquisitions for publicly-held companies rather than the small and mid-sized private businesses that make up much of L.A.'s economy. The firm is also representing investment banks, private equity firms and other financial entities that bankroll the dealmaking.

In joining the ranks of the New York firms, Latham has surpassed its local rival in business deals, Gibson Dunn & Crutcher LLP. While Gibson continues to be the most profitable firm in Los Angeles, generating $1.5 million per partner last year versus Latham's $1.4 million, the firm generated half the revenues of Latham last year.

'Less parochial' American Lawyer magazine's "Corporate Scorecard" recently placed Latham among the nation's top five firms in eight out of 24 categories of corporate deals brokered during 2004. Latham, whose top rankings include serving as legal counsel to both the issuers and underwriters of initial public offerings and high-yield debt offerings, was trumped only in number of categories by three other firms.

"What the ratings reflect is the fact they have become less parochial and been willing to grow in New York and internationally," said James Hunt, managing partner at Santa Monica-based Bison Capital Management, a private equity firm that Latham has represented for more than a decade.

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