When Manatt Phelps & Phillips threw a party to celebrate the opening of its San Francisco office last month, the event drew big names: Mayor Gavin Newsome, state Supreme Court Chief Justice Ron George, state Attorney General Jerry Brown.
In greeting them and the rest of the crowd, managing partner Bill Quicksilver emphasized the firm's commitment to growing in the San Francisco Bay Area. But what he didn't reveal was that Manatt was on the verge of expanding its 12-attorney presence quickly and dramatically.
The L.A.-based law firm announced Nov. 30 that it would combine with San Francisco firm Steefel Levitt & Weiss LLP in February.
As a result, Manatt Phelps will have 50 lawyers in the city, highlighting the firm's selected growth strategy, which is likely to propel it into the ranks of the nation's top 100 law firms.
"This combination enhances our resources nationwide but most importantly it gives us much better positioning in Northern California," Quicksilver said. "It extends our reach in San Francisco and provides us a better platform to recruit additional talent and service clients."
The deal will bring the attorney headcount at the law firm, which has offices in New York, Washington, D.C., and other cities, close to 360 and could boost its revenue by more than $30 million.
In American Lawyer magazine's ranking of law firms for 2006, Manatt Phelps came in 112th, with revenue of $212 million. That was an increase from the $196 million the firm generated in 2005. Quicksilver said he expects revenues to rise again this year.
The firm's selected growth strategy seems to be working.
In recent years, most top tier law firms have committed to one of several growth, or survival, strategies: Some have emerged as intensely regional firms or developed nationally focused boutique practices, while others have morphed into or been acquired by national firms with offices all over the country.
Manatt Phelps has taken a combination approach: The firm has concentrated on California, while also growing in Washington and New York.
"We knew we needed to grow but it has never been about being in a bunch of far-flung secondary markets like Dallas or Denver," said Paul Irving, a firm co-chairman. (Manatt Phelps has an Albany office, but that came as part of a package deal when it picked up a Manhattan firm.)
The expansion has been driven both by mergers with local firms and new hires.
"Manatt has shown that it can slowly bring along a new office by selecting individual lateral partners and that it can also integrate a large group of lawyers following a splashy merger," said Jason Yuen, a Santa Monica-based legal recruiter with Alan Miles & Associates, who has placed partners at the firm.
Its L.A. office is a key growth area, too. In recent months, Manatt Phelps has brought in several lateral partners, including IP attorney Stephen Lobbin from Foley & Lardner and music attorney Gary Gilbert from Baker & Hostetler.
The firm was founded in L.A. in 1964, and opened an office in Washington in 1974 as part of an expansion that reflected the firm's political and government ties. Co-founder Charles Manatt has been deeply involved in Democratic politics over the course of his professional career and served as chairman of the Democratic National Committee.
Manatt is still affiliated with the firm and is based in its Washington office. The other two name partners, Thomas Phelps and L. Lee Phillips, also remain with the firm.
Manatt Phelps had tried San Francisco before, but a 1979 effort was short-lived. In 1999, it opened a Palo Alto office, its first sustained addition to the L.A.-Washington axis.
Since then, Manatt Phelps has established an outpost in Sacramento; New York City; the Albany, N.Y., office; and Costa Mesa.
Its San Francisco merger has an L.A. connection: Because Steefel Levitt also runs a small Los Angeles office in downtown, the combination could give the famously Westside law firm a new local outpost. The firm has said the plan is to close that site, but no final decision has been made. Presently, Manatt Phelps has a total of eight official offices, not including Steefel Levitt's downtown location.
Eight lawyers in 1973
When George Kieffer, head of the government and regulatory policy practice, joined the firm in 1973 it had just eight lawyers.
"At that moment in time the rumor was it was a very hot small firm. Chuck Manatt had been elected state chair of the Democratic Party. The firm represented the Lakers and the owner of the team back then, Jack Kent Cooke," Kieffer said. "Manatt convinced me that there was great opportunity here and he was right."
Over the course of his career at the firm, Kieffer has represented clients including Toyota Motor Sales U.S.A. Inc. and the Metropolitan Water District of Southern California on a variety of matters, and continued the firm's tradition of civic involvement by serving as chair of the commission that rewrote the Los Angeles City Charter.
Kieffer and other senior partners at Manatt Phelps have said that a key part of its success has been an entrepreneurial culture present since the firm's early days.
"We value entrepreneurs and reward them," said Lisa Specht, a partner who joined the firm in 1976 after graduating from law school. "We don't have any lock step systems, which means that people have both more freedom and responsibility."
While in some ways the firm has remained the same, it has evolved from its regional roots.
"We obviously started as a regional firm and we essentially remained a regional firm for many years but that description doesn't quite apply anymore," Kieffer said.
At one time the firm was known for its business with locally based companies, and while the firm's client roster still has many Los Angeles businesses, it now includes a large number of national corporations including AT & T;, Siemens Transportation and Credit Suisse First Boston.
"Thirty years ago our biggest client was probably a bank in Bakersfield," said Gordon Bava, a co-chairman of the firm. "And while we still do work for the small banks, we also represent Bear Stearns and Citigroup."
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