When a small Los Angeles law boutique specializing in white-collar cases merged with a national firm earlier this month, it pointed out a trend.

The merger of the seven-attorney Lightfoot Vandevelde Sadowsky Crouchley Rutherford & Levine LLP with national firm Crowell & Moring LLP was added evidence that white-collar defense boutiques are feeling more pressure to join larger firms, which have been stocking up their white-collar defense departments.

In January, for example, the white-collar boutique firm of Beck De Corso Daly Kreindler & Harris LLP disbanded, and most of the firm's lawyers split between the L.A. offices of Chicago-based Mayer Brown LLP and San Francisco-based Orrick Herrington & Sutcliffe LLP.

In this post-Enron world of much greater scrutiny of company financial practices, white-collar defense work has grown not only more abundant but more complicated and specialized. That means that bigger law firms tend to have the edge because they can employ many lawyers with different specialties.

White-collar defense work has gotten more lucrative, too, because the cases are often high-stakes matters involving corporations and their executives. Litigators in the practice area can demand billing rates upward of $700 an hour.

Among the most prevalent of white-collar cases in recent years was a spate of prosecutions involving executives accused of improperly awarding themselves stock options at bargain prices. Being that the accused were wealthy, firms could charge top dollar.

"White-collar litigation has become a profitable source of revenue for firms now," said Alan Miles, founder of Santa Monica-based Alan Miles and Associates Inc. "Because of the onslaught of backdating cases and other not-so-kosher behavior white collar has enjoyed a boom."

In recent years, large law firms have aggressively recruited high-profile litigators to expand their white-collar presence in Los Angeles. Randall Lee established an L.A. office for Wilmer Cutler Pickering Hale and Dorr LLP in September 2007 when he joined the firm after serving as a regional director for the Securities and Exchange Commission. Last year, Kirkland & Ellis LLP hired white-collar litigators Mark Holscher and Jeffrey Sinek to increase the firm's capabilities in Los Angeles. A hiring spree in 2006 resulted in Los Angeles stalwarts Gibson Dunn & Crutcher LLP and Irell & Manella LLP hiring former U.S. Attorney Debra Wong Yang and former Enron prosecutor John Hueston, respectively.

This heightened competition for clients, coupled with the expanding scope of white-collar cases, is leading L.A. boutique firms to join forces with their national brethren.


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