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Foreclosure Attorney Ineligible to Practice Law

Gene W. Choe, founder of what was once one of the city’s largest law firms fighting home foreclosures, has been ruled ineligible to practice law in California pending further disciplinary hearings.

Choe had been accused of taking retainers and monthly payments from clients facing home foreclosure but doing little or nothing to help them. He was also accused of violating state regulations banning attorneys from taking money up front for loan modification services.

The State Bar Court of California ordered Choe into involuntary inactive enrollment May 1, finding that his conduct “poses a substantial threat of harm to the interests of his clients and the public.” The ruling is in effect pending further disciplinary hearings. The court ruled there is a “reasonable probability” that Choe will be found guilty of professional misconduct at future hearings, which could result in his suspension or disbarment.

At its peak, Choe’s Koreatown firm, the Law Offices of Gene W. Choe, had more than 35 attorneys and 50 administrative staff servicing more than 1,300 active clients. But a mass exodus occurred last year during the State Bar’s investigation and Choe has since filed for personal bankruptcy. Choe also changed his firm’s name to GWC Group PC.

The court’s decision also revealed that State Bar investigators have cooperated in a criminal investigation into Choe’s actions by the state Attorney General’s Office. The agencies cooperated on the execution of a search warrant on his home in October.

Choe, 50, did not comment. He has previously told the Business Journal that he was not systematically ripping off clients, but that the firm became difficult to manage as its workload exploded and resulted in legal mistakes made by employees.

Hot Destination

In recent months, the Century Plaza Towers in Century City have become a destination for out-of-town firms trying to make a bigger splash locally.

Kansas City, Mo.’s Polsinelli PC, which has grown to 11 L.A. attorneys since opening a six-attorney outpost here in 2011, moved into 26,000 square feet in one of the twin 44-story towers in March. About the same time, Philadelphia’s Blank Rome LLP, which has grown to 26 L.A. attorneys from five since opening an office here in 2009, signed a 10-year-lease there for 25,000 square feet. Both firms moved from elsewhere in Century City.

Now, an expanding home-grown firm has joined the neighborhood. Six-attorney firm Affeld Grivakes Zucker LLP has moved into about 6,000 square feet in one of the towers, at 2049 Century Park East. The firm, co-founded by three attorneys in 2010, previously occupied 3,000 square feet at 12400 Wilshire Boulevard in West Los Angeles.

Attorney Cheryl Priest Ainsworth said that moving into a marquee space was a way to help establish her small firm’s brand and make way for future growth.

“It’s allowed us to move on up, if you will, and become a little bit more high profile,” she said. “It’s a draw for firms like us. We started out particularly small and the idea is that we’re growing.”

Unlike many other business litigation firms, Affeld Grivakes focuses heavily on contingency cases. It tends to represent individuals and small to medium-size businesses in insurance cases or partnership disputes.

About 60 percent of its work is business litigation taken on contingency, Ainsworth said. The firm’s cut ranges between 20 percent and 40 percent of winnings after recovered losses.

“These claims may arise out of businesses falling apart and the money may be tied up,” she said. “Clients are unable to pay attorneys’ fees and retainers and this allows them the opportunity to fully litigate cases and try them.”

Fast Start

As far as small but growing firms go, West L.A.’s Goldberg Lowenstein & Weatherwax LLP is one of the fastest among them. Since its founding last spring, it has grown to 26 attorneys in three offices from just three attorneys in one office.

The firm focuses on intellectual property work and was co-founded by former attorneys at Century City IP powerhouse Irell & Manella LLP. Nearly half the attorneys are former Irell lawyers.

Founding partner Nathan Lowenstein said the firm could hit 40 attorneys by the end of the year. It has not used recruiters so far, relying instead on personal connections to hire.

“It’s humbling and fantastic that we have this level of growth,” he said. “I wouldn’t have predicted it.”

Lowenstein, 34, said there is a market for big firm-quality work at lower rates. Associates at the firm charge up to $490 an hour, compared with the $700 an hour that larger law firms can bill for associate work. He declined to give partner rates, but said they were significantly lower than at big firms.

The firm’s specialty is patent litigation, with clients in the semiconductor, advertising and television industries. It also has branched out into antitrust, business litigation, corporate work and bankruptcy.

News & Notes

Lisa Specht, a partner at West L.A.’s Manatt Phelps & Phillips LLP, has been elected chairwoman of the Music Center. Specht has served on the Music Center board since 2007 and has acted as vice chairwoman since 2009.

Staff reporter Alfred Lee can be reached at alee@labusinessjournal.com or at (323) 549-5225, ext. 221.

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