Orange County’s largest law firms saw a 5% gain in lawyers in the past year, boosted by work on patents, deals and the overall strong economy.
The 53 largest firms operating here added 91 lawyers in the past year for a total of 2,053, according to this week’s Business Journal list.
The list ranks firms by the number of lawyers working in the county.
The gain outpaces that seen on last year’s list, when the largest firms here grew lawyers at a 3% clip. This marks the fourth straight year of gains for firms here.
Managing partners chalk up the gains to growth in work on patents and other intellectual property as well as work on private equity investment deals.
Eight of the top 10 firms added lawyers in the past year, with one flat from a year earlier and another down 3%.
The big firms drove the list’s overall gain.
Among all 53 firms, there were 15 decliners, 33 gainers and five reporting no change.
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Costa Mesa-based Rutan & Tucker LLP, long OC’s largest law firm, held onto the No. 1 spot, despite reporting no overall growth in lawyers.
Rutan & Tucker had 144 lawyers, unchanged from a year earlier.
The firm did some hiring, though not enough to offset departures.
Rutan made lateral hires and brought on recent graduates from its summer class, said L. Ski Harrison, founding partner of the firm’s education law practice.
Billings per attorney rose by $25,000 in 2006 from a year earlier, he said.
Like other firms, Rutan is seeing a slowdown in real estate work with the shift in the housing market.
The change was expected, Harrison said. It’s being partially offset by more work on apartments, he said.
Rutan is looking to expand.
In November, the firm expanded the lease for its Costa Mesa headquarters, adding 12,000 square feet for a total of 112,000 square feet.
The lease, which includes an option for more space, is through 2021.
“Milestones for 2007 include major renovations to our office space, continued sustained growth of the office both in terms of collections and the number of attorneys practicing here, and continuing our branding efforts to make Rutan more visible,” Harrison said.
No. 2 Irvine-based Knobbe, Martens, Olson & Bear LLP saw the biggest gain in lawyers among the top 10 firms.
It added 13 lawyers for an 11% gain to 129 in OC. In 2005, Knobbe grew its lawyers by 13%.
Knobbe’s surge is one of the most notable trends playing out among the top 10 firms. If Knobbe continues to grow at double-digit rates, it could end up challenging Rutan for the top spot.
The firm, which specializes in patent work, has hired to keep up with demand for its services, said Steve Nataupsky, who this month was elected Knobbe’s managing partner.
“We expect all of our new hires to be key to our continued success and growth,” he said. “Each new lawyer has a special technical expertise, advanced degree, federal clerkship experience or industry work experience that will make them valuable to our firm.”
Knobbe saw growth in litigation as well as in patent and trademark application and licensing work last year, Nataupsky said.
This year, Knobbe is looking to expand its offices, he said.
No. 3 Stradling Yocca Carlson & Rauth of Newport Beach grew its OC lawyer count by 7%, or seven people, to 108.
The gain reversed a 6% decline at Stradling a year earlier.
The firm recently opened an office in Santa Barbara, growing its total number of lawyers by 7% to 119.
Rounding out the top five: No. 4 Los Angeles-based Latham & Watkins LLP’s Costa Mesa office, which added eight lawyers, a 10% rise to 85; and No. 5 Los Angeles-based O’Melveny & Myers’ Newport Beach office, which grew 9% to 72 local lawyers.
The top 10 saw a couple of subtle shifts.
O’Melveny & Myers moved up a spot from last year as Los Angeles-based Gibson, Dunn & Crutcher LLP’s Irvine office saw a 3% decline to 69 local lawyers and moved to No. 6 this time around.
Los Angeles-based Allen Matkins Leck Gamble Mallory & Natsis LLP’s Irvine office grabbed the No. 8 spot with 60 local lawyers, outgrowing Irvine’s Jackson DeMarco Tidus Peckenpaugh at 58 lawyers.
The biggest percentage gain came from the bottom of the list.
Boston-based Bingham McCutchen LLP’s Costa Mesa office added 13 lawyers, a 260% gain to 18 overall. The increase earned Bingham a spot on the list in a tie for the bottom slot.
Seven of the new lawyers were litigators recruited from Stradling, Yocca, Carlson & Rauth. Five land use lawyers were hired from No. 35 San Francisco-based Sedgwick, Detert, Moran & Arnold LLP’s Irvine office, which slipped from No. 27 on last year’s list.
Bingham plans to hire more lawyers this year and expand into private equity and other areas, said James Loss, managing partner of the Irvine office.
The biggest decliner on the list, both by percentage and actual number of lawyers, was No. 35 Washington, D.C.-based Crowell & Moring LLP’s Irvine office.
The firm lost seven lawyers, a 23% drop. A year earlier, Crowell grew its lawyer ranks by 15% and was No. 20 on the list.
Crowell & Moring opened a New York office last year, but “Irvine experienced some departures, including one partner,” said Randall L. Erickson, the firm’s co-administrative partner.
The Irvine partner left for family reasons, according to Erickson.
Another lawyer relocated to Crowell’s Washington headquarters. Another moved to Fresno.
One even adopted four Ethiopian children, Erickson said.
“Overall, the office enjoyed a wonderful year with revenues on par with 2005 and profitability up by 10% per equity partner,” he said.
The list counts five new entries, including Bingham.
No. 39 Irvine-based Grant, Genovese & Baratta LLP was the highest debut. The firm saw a 21% jump to 23 attorneys.
Two newcomers tied for No. 44: Washington, D.C.-based Ross Dixon & Bell LLP’s Irvine office, which grew 54% to 20 lawyers; and Irvine’s Wesierski & Zurek LLP, up 25% to 20 lawyers.
Irvine-based Koeller, Nebeker, Carlson & Haluck LLP tied with Bingham for the No. 48 spot with 18 lawyers, up 13%.
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State High Court to Take Up Employee Agreements
California employers and labor advocates will be watching closely when the state Supreme Court takes up the issue
of non-compete agreements and their validity.
In the meantime, the issue remains in a bit of a limbo after the California Appeals Court in October issued a ruling that appears to invalidate the practice.
“The California Legislature didn’t want to force people to retrain and enter into new careers any more than they wanted them to have to move 50 to 100 miles away to engage in their business,” said Justice Richard Aldrich of the Appellate Court of California, 2nd Appellate District, which issued the recent ruling. “We interpreted California statutes to mean what they say and any restriction on a person’s right to gainful employment is invalid and unenforceable under California law.”
The ruling stemmed from a case involving Los Angeles tax manager Raymond Edwards, who signed a standard non-compete agreement when he started work for Arthur Andersen LLP in 1997.
When HSBC Holdings PLC bought Andersen in 2002, Edwards was required to sign a termination of the non-compete as a condition of his transfer to the new company. When Edwards refused to sign it, Andersen withheld severance benefits and HSBC withdrew his job offer.
Edwards sued Andersen and HSBC in 2003 for interference with economic advantage, among other claims. A Los Angeles Superior Court dismissed Edwards’ claims on summary judgment, saying both the Andersen non-compete and HSBC termination of non-compete were valid.
The California Supreme Court has since agreed to hear the case in its next session, and the appellate opinion is no longer law. The Supreme Court’s decision may have an impact on whether employers offer severance benefits in the future.
The court also ruled that the HSBC waiver was invalid because it required Edwards to give up normal indemnities given by the California Labor Code, including one’s ability to sue their employer.
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Los Angeles Business Journal
