Pillsbury Winthrop Shaw Pittman LLP’s Costa Mesa office is struggling to stay alive in Orange County’s increasingly competitive legal market.
The San Francisco-based law firm, like many global and national firms with offices here, is one of many vying for work from the county’s small and midsize businesses.
But with more than 50 sizable law firms in the county, competition for clients and lawyers is getting steeper and Pillsbury has been on the losing end.
Pillsbury once counted about 20 lawyers in OC. But a series of departures in the past year left it with two OC-based lawyers and three others who split their time between here and Los Angeles.
The biggest blow came to Pillsbury a year ago when seven lawyers left to join the Irvine office of Jones Day, which now counts about 40 OC lawyers after a series of lateral hires, including the recent addition of two partners from Morrison & Foerster LLP’s Irvine office.
Jones Day brought in the Morrison & Foerster lawyers to anchor a labor and employment practice in Irvine, an area that managing partner Richard Grabowski said is likely to remain steady despite a weak economy.
Other lawyers have left Pillsbury’s OC office in the past year for firms such as Greenberg Traurig LLP in Costa Mesa.
Some at local law firms speculate Pillsbury could close its doors in Costa Mesa because the costs of rent and support staff could be too high for an office with two to five lawyers.
It’s unclear whether more lawyers are set to leave Pillsbury. Managing partner Craig Barbarosh is squashing rumors.
“We are and remain committed to serving our clients in Orange County,” Barbarosh said. “Pillsbury did lose some partners in the Orange County office in mid-2007. But the office has since stabilized.”
Viable Practices
Pillsbury still counts a bankruptcy, real estate and litigation practice.
The firm boasted nearly a 14% rise in profitability last year, according to Barbarosh.
This year, the office’s bankruptcy and restructuring practice is keeping busy as a troubled economy is creating business.
The firm represents companies that need investment and buyers in distressed merger and acquisition transactions, according to Barbarosh.
Barbarosh’s clients include institutional lenders, investment funds and companies with financial and operational distress, he said.
The firm’s subprime industry practice, launched last March, is another growth area for the office, according to Barbarosh.
Pillsbury’s lawyers are working on bankruptcies, litigation and regulatory and real estate issues that have resulted from last summer’s mortgage meltdown and the subsequent credit crunch, Barbarosh said.
“Like all law firms right now, we are watching the U.S. economy carefully, including how it relates to real estate work and new business growth in Orange County,” Barbarosh said.
The firm will hire additional lawyers as the need arises, he said.
Pillsbury isn’t the only firm in OC to face tough times amid increased competition for clients and lateral hires.
Morrison & Foerster had 30 lawyers in Irvine as of the Business Journal’s January list of law firms. It now is down to 21 lawyers, according to its Web site.
Morrison & Foerster lost corporate practice partner Craig Mordock to the Costa Mesa office of Bingham McCutchen LLP in February and labor and employment lawyers Robert Naeve and Steven Zadravecz to Jones Day this month.
Some also speculate that Morrison & Foerster could close its local office.
A variety of factors are causing big firms to shrink in OC, some legal sources say.
The county’s economy, which is made up of mostly small to midsize companies, makes it difficult for big firms to nab clients who are willing to pay their higher rates, experts said.
While firms are struggling here, many are growing elsewhere.
Pillsbury isn’t any different. The firm beefed up its headcount in New York, Houston and London, Barbarosh said. n
