Clifford Chance Rogers & Wells (CCR&W) is circling Brobeck Phleger & Harrison’s San Francisco office as it negotiates plans to take on a number of securities litigation partners to open an office in San Francisco.
It is understood that the firm will vote on Friday on the move, which could see the firm take on up to 11 partners, providing it with its first presence on the West Coast. Two-thirds of the Clifford Chance partners will need to vote in favour for the plans to proceed.
Brobeck’s breakaway group, which met Clifford Chance partners in New York a fortnight ago, is being led by Tower Snow and includes: Paul Bessette, Sara Brody, James Burns, James Kramer, Dean Kristy, James Lico, Kevin Muck, Susan Muck, Michael Torpey and Robert Varian.
The group has an impressive list of clients, including Viacom, Telefonaktiebolaget LM Ericsson, Georgia-Pacific, Nike, Sun Healthcare Group, Credit Suisse First Boston, Merrill Lynch, Blockbusters Entertainment Group, Dow Chemical and BNP Paribas.
Explaining the decision by the Brobeck partners, one source close to the group told The Lawyer: “The platform provided by Clifford Chance is much more stable than the one provided by Brobeck.”
CCR&W currently has 17 securities litigation partners in the US, whose clients include leading financial institutions such as ABN Amro, Alliance Capital, Bank of America, Citigroup, JP Morgan Chase, Merrill Lynch, Morgan Stanley and Schroder Salomon Smith Barney. The practice is led by US managing partner Jim Benedict.
The departures would be a massive setback for Brobeck. The firm has relied on its litigators to ensure that it has been able to quell some of the problems arising from the slump in its core markets. This voluntary exodus follows hard on a series of associate redundancies and salary freezes.
Brobeck became synonymous with the technology boom of 1999 and 2000. But after a troubled 2001, the firm slipped from its turnover top-spot in San Francisco. It lost out to local rival Morrison & Foerster following a 6 per cent drop in revenue to $447m (£306.6m). Profits per equity partner plummeted by a massive 44 per cent to $660,000 (£453,000).
Litigation is one area that Brobeck can ill afford to lose, particularly as securities-related claims are on the rise in the West Coast. Other firms in the Bay Area have been bolstering their litigation capabilities.
There is also a cultural issue. Senior partner Snow has long been regarded as a figurehead for the firm. When he was chairman, Snow made it plain that he would not countenance staff cuts as a response to the economic downturn. He resisted pressure to capitulate for some time, before failing to be re-elected as chairman last year.
As soon as he was replaced as head of the firm, the layoffs began. At that time, Snow said that he was considering a number of roles, including an academic post.
Richard Gordon QC, barrister, Brick Court Chambers