CC gives west coast the final ultimatum

CC insists on tough billing targets; San Francisco office poised to quit for Orrick

Clifford Chance

’s San Francisco office is this week expected to jump ship to Orrick Herrington & Sutcliffe after the firm’s management delivered a final warning to increase profits or face closure.

It is understood that members of the management, including global managing partner Peter Cornell, met with the nine-partner San Francisco operation last Thursday (17 June) to discuss its future. The main issues surrounded management’s introduction of tough new billing targets for the office.

It is believed that the San Francisco office will have made a decision to stay or go over the weekend.

Sources state, however, that the securities litigation team, which joined Clifford Chance two years ago from the collapsed Brobeck Phleger & Harrison, has already been in talks with Orrick for two months.

Joseph Malkin, partner in charge of Orrick’s San Francisco office and co-chair of the energy and project finance group, and Mark Levie, managing director for the corporate practices, have been leading the negotiations.

Since moving to Clifford Chance, the four-office West Coast practice has made strides in terms of revenues, which reached £30m
for 2002-03. However, it is understood that the operation has not yet made a profit.

The team at the centre of the talks, believed to be made up of eight partners, includes West Coast managing partner and member of the Americas management group Jim Burns and co-head of the securities litigation practice Mike Torpey. Torpey is also a member of the Americas management group.

It is not expected that Tower Snow, who originally headed the Brobeck group which joined Clifford Chance, will be part of the Orrick move. Snow previously spent 16 years at Orrick, where he headed the litigation group.

If the team goes, it is expected that Clifford Chance may decide to keep on its Los Angeles and San Diego offices, but only in the short term.

However, the firm is known to favour keeping a base in Palo Alto, where partner Daniel Harris, who last week was elected to the firm’s partnership council, practises.

Meanwhile, a decision on the multimillion-dollar lawsuit brought against Snow and Clifford Chance last year by a number of former Brobeck employees is expected. The bankruptcy trustee for Brobeck is expected to come to a conclusion on whether or not to move forward with the claim by early July.

Clifford Chance and Orrick were unavailable for comment.