18 Lawyers Quit Big County Firm, Set Up Shop in Irvine
Five partners and as many as 13 associates have broken away from the second-largest law firm in Orange County and have opened their own office in Irvine.
The defections from the 80-lawyer Newport Beach branch of Gibson, Dunn & Crutcher, a Los Angeles-based law firm with a total of 550 lawyers, marks the first time in the company’s 97-year history that a group of partners has broken away.
And the new Irvine law firm of Pettis, Tester, Kruse & Krinsky--which opened its doors Monday--becomes the latest in a growing roster of Orange County-based law firms.
Drawn by the area’s burgeoning business and entrepreneurial community--and pushed by the invasion of New York firms invading California turf--several groups of lawyers from major area law firms have switched allegiances or struck out on their own in the past year.
They include a team of lawyers from the Newport Beach branch of the now-defunct L.A. office of Memel, Jacobs & Ellsworth and the entire bankruptcy department of the Newport Beach firm of McKittrick, Jackson, DeMarco & Peckenpaugh. The eight bankruptcy specialists set up shop in Newport Beach in February.
Another addition is expected in July, when the 300-lawyer San Francisco law firm of Brobeck, Phleger & Harrison expects to open a Newport Beach branch. The three corporate attorneys and one litigator will be setting up shop to serve such clients as Orange-County based Caremark and Safeguard Health Enterprises, said John Larson, a member of Brobeck, Phleger’s executive committee.
“A lot of (Orange County) companies are emerging growth companies, and we have a major practice in those areas,” Larson added..
Some of Same Reasons
The former Gibson, Dunn lawyers gave some of the same reasons for starting their own shop this week.
Alan W. Pettis--formerly the partner-in-charge of the Gibson, Dunn’s Newport Beach office and reported to be one of the best business generators in the county--said he made the switch because the time is right economically.
“It’s an advantageous time to start up a new business because of the growth we perceive in Orange County. If we start with a new venture now, we can be part of that growth. . . . “
Pettis, 46, a corporate securities specialist and managing partner of the new firm, is one of the best known of the defectors. The other big name in Orange County legal circles is Bruce Alan Tester, 45, who has made a reputation representing developers, landowners and foreign investors.
Pettis and Tester said Monday that the new firm now has seven lawyers, all partners. They include four real estate specialists, two corporate lawyers and one tax attorney. They refused to answer questions about the new firm’s growth or whether they anticipate luring away any Gibson, Dunn clients.
But their departure from one of Los Angeles’ oldest and most respected law firms shocked their partners as well as the Orange County legal community.
Gibson, Dunn was ranked as the fourth most profitable law firm in the United States in 1985, with gross revenue of $125 million, according to a survey that year by American Lawyer, a trade publication.
Partners in the firm bring in average annual profits of $355,000 each, according to the survey, and have a top billing rate of at least $235 per hour. The firm reportedly netted $56.5 million in 1985.
But Gibson, Dunn recruits only the legal elite, lawyers who--once becoming partners--generally stay with the firm for their entire legal careers.
Thus, competitors in Orange County were surprised at news of the defections of Pettis and the others.
“I thought they were lifers,” said Pat Arrington, head of the corporate department at Costa Mesa-based Rutan & Tucker, Orange County’s largest law firm with more than 100 lawyers.
There was astonishment, as well, at the 23-year-old Newport Beach office of Gibson, Dunn. The branch, which began with one lawyer practicing from a trailer on Irvine Co. property, has since lost that client but gone on to represent such heavyweights as Fluor Corp., Ultrasystems Inc., Comprehensive Care Corp. and Financial Corp. of America.
Gibson, Dunn’s new partner-in-charge in Newport Beach, Thomas B. Pitcher, said he learned of the group’s plans to leave Thursday night, when Pettis came to Pitcher’s home.
“They didn’t give us a whole lot of notice,” said Pitcher, who suspects plans for the defection must have been under way for “a couple months.” Pitcher said Pettis told him that 13 associates and five partners were leaving.
Despite the short notice, Pitcher said those leaving are “very fine lawyers” and characterized the split as amicable. “They’ll take some clients who have worked with them, but the firm is an institution and (most) clients don’t go chasing lawyers all around. We expect to go on.”
