Buffett Finds Aide at L.A. Law Office That Reflects His Style : Scandal: The new Salomon Bros. chief hired a general counsel from a firm founded by friend Charles T. Munger.
The Salomon Bros. scandal has brought unaccustomed attention to the small, snooty and deservedly prestigious Los Angeles law firm of Munger, Tolles & Olson.
Billionaire investor Warren E. Buffett, now directing repairs at the wounded Wall Street firm, announced Sunday that he had recruited Robert Denham as the new general counsel for Salomon. Denham has been managing partner of Munger Tolles, founded in 1962 by seven lawyers, including current U.S. Trade Representative Carla Anderson Hills. But the founder whose influence still shapes the firm, though decades ago he left active law practice for investing, is Charles T. Munger, Buffett’s longtime personal friend and primary business partner.
Indeed, Munger Tolles, a firm better known in legal than public circles, considers itself to be driven by the same sort of homely, roll-up-the-sleeves standards that Buffett has come to characterize. In an age when many law firms lure clients with marketing and public-relations campaigns, Munger Tolles still takes a simpler path.
“Charlie’s philosophy,” says partner Allen Katz of Munger’s original concept, “was that the best way to get new business was to worry about the work on your desk.”
“They are just an exceptionally fine law firm,” agrees Michael R. Mitchell, a securities lawyer, former chair of the California State Bar ethics committee and frequent opponent of the firm in court.
“In the quality of work they do, they are the best in town,” Mitchell says.
That work has been diverse and at the quiet center of many highly public controversies:
* Partner Ronald L. Olson, frequently called one of California’s best “rainmakers,” or generators of legal business, is chair of the American Bar Assn. committee reviewing the fitness of Clarence Thomas to sit on the U.S. Supreme Court.
* John Spiegel, another partner, was lead attorney for the Christopher Commission study of the Los Angeles Police Department.
* The firm represented the Philippine government in its efforts to recover funds from Imelda and Ferdinand Marcos.
* Another big client is Alyeska Pipeline Service Co. and its member oil companies (except Exxon Corp.) in the civil suits stemming from the Exxon Valdez oil spill.
* The firm has been lead counsel in the restructuring of Vons Cos., a grocery chain, over the past few years.
* Household-name clients for which it has also done substantial work include Northrop Corp., Litton Industries, Southern California Edison, Bank of America, Unocal Corp. and MCA Inc.
* Lawyers from the firm have done pro bono work or served on boards for causes ranging from the Western Center for Law and Poverty to the homeless of Los Angeles.
Broad interests, in fact, have been part of the culture at Munger Tolles from the beginning. At least two partners have degrees from music conservatories; several are former college professors.
“They think of themselves as a more intellectual bunch than most law firms,” says Anne Larin, a former associate now on the legal staff at General Motors Corp. “And I liked that.”
Another singularity is the firm’s upside-down ratio of partners to associates.
While most firms have two less-experienced associates for every partner--commonly using associates to do much of the routine work--at latest count, Munger, Tolles had only 38 associates and 52 partners.
“We are trying to render economical services to clients,” Katz explains, “and clients would prefer not to train big hordes of associates.”
Even the annual share of profit among partners is divvied up in an uncommon way, reflecting a democratic bias that goes back to the firm’s roots.
Every year, the partners openly rate each others’ efforts by assigning--on signed ballots--how much they think each colleague deserves. The ballots are arranged on a grid, for all to see and discuss. A committee of partners then reaches consensus on each share.
Though he has an office in the same building and remains “of counsel” to the firm, Charles Munger has in recent years become active in legal publishing. He and business associates control the corporation that publishes the L.A. and San Francisco Daily Journals, California Lawyer magazine and other enterprises. Munger also sits as vice chairman of Buffett’s Berkshire Hathaway and as chairman of Pasadena-based Wesco Financial Corp., the parent of Mutual Savings & Loan. Berkshire owns 80% of Wesco’s stock.
Meanwhile, back at his old shop, as other law firms cut staff in tough economic times, Munger Tolles this fall will hire 14 new attorneys, the largest batch of associates in its history.
Times staff writer Donna K. H. Walters contributed to this story.
* SALOMON UNDER FIRE
The Fed was urged to suspend Salomon Bros. as a primary dealer in government securities. D3
