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By Amy Fletcher

Monday, July 26, 2004

Denver Business Journal -

The Denver legal market long has been dominated by a few homegrown firms. But since the 1980s and '90s, national firms have broken into the market with varying levels of success.

Many national firms have shuttered their offices here -- most recently Milwaukee-based Foley & Lardner LLP in April -- and some are just a shadow of their office size of a few years ago.

When Robyn Meinhardt began working for Foley's Denver office, colleagues told her national firms struggled here if they didn't complete a large, local acquisition.

"I was hoping I could prove that trend wrong," she said. "[Foley & Lardner] just decided that Denver didn't have the level of need for the type of services we provide."

Only a few national or regional firms have remained with a substantial roster of lawyers.

Denver's four largest firms, which range between 109 and 176 lawyers, all were founded here. But they, too, have become regional firms, opening offices in Salt Lake City, San Francisco and Las Vegas.

"They have become more regional in response to the arrival of the national firms as a matter of necessity," said Bob Weiss, president of Denver marketing firm Alyn-Weiss & Associates Inc., who has worked with law firms for 24 years. But several national firms have had trouble here, with a variety of factors leading to their demise, according to lawyers who worked for the closed offices and others who watched their failure.

Perhaps the most visible failures were those firms that closed because of their specialization in the tech industry, which boomed in the late '90s but crashed in 2001.

The most notable failure was that of San Francisco-based Brobeck, Phleger & Harrison LLP, which not only closed its office locally but went out of business altogether in 2003. The failure shocked the legal community.

Brobeck opened a Denver office in 1999 with four attorneys, later moving to the Interlocken business park in Broomfield. With a focus on "New Economy" companies, the firm grew in 2001 to 31 lawyers, who focused primarily on general corporate and securities law, with a small group dedicated to intellectual property and litigation.

Brobeck hit 900 lawyers nationwide at its peak, when it seemed the technology boom would never end. The firm added support staff, and added office space and other infrastructure to support 1,000 or 1,100 lawyers, assuming the firm would continue its rapid expansion, said Denver lawyer Richard Plumridge, who worked for Brobeck for 31 years, more recently in Broomfield.

But then the bottom fell out and the firm had to let people go. By the middle of 2002, the firm was down to 550 lawyers nationwide, he said, but still saddled with the overhead and capital expenses designed for a firm twice that size.

Cooley Godward LLP, based in San Francisco, also fell victim to the dot-com downturn. Cooley opened a local office in 1993, and grew quickly in 1999 and 2000. The firm hit 75 lawyers in 2001, but demand fell off as quickly as the growth, and the firm started letting people go later the same year.

With 36 lawyers, the firm is now half its size at its peak.

"We grew rapidly during the bubble, and then like all well-run businesses, we adjusted ... when things slowed down in the technology sector," said Jim Linfield, managing partner of the Broomfield office. "Our sense is that the technology industry probably hit bottom in the first half of 2003, so we've seen things stabilize and indeed are looking at growth in 2004 and beyond."

But not all firms that shuttered offices or laid off lawyers here specialized in technology.

New York-based LeBoeuf, Lamb Greene & MacRae LLP announced the closure of its Denver office in 2003. With 45 lawyers at its peak in 1999, the Denver office was once the 11th-largest firm in the city.

The firm's Denver office opened in 1993 and at one time was one of LeBoeuf's largest regional offices. Around the time of the closure, there were 10 lawyers, half of whom were bankruptcy attorneys.

LeBoeuf is considered a global powerhouse and has 625 lawyers in 22 offices worldwide. It's known for providing services to the energy, utilities, insurance and financial services industries.

When LeBoeuf opened its Denver office, it brought in well-connected partner Taylor Briggs from New York to manage it. Briggs had a lot of pull in the firm and brought in business from LeBoeuf's other offices. But that began to change when a new managing partner took over in 1995.

Lawyer Jim Holtcamp worked for LeBoeuf from 1997 to 2003 in Salt Lake City, where he's now with Holland & Hart LLP.

Holtcamp said LeBoeuf began to struggle in some markets when it changed its business model for regional offices.

"It has a lot of regional offices that had rate structures and compensation programs that were based on the region they were in ... not New York," he said. "That allowed the firm to attract some very good talent and to move some good work out to the regional offices where it could be cheaper."

But that changed around 2000-01, he said, when the firm's management decided to emphasize per-partner profit.

"And the benchmark was not other firms in Denver, the benchmark was other firms in New York," Holtcamp said.

And those rates were impossible to get in Denver, he said.

Some national firms have been successful in Denver and are among the city's largest. Washington-based Hogan & Harston LLP has 72 lawyers in Denver, Cleveland-based Baker & Hostetler LLP has 47 and there are 34 lawyers in Miami-based Greenberg Traurig's local office.

Some regional firms that don't have offices on the coasts also have found Denver a good place to do business.

Oil and gas didn't draw Phoenix-based Snell & Wilmer LLP in the '80s. But like many other law firms, a then-booming economy fueled by growth in the technology industry was too much for the firm to pass up.

Snell & Wilmer, which has offices only in the western United States, opened its Denver office in 2000, when it brought in some Phoenix attorneys as well as snagging top lawyers from Denver firms.

Snell & Wilmer opened with four attorneys and now has 30.

Minneapolis-based Faegre & Benson LLP is now one of Denver's largest firms, breaking into the top four in terms of the number of lawyers in 2003, a spot historically reserved for firms created here.

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