Biglaw, Boutique Law Firms, Musical Chairs, Partner Issues, Partner Profits, Preston Gates & Ellis, Small Law Firms

Musical Chairs: A Departmental Defection at K&L Gates in Seattle

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We’ve previously discussed the trend of partners leaving Biglaw to launch their own firms. We’ve seen a lot of this action in New York and D.C., home to such well-regarded boutiques as MoloLamken, started by former Shearman & Sterling and Baker Botts partners, and BuckleySandler, started by former Skadden partners.

It’s happening out on the West Coast, too. In the fair city of Seattle — one of my favorite places in the entire United States, especially when it’s not raining — about half a dozen partners are leaving K&L Gates to start their own shop. One Queen Emerald City tipster described this news as “the most exciting thing that has happened here since Kurt Cobain died.”

UPDATE (4/5/11): The official press release about the new firm, Pacifica Law Group, appears after the jump.

Who are the lawyers that are leaving, and why? Let’s find out….

We’ve heard about this news from several sources. It was summarized quite succinctly in this recent office-wide email by Rob Mitchell, K&L Gates’s administrative partner for the Pacific Northwest:

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From: Robert Mitchell
To: SE ALL
Subject: Transitions

Gerry Johnson, Stacey Crawshaw-Lewis, Deanna Gregory, Paul Lawrence, Faith Pettis, and Matt Segal have announced their resignations from our firm. They will be opening a boutique law office, Pacifica Law Group. We wish them well and look forward to working with them in serving common clients. –Rob

We reached out to K&L Gates for this story, referencing the Mitchell email. A spokesperson for the firm declined to comment on the departures.

One Seattle tipster described the six departing partners as comprising “most of the public finance group, which was the largest municipal bond practice in the northwest prior to the departures.” This source noted that Gerry Johnson was a former managing partner of Preston Gates & Ellis, prior to the merger that created K&L Gates, and described Paul Lawrence as “a high-profile litigator.”

(Word on the street is that they’ll be joined at their new firm by Jay Reich, a former K&L Gates partner who left the firm to serve in the Obama Adminisration. Reich went to the Department of Commerce in May 2009, where he served as Deputy Chief of Staff.)

There is a bit of a backstory behind the departures, according to a second source:

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[S]ome higher-ups [at K&L Gates] got wind of the planned defection, so the defecting partners (“DP”) had to leave earlier than planned, without office space ready or a website. Apparently, the DP were chafing under the reins of their new-ish Back East overlords. (Partners at the former firm, Preston Ellis & Gates, were the BIG BOYS in town, and I’ve generally gathered that people here don’t like to be reminded that they are now just a satellite office.)

These sentiments were echoed by our original tipster:

[T]here has been some general unhappiness at the Seattle office of K&L since the merger, because post-merger they are just another satellite office. That is probably even more true since the Seattle office lost the Microsoft business. (The Gates in K&L Gates is Bill Gates’s father.)

The Northwest is also very-process oriented, and I understand that the K&L corporate governance model does not sit well with some of the former Preston Gates & Ellis partners, because for the most part the partners no longer have a role in firm decision-making.

The Pacific Northwest palace intrigue sounds juicy. But before you get all excited, take note of this information, from a K&L Gates source:

[I]t causes absolutely no change in the reality of practice here. There are no clients to poach from anyone, because, well, there are only so many clients here. The departing partners are taking their clients with them, and the remaining two partners will keep their own clients….

If it sounds like a somewhat (if not completely) amicable parting, that shouldn’t come as a surprise. A public-finance practice, with some price-sensitive clients and sometimes less-than-astronomical profit margins, probably didn’t mesh well with managing partner Peter Kalis’s vision for the future of K&L Gates.

“One of the alleged chafing points was cost,” a source told ATL. “You can’t charge national rates in a town with very few national firms and even fewer Fortune 500 companies. No one will pay it. So, that’s kind of an interesting thing I’d never considered about what happens when big firms move into small markets.”

Or when Biglaw firms retain practice areas that are less than super-lucrative. As we’ve previously discussed, sometimes it’s best for everyone involved when lawyers in these areas break off from the mother ship. The Biglaw behemoth can continue down the path of world domination, not weighed down by partners who aren’t each generating many millions of dollars in profit per year, while the departing partners can practice law in a more intimate and flexible setting, charge their clients more reasonable rates, and still make more than enough to buy vacation homes and send the kids to private school.

Best of luck to the Pacifica Law Group and its founding partners. We bet you’ll miss Peter Kalis’s awesome emails, but hopefully you’ll create some fun ones of your own.

UPDATE (4/5/11): The official press release about the Pacifica Law Group appears below.

Earlier: A Hot New Trend: Leaving Biglaw to Start Your Own Firm
The Two Faces of K&L Gates

PACIFICA LAW GROUP — PRESS RELEASE

Six Prominent Attorneys Co-found and Launch New Law Firm: Pacifica Law Group

Pacifica Law Group to focus on public and private clients in the Pacific Northwest; partners to continue professional and personal emphasis on civic and community involvement

Seattle, WA — April 5, 2011 — Six prominent attorneys – each a partner in global law firm K & L Gates LLP, and each recognized in their fields of bond and municipal law, sophisticated transactions, constitutional law, appeals, litigation and complex dispute resolution – have resigned their positions to become co-founders and partners in Pacifica Law Group LLP. The law firm will focus on public and private sector clients in the Pacific Northwest. 


“Pacifica Law Group is an extraordinary group of well-established attorneys who deeply understand the dynamics and values that drive northwest companies and public entities; each of us brings valuable, high-level expertise combined with a northwest sensibility and an unwavering commitment to client service of the highest integrity,” said Gerry Johnson, co-founder and partner, Pacifica Law Group. “We recognize clients are searching for lawyers who can be a partner in their projects and litigation, and who can provide sophisticated, creative, flexible legal representation of the highest quality – our specialized group delivers this representation, and includes a commitment to efficiency and cost-effectiveness.”

Pacifica Law Group is located on the 21st floor in the Second & Seneca Building, 1191 Second Avenue, Seattle, Washington, 98101. While the Website is being tooled, all inquiries can be directed to: Inquiry@PacificaLawGroup.com. Media inquiries can be directed to: Media@PacificaLawGroup.com.

The six co-founding partners of Pacifica Law Group are:

Stacey Crawshaw-Lewis

Stacey Crawshaw–Lewis serves as bond counsel to public clients and as ISDA counsel to public and private clients. She serves on the steering committee of the National Association of Bond Lawyers Bond Attorneys Workshop. Stacey is active in the community, from her service as an AmeriCorps VISTA volunteer, as past chair of the Make-a-Wish Foundation of Alaska and
Washington, and coaching youth soccer. | J.D., University of Washington School of Law withhigh honors. B.A., Brown University magna cum laude

Deanna L. S. Gregory

Deanna Gregory practices municipal finance and general municipal law, serving as bond counsel, underwriter’s counsel and disclosure counsel on financing matters, and as general counsel to public entities on general municipal matters. Deanna is the Vice-Chair of the National Association of Bond Lawyers Education Committee, past faculty member of the NABL Fundamentals Conference, and former chair of the NABL Associate Network. Deanna’s extensive community involvement includes serving as the president and treasurer of the board of directors of Solid Ground, and volunteering for the CASA programs for King and Spokane Counties. | J.D., Gonzaga University School of Law summa cum laude. B.A., University of Washington

B. Gerald Johnson

Gerry Johnson’s law practice focuses on major community building projects, including projects that involve both the public and private sectors, such as the Pike Place Market, Pacific Place and Safeco Field. More recent projects have included the expansion of the Seattle Art Museum, the move of the Museum of History and Industry to Lake Union Park, and the transfer of the Washington State Convention Center from the state to a locally-controlled public entity. Gerry is a prominent, active civic leader with board-level service on numerous nonprofits, foundations and civic committees. He is a former managing partner of Preston Gates & Ellis, a predecessor firm to K & L Gates. | J.D., Georgetown University Law Center cum laude. A.B., Dartmouth College summa cum laude

Paul J. Lawrence

Paul Lawrence brings over 27 years of experience to appellate and trial litigation in federal and state courts. He has prevailed in numerous appeals principally in the Ninth Circuit Court of Appeals and the Washington Supreme Court and has been named to Best Lawyers in America for Appeals. His practice focuses on municipal, constitutional, environmental, insurance and commercial law. He is admitted to practice in Washington and Montana. Paul serves on the Board of Trustees of the Intiman Theatre and on the Board of Directors of the ACLU of Washington. | J.D., University of Pennsylvania Law School, cum laude. B.A., University of Chicago

Faith Li Pettis

Faith Pettis serves as bond counsel and outside counsel to state and local governments, with a chief focus on housing, education and nonprofit finance. Faith is on the Board of the National Association of Bond Lawyers and is Chair of the NABL Bond Attorneys’ Workshop. Faith’s community work includes service on the boards of the Seattle Children’s Theater and College Spark. | J.D., Harvard Law School cum laude. B.A., University of Washington magna cum laude

Matthew J. Segal

Matt Segal’s practice focuses on litigation at the trial and appellate level, including complex appellate matters, constitutional law, municipal law, media law, insurance coverage, commercial and corporate disputes, and environmental and land use actions. Matt has presented arguments in state and federal trial and appellate courts, including the United States Court of Appeals for the Ninth Circuit, and the Washington Supreme Court. Matt is a member of the Board of Directors of the ACLU of Washington, and has been repeatedly recognized by the Washington State Bar Association for his pro bono legal work. | J.D., Seattle University School of Law summa cum laude. B.A., University of California, Berkeley

About Pacifica Law Group LLP

Pacifica Law Group LLP is a law firm committed to serving public and private clients in the Pacific Northwest with focused and sophisticated talent, intellect, creativity and unwavering integrity. Pacifica Law Group offers a range of legal counsel and services to help our clients address their most pressing needs from public financing to project counseling to appellate and civil litigation. Washington Law & Politics has recognized partners Paul Lawrence, Gerald Johnson, Faith Pettis and Matthew Segal as “Super Lawyers”, and Stacey Crawshaw-Lewis and Deanna Gregory as “Rising Stars”. The partners of Pacifica Law Group have deeply-held, long term professional and personal commitments to civic responsibility and community volunteerism.

PacificaLawGroup.com

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