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California partners are switching from BIG LAW to small law

Partners have long left large law firms to branch out on their own. But in a legal market increasingly under pressure from a variety of sources, including higher associate salaries, it seems that more and more California-based partners have recently left behind their practices at Am Law 200 firms to start their own shops.

Those that have picked up stakes for new endeavours include Michael Hassen, a former chair of the appellate practice at Jeffer Mangels Butler & Mitchell, who in May formed Reallaw in Walnut Creek, California. John Cermak Jr., a former managing partner of the Los Angeles office at Baker & Hostetler, has launched local firm Cermak & Inglin with former Baker & Hostetler environmental partner Sonja Inglin. And Armen Zenjiryan, a former Jackson Lewis partner in Los Angeles, in June became the co-founder of Burbank, California-based Remedy Law Group. (Zenjiryan declined to comment about his new firm, while Hassen was unavailable by the time of this story to discuss his next enterprise.)

These break-off boutiques from Big Law are often specialized and frequently located in areas where a certain amount of flexibility, whether it be in real estate or hourly rates, is desirable.

“From a business perspective, I felt like it was a good time to start an environmental boutique,” said Cermak, when asked about his decision to leave Baker & Hostetler after more than a decade at the Am Law 100 firm.

Cermak joined Baker & Hostetler in 2007 as part of a mass lateral move from Jenkens & Gilchrist, where he was a member of the now-defunct firm’s board. Cermak cited rate pressure and conflicts with Baker & Hostetler’s other practices as the primary driver for his decision to start his own firm to cater to the needs of his various clients.

“My clients realized that they can get great quality lawyers at smaller firms, there is a lot of rate pressure for in-house counsels,” Cermak said. “We have a long-time relationship with these clients. We have been with them for almost 30 years.”

As clients become more careful about spending, Cermak said setting up his own shop allows him to offer more flexible rates. As associates at large firms are under increased pressure to keep up their billable hours, in part due to salary raises, Cermak noted that a boutique is better suited to training young lawyers interested in a specific practice, such as environmental law.

At the moment, Cermak’s two-partner firm has only one associate. The former Baker & Hostetler partner said he does plan to hire a few more contract lawyers or associates.

While flying solo might appeal to some large firm lawyers, there are also others that seek out a smaller firm atmosphere for the same benefits of flexibility and hands-on experience, but still want less risk.

George Borkowski, a former chair of intellectual property litigation at Venable, last month left his role as senior vice president of litigation and legal affairs at the Recording Industry Association of America to join Coblentz Patch Duffy & Bass as a partner in San Francisco.

“I think that a firm such as 84-lawyer Coblentz Patch is perfectly situated—it can be very flexible, it doesn’t have too much bureaucracy, it doesn’t charge ridiculously high hourly rates,” Borkowski said. “You get a lot more bang for your buck, you pay fees that are somewhat less, but you get representation that I think is even better than most of the big firms because you get individualized attention, you get partners paying attention to your cases.”

Prior to returning to California, Borkowski has spent the past four years at the RIAA, which paid him $380,097 in 2016-17, according to the most recent federal tax filing by the Washington, D.C.-based nonprofit. Before that, Borkowski spent nearly three years as a partner at Los Angeles-based Freeman, Freeman & Smiley.

He began his legal career in 1988 at Mitchell Silberberg & Knupp, where Borkowski was a founder and chair of the IP and technology group during his two decades at that Los Angeles-based firm. Borkowski said he missed being a litigator and that he is excited to help the midsized Coblentz Patch expand its IP litigation practice on the West Coast.

“We do get the job done successfully for clients and we do it in a way that doesn’t break the bank,” Borkowski added.

Bruce Isaacs, a former founding partner of Beverly Hills-based entertainment boutique Wyman & Isaacs who joined Davis Wright Tremaine in early 2015, has also recently left Big Law.

“The clients always want their bill to be smaller,” said Isaacs, now a mediator at Benchmark Resolution Group, which he joined in May after leaving Davis Wright.

For Isaacs, it was a desire to pursue a long-time career interest that spurred his decision to leave the firm for BRG.

“I am 61 years old, and it was time to do something I really felt like doing,” said the veteran litigator about his move to BRG, which was formed last year. Isaacs noted that the new outfit is focused on “figuring out how to solve problems and end litigation.”

BRG’s founding partners included a number of prominent former judges in the Los Angeles area. Isaacs said he felt honoured to become one of the 13 members of that group, which includes nine ex-judges and other experienced litigators.

“I think this company will grow, because I think a lot of the judges that retired are going to want to work here,” Isaacs said. “The retired judges and lawyers are extremely dedicated, they work very hard, and they read every word of every brief and exhibit.“

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