This week’s announcement that Thomas O’Brien, the sitting U.S. attorney for the Central District of California, would join Paul, Hastings, Janofsky & Walker in the fall marked the latest in a string of significant hires designed to build white-collar defense practice groups in Los Angeles.
While a number major firms have had prominent white-collar practices in Los Angeles for decades, others have been trying to catch up. In addition to Paul Hastings, firms including Bingham McCutchen, Reed Smith, Crowell & Moring and Sheppard, Mullin, Richter & Hampton have brought in white-collar specialists to build practice groups in Los Angeles.
Rick Kolodny, president of The Portfolio Group Inc., a legal recruiting firm in Los Angeles, represented O’Brien and the recent hires at Bingham and Reed Smith. He said that the interest in white-collar groups in Los Angeles reflects broader national trends, including government investigations arising from the recession and policy shifts in the White House.
“It’s a function of both what’s happened in the past 12 to 18 months in terms of the litigation that has been part of the fallout from the subprime mortgage meltdown and the failure of major financial institutions,” he said. “And looking forward, it’s reflective of the heightened awareness among national firms that changing enforcement priorities in the Obama administration are going to be driving a resurgence of regulatory activity on a wide number of fronts.”
As for Los Angeles, he said, “There were a lot of prominent companies in Southern California that got caught up in litigation or investigations.”
O’Brien will join Paul Hastings as a partner in the firm’s litigation department and will specialize in white-collar criminal defense. He will leave his post as U.S. attorney on Sept. 1 and join Paul Hastings on Oct. 5.
Greg Nitzkowski, managing partner of Paul Hastings, said that the firm has a substantial white-collar practice group that includes lawyers in New York and Washington. On the West Coast, which he referred to as “one of our holes in our practice,” Paul Hastings has about 20 lawyers practicing in securities litigation and none handling white-collar criminal defense. The firm had been looking for someone to handle those chores for the past four or five years, he said.
“Sometimes it takes a long time,” Nitzkowski said. “We were competing for other groups along the way, but we’re patient and we found the right person who we think will be terrific.”
O’Brien said that he wanted to join a firm that did not already have an established white-collar group.
“I thought, based on my background and experience as a litigator and a trial lawyer and a leader of this [U.S. attorney's] office, I would be best positioned to work at an area to build and grow a practice rather than moving where one is already well established,” O’Brien said.
FILLING HOLES
Other firms have pinpointed similar holes in their white-collar groups in Los Angeles. Kurt Peterson, a partner and executive committee member in the Los Angeles office of Reed Smith, said that his firm recognized a need for lawyers specializing in Securities and Exchange Commission enforcement and white-collar crime since its 2002 acquisition of Crosby Heafey Roach & May, a litigation shop that was based in Oakland, Calif. The firm has a strong white-collar practice on the East Coast, particularly in Philadelphia, New York, Washington and Chicago, he said.
Last month, Reed Smith brought in its first white-collar specialist in Los Angeles: James L. Sanders, former head of the Los Angeles trial department of McDermott Will & Emery, who now is a Los Angeles partner in the global regulatory and enforcement group of Reed Smith’s litigation department.
“And it really took us this long to find the person we thought was the right first person, which is different from filling out an existing team,” Peterson said.
On April 29, Bingham McCutchen hired Nathan Hochman, former assistant attorney general in charge of the U.S. Department of Justice’s tax division, as a partner in the firm’s litigation department. Rick Welch, managing partner of Bingham’s Southern California offices, said that Hochman will build the firm’s white-collar group in the region, although the specifics are still being worked out in light of Bingham’s merger with McKee Nelson earlier this month.
With the merger, he said, “we’re in the process of evaluating where we can take this practice area and how Nathan will interface with tax partners in McKee Nelson.”
In January, three partners from Mayer Brown’s Los Angeles office — Bryan Daly, Charles Kreindler and Peter Morris — joined Los Angeles-based Sheppard Mullin to build its white-collar practice. And last fall, Washington’s Crowell & Moring opened a Los Angeles office by acquiring the white-collar boutique Lightfoot Vandevelde Sadowsky Crouchley Rutherford & Levine.
Janet Levine, partner in Crowell & Moring’s Los Angeles office, said that white-collar practices have grown steadily in Los Angeles in recent years, particularly as prosecutions under the Foreign Corrupt Practices Act (FCPA) — mostly involving the Asia-Pacific region — have ramped up.
“But also it’s one of the biggest U.S. attorney’s offices in the country, so one would expect an increasing amount of prosecutions and investigations out of this area,” she said.
O’Brien agreed, noting that FCPA prosecutions, along with cases involving securities manipulation, stock swindling and fraud, have been major focuses in his office.
“The need for white-collar practitioners is particularly severe here in the West Coast, in my district,” he said. “In the sheer number of cases we’ve done and the depth of the cases that the office has indicted over the last several years, it’s eye-watering.”
Amanda Bronstad can be reached at [email protected].
