Despite phenomenal growth in the last decade, it seems Washington law firms still haven't broken into the big time when it comes to corporate lawyering. Or at least when it comes to corporate lawyering with "inside partners." Those are law firm partners who sit on the boards or serve as officers of corporate clients.
Only one Washington firm ranked in the "million-dollar" list of 52 law firms that received that much in fees from companies in which the firms had an inside partner.
According to a recent study published by the Law Journal Seminars-Press Inc., a company affiliated with the National Law Journal, more than 750 law firms with partners as company officers or sitting on boards of directors got more that $230 million in fees during 1980. They collected the fees from nearly 1,000 corporations to which they were connected.
The study is a compilation of reports filed with the Securities and Exchange Commission by corporations with inside partners. SEC regulations, designed to reveal possible conflicts of interest, require publicly listed corporations to disclose legal fees paid to firms whose members are part of the company's management.
Only Martin, Whitfield, Smith and Bebchick, a six-lawyer firm, made the list, barely squeezing into 46th place. The firm represents the International Bank of Washington and, according to the study, collected $1.1 million in fees from the bank.
As could be expected, five of the top 10 firms on the list are based in New York City. The top two firms with partners as clients' officers or directors, Simpson, Thacher & Bartlett and Reavis & McGrath, both of New York, each collected more than $5 million in fees. Simpson Thacher, which represents 10 companies reporting to the SEC, made more than $2 million each from Gulf & Western Industries and American Electric Power Co. Reavis & McGrath pulled in more than $5 million from just one company, Data General Corp., a computer manufacturer.
According to the study, Martin Whitfield had two partners, Guy Martin and Allen Whitfield, on International's board of directors.
But partner Leonard Bebchick said in an interview that, although their names are on the letterhead, neither one is now, or has been in more than a year, a partner in the firm. "They are not partners, not members, not active in the firm, and do not draw partnership shares," Bebchick said.
Washington firms are not high on the list because Washington is not a corporate headquarters center.
More often than not, inside counsels to corporations come from firms with long-time affilations involving business decisions, Bebchick said. "Washington problems," handled by Washington firms, are not "central to the commercial concerns of the business," Bebchick said. The legal involvement of Washington lawyers is not with major corporate decision-making--such as where and how to expand. Washington lawyering is focused on handling any regulatory or legislative problems once the key corporate decision has been made.
Only a handful of D.C. firms or D.C. branches of out-of-town firms collected more than $250,000 from companies that filed with the SEC: The D.C. branch of Los Angeles' Latham, Watkins & Hills collected $703,000 in 1980 from The Signal Companies Inc., a California-based equipment manufacturing firm; Zuckert, Scoutt & Rasenberger got $531,000 from World Airways; Shaw, Pitman, Potts & Trowbridge got $449,000 from B. F. Saul Real Estate Investment Trust; Arent, Fox, Kintner, Plotkin & Kahn collected $399,000 from The Macke Co.; Morrison, Murphy, Abram & Huddock got $380,000 from Frontier Airlines; and Smathers & Thompson, based in Florida and D.C., was paid $358,000 from Pan American Bancshares, Inc.
Washington's largest firm, Covington & Burling, just missed the $250,000 figure, collecting $243,000 from American Security Bank