Like this city in which it was born, the law firm built by Charles T. Manatt has grown with the speed of a desert flower after a spring rain.
Once there were six lawyers, and now there are 103, among them as potent a collection of young Democratic Party political operators as this state has ever seen.
They include the California state Democratic chairman, state coordinators for the potential presidential campaigns of former vice president Walter F. Mondale and Sen. Gary Hart (Colo.), and a former U.S. senator.
The firm has prospered while advising California political jurisdictions on how to raise funds after the state's tax-cutting Proposition 13, and its Washington clients include Music Corporation of America, the Northrop Corp. and the Tobacco Institute. All of this is appropriate for a firm founded by Manatt, a self-made millionaire in law and banking who has just completed two years as chairman of the Democratic National Committee. By most accounts, he has been successful in political and business endeavors.
Occupying two floors of a high rise near Beverly Hills, plus offices in downtown Los Angeles, San Francisco and Washington, the firm of Manatt, Phelps, Rothenberg & Tunney has turned itself into a legal phenomenon known for its power in the Democratic Party and its mastery of some of the more arcane, but profitable, laws on banking, municipal bonds and entertainment.
The firm wants to be "successful as a legal practice but still have people involved in every area of the community," partner Mickey Kantor said. "We're building something that's different, almost unique in political involvement."
In Washington, where the firm established a beachhead of three lawyers in 1979, its growth has been somewhat slower but steady and profitable. The office has eight lawyers, led by an old Manatt friend, former congressman James Corman.
"I'm the old man of the firm," Manatt said, reveling in his status as elder statesman at the ripe age of 46. He spends three days a month at the Los Angeles office and stays in touch mostly by phone with the Washington shop. "They call on me for problems they don't teach you about in law school."
When he became DNC chairman, Manatt sought advice from the old-line Washington firm of Hogan & Hartson about the propriety of remaining a partner with his firm during his party tenure. He was advised that he could, as long as he took care not to allow specific conflicts to arise between his party role and the firm's client work.
"I stay away from client work completely," Manatt said.
A deceptively low-key operator who still likes to describe himself as an Iowa farmer, Manatt started the firm in 1965 and has won enough success in law, banking and politics to satisfy three men. The other partners in his firm are just as go-go.
Tom Phelps is a banking and regulatory agency expert, at least as energetic as Manatt. Alan Rothenberg moves in the higher reaches of sports law and supervises litigation. John Tunney is the former senator, whose entry into the firm in 1977 indicates how its business and political branches have entwined.
Manatt was Tunney's friend and managed his successful Senate campaign in 1970. After Tunney lost his seat in 1976, Manatt offered him a senior partnership with no obligations to act as a lobbyist and plenty of free time for private business, television appearances and activities designed to pay campaign debts.
It was the act of a friend, Tunney said, "and I think I assisted in giving the firm a national identification it didn't have at that point."
But Tunney, 48, is not the predominant political figure in the firm after Manatt. That is Kantor, a lean and courtly ex-poverty lawyer from Tennessee whose rivals speak of him with respect and marvel at his ability to draw clients to the firm with one hand and manage political campaigns with the other.
He is the unofficial and untitled state coordinator for Mondale's 1984 presidential campaign. He also ran the 1976 presidential campaign of then-governor Edmund G. (Jerry) Brown Jr., served as state chairman for Jimmy Carter's 1980 campaign and chaired Brown's unsuccessful 1982 U.S. Senate campaign.
At the same time, Kantor, 43, represents such corporate giants as Eli Lilly, Northrop, Penn Corp. Financial and Allied Tube.
Also rising in importance is Peter D. Kelly, 34, recently elected state chairman of the California Democratic Party. Then comes John B. Emerson, 29, who serves as informal state coordinator for the Hart campaign, and Ronald J. Silverman, 36, a partner increasingly active in Hart's campaign. In Washington, the key political operators are Corman, who has built a booming tax lobbying practice in less than two years, and Timothy Furlong, a Democratic Party fund-raiser and former aide to Sen. Lloyd Bentsen (D-Tex.).
Despite its activity, the Washington office is not as large as the office of two other established Los Angeles firms, and does not come close in size to the Washington office of a former DNC chairman, Robert S. Strauss, whose firm there has about 100 lawyers in Washington.
In the post-Watergate era, Manatt is sensitive about the commingling of his party position and private business. He says he is scrupulous about not steering clients to his firm and not lobbying. Still, he has been nicked at least twice, both times wrongfully, he says.
One occasion involved a letter sent over his signature last spring by the Democratic Business Council to members of Congress asking them to give "consideration" to arguments for preserving tax-leasing provisions of the 1981 tax act. Manatt said the letter went out without his knowledge, and he later apologized to labor groups for his association with it.
At the time, however, his firm was representing Manufacturers Hanover Leasing Corp., which paid fees of $12,075 in 1982 to get the leasing provisions killed.
The other involved publicity about his alleged lobbying on behalf of John McMillian, chairman of the Northwest Alaskan Pipeline Co. and a key Democratic fund-raiser, who was pressing for congressional waivers to ease financing of the pipeline.
Consumer groups considered the waivers a rip-off and fingered Manatt as part of a group of heavyweight lobbyists pushing them. Manatt said neither he nor his firm lobbied the bill. It did represent the company in 1982, for $56,768 in fees, on a unrelated tax matter, however.
The Washington office's other clients include Music Corporation of America, which retained it for $21,250 last year and is pushing for copyright fees to be paid to the entertainment industry by users and makers of home video equipment; Northrop ($65,620 in 1982), which wanted to facilitate overseas military sales; the Pharmaceutical Manufacturers Association ($33,275), pushing for legislation to lengthen patent terms on drugs, and the Tobacco Institute ($5,566), which fought the increase in tobacco taxes last year.
While legislative lobbying is the most visible part of the firm's work in Washington, its most lucrative business is representing banking clients before federal regulators. Manatt gave the firm its economic base through his grasp of changing law and procedure in California banking in the 1970s.
When California voters passed Proposition 13, the tax-cutting referendum, in 1978, the lawyers at Manatt did not despair at the loss of state revenues as did their Democratic friends in the state Assembly. Instead, they jumped at the chance to advise local governments on other ways to finance sewers and roads.
"That broke the hammerlock that two law firms had had on most of the municipal bond business in the state," said Kelly, who lists among the firm's clients the cities of San Jose, San Francisco, Azusa, Burbank, Hemet and Pittsburg, plus Placer County and the Los Angeles County Redevelopment Agency.
Growth and interest surrounding the firm has given it such a boost that it has joined another firm in building a $55 million, twin 10-story tower on Olympic Boulevard for a new headquarters.
Many of the Manatt partners are sensitive about their reputation as a political firm, despite their obvious involvement in politics.
When new clients seem to assume they have bought political influence by retaining the firm, Kantor gives them a little speech:
"Regardless of what you think, here's the reality. Some of the attorneys in this firm happen to be privately involved in politics. But if you think there's some magic here, forget it, because that's not the way it works . . . .
"In our private lives we make some friends and hopefully gain a reputation for competence and integrity. But you don't pick up the phone and ask them for a favor . . . . Life is too long and our reputations too delicate."
Special correspondent Katharine Macdonald contributed to this report.