Business of Law
How Latham’s Opening of a Chicago Office in 1982 Launched a Megafirm
Posted Mar 26, 2012 4:21 PM CDT
By Martha Neil
At the beginning of 1982, what is now one of the world's biggest and best-known law firms effectively didn't exist on the roster of the nation's BigLaw firms.
Latham & Watkins had 126 attorneys, all but 12 of them in California. Its only outpost outside the state was in Washington, D.C., recounts the Am Law Daily in a lengthy article.
Then, with the opening of the firm's Chicago office later that year, a behemoth-to-be was born. Having learned some lessons from its earlier experience of hanging its shingle in Orange County, Calif., and Washington, D.C., Latham avoided making the same mistakes again.
One crucial concept was to integrate local lawyers into the new office from the outset. So Latham assiduously courted its first-choice merger partner, Hedlund Hunter & Lynch. Established in 1976 by three former partners of Kirkland & Ellis, the then 21-attorney Chicago litigation boutique wasn't eager to give up its independence by getting hitched to Latham. However, believing that the office could retain an independent culture in Chicago even as it became part of the bigger firm, Hedlund partners agreed to do so, the article recounts.
One of the major reasons for the focus on Chicago was that local retailer Sears Roebuck and Co. was already a client of the firm, which gave Latham immediate credibility. The firm also got lucky, notes legal consultant Peter Zeughauser, with one of the young attorneys it unknowingly hired. Bob Dell, managing partner of Latham since 1994, was a Hedlund associate in 1982.
"It's not easy to go into Chicago like they did, make an acquisition, integrate the firm so well and wind up having Bob Dell," says Zeughauser.
Even as it went into Chicago, those in charge of the Latham firm knew they were practicing for an even bigger move into the New York market down the road. Once that successfully occurred, the stage was set for further expansion internationally. Today the 31-office megafirm has almost 2,000 attorneys worldwide and brought in $2.15 billion in gross revenue last year. More than half of its offices are outside the U.S.
Faced with a rapidly changing legal market, the firm has shown the flexibility to change with it, again and again.
A key local client in New York at the time Latham opened its office there, Drexel Burnham Lambert, later imploded in an insider trading scandal, for instance, but Latham chugged on not only despite but because of what some characterize as the Drexel diaspora.
"The bankers went elsewhere," says Richard Levy, who now serves as managing partner of the Chicago office. "And they like Latham, and they stayed with us."