ParfumGigi@aol.com

3 janvier, 2007 18:28

Jill Duman
The Recorder
10-12-2005

It's the largest state economy in the country and the fifth-largest economy in the world. It is a state with an international celebrity for a governor and a maze of complex, business-related regulations of interest to a range of firms and industries. By all logic, California -- and Sacramento in particular -- should be a hotbed of lobbyist activity.

And it is, in some ways.

The Center for Public Integrity, a nonprofit based in Washington, D.C., reported that more money was spent on lobbying in California last year than in any state in the union -- $212.6 million. But if the dearth of national and international firms in Sacramento is any indication, the city has yet to prove itself a mother lode.

"The big national firms look at the economy of California, as big as it is -- the sheer number of regulations and laws that we have -- and intuitively see this is an excellent market," said Timothy Flanigan, one of four brothers who make up the Flanigan Law Firm. "They just don't know how to get their arms around it."

One national firm has decided to try. On Monday, Greenberg Traurig -- a 1,400-attorney Miami-based firm ranked as the nation's 15th-largest in terms of gross revenue by Recorder affiliate The American Lawyer -- officially acquired Livingston & Mattesich Law Corp., a 15-lawyer full-service government affairs law firm in Sacramento. The deal, says Greenberg Traurig's chairman of government affairs, Fred Baggett, is central to the firm's strategy of offering services to clients in key locations around the country.

"There are four bellwether states in the country -- New York, Florida, Texas and the biggest of all, California," Baggett explained, adding that establishing "a significant" presence in all four locations is an immediate firm plan.

Greenberg has had a Tallahassee office since 1991 and added an office in Albany, N.Y., two years ago. The Livingston & Mattesich merger is the third stop, and the company plans to move into Austin soon.

As part of the Sacramento deal, L&M partners will become partners at Greenberg Traurig, which agreed to acquire the assets of the Sacramento firm. Both sides refused to disclose the terms of the deal, although L&M reported earnings to the Secretary of State's office of $2.5 million in 2004 and $1.16 million for the first two quarters of 2005. The Miller Brewing Co., the State Farm Insurance Co. and the Personal Insurance Federation of California are among L&M's major clients. It's the clients, Baggett said, that drive Greenberg Traurig's territorial moves.

"We really look at where our clients have the need, and where we found the opportunity," he said. "Obviously, with a firm our size, with as many offices as we have around the country, our clients do business in California -- significant business. You are going to need, at some point, to go to Sacramento, and we want to be there."

Baggett described Livingston & Mattesich and its principals -- including Gene Livingston, California's first director of the Office of Administrative Law and James Mattesich, the former chief counsel and deputy director of the California Employment Development Department -- as perfect local partners for Greenberg Traurig.

But the fact remains that other national lawyer-lobbyists have stopped short of jumping feet first into the Sacramento scene.

Some big chains have tried Sacramento lobbying and have found it less than profitable. The firm now known as Pillsbury Winthrop Shaw Pittman garnered just $420,558 to date from lobbying in 2005 -- down from $1.2 million for the same period in 2003.

"We never really had an active lobbying program here," said Benjamin Webster, managing partner for Pillsbury's Sacramento office. Webster said the 20-lawyer office focuses primarily on civil litigation and that state and federal bid challenges comprise most of Pillsbury's Sacramento government work.

Lobbying per se "hasn't been ruled out of our business plan, but it's not central to the plan either," Webster said.

Kevin Sloat, principal and founder of Sloat Higgins Jensen & Associates, one of the capital's top lobbying firms in terms of receipts this legislative year, said national interest in Sacramento firms tends to be "cyclical" -- driven, at times, by new regulatory activity in the Legislature. Those firms often find it difficult to "parachute in and establish a business," and so they approach local firms that might be interested in a business venture.

Thomas McMorrow, the partner in charge of the Sacramento office of Manatt, Phelps & Phillips is -- along with Livingston & Mattesich and the powerhouse Nielsen, Merksamer, Parrinello, Mueller & Naylor -- one of the only firms in town to offer a full-service governmental affairs practice, offering advocacy, litigation services and legal advice. Other top lobbying shops in the capital offer legislative advocacy -- often by non-lawyers -- public relations consulting and sometimes legal services, but not all three.

Prior to the Greenberg Traurig merger, Manatt was the latest newcomer to add a new name in full-scale governmental affairs lobbying in Sacramento.

"I can tell you, from day one, we were profitable," McMorrow said.

Indeed, Manatt's political juice is exemplified by an L.A.-based attorney, George David Kieffer, who has represented California First Lady Maria Shriver and client BHP Billiton, an Austrian energy giant seeking to build a liquefied natural gas processing terminal off the California coast.

In six years, McMorrow has seen Manatt's Sacramento office grow from two to eight lawyers, but he says educating Manatt's client base about the workings of Sacramento hasn't always been easy.

"Can you come to this town, and, as long as you do good work, be profitable?" asks McMorrow. "Yes you can, but you have to have a plan and provide good work to your clients."

Other top-name firms have found it useful to deploy a few key personnel in California's capital rather than open an entire branch office.

Holland & Knight, a 1,200-lawyer firm based, like Greenberg Traurig, in Florida, counts among its contacts George Dunn, chief of staff to former Gov. Pete Wilson. Dunn is of counsel to Holland & Knight, and "it's very helpful for our national clients to be able to reach out and get his advice and counsel," said Rich Gold, who heads up the firm's public-policy group.

"When we have a full-scale office, we're talking about 50 people," Gold said. "We're definitely not doing that."

DLA Piper Rudnick Gray Cary, with 3,000 lawyers in 54 offices worldwide, has also added a government affairs specialist to its Sacramento office.

Steven Churchwell, a former Livingston & Mattesich partner, chief counsel for the Cal/OSHA appeals board and general counsel to the Fair Political Practices Commission, began this month in his new post as the first member of his firm to take over governmental affairs in Sacramento. "We're going slowly," Churchwell said.

The one-at-a-time approach to establishing a national presence in Sacramento differs sharply from Greenberg Traurig's decision to simply acquire a well-respected Sacramento practice, but the principals involved in the merger insist it makes sense.

"We're a law firm with a very successful government lobbying practice, so there has been a lot of interest in us," explained Carol Livingston, a managing partner at Livingston & Mattesich.

She said other national firms had courted L&M, which boasts 30-year ties to California government and extended experience in environmental issues, particularly with Proposition 65, a 1986 ballot measure that requires the disclosure of exposure to cancer-causing chemicals. But, she said, "nothing rocked for us" until Greenberg Traurig came calling.

Greenberg Traurig's "decentralized management style" will allow for a partnership that "complements them and us in a very real way," she added.

Other Sacramento players still wonder whether the new partnership will work. They point to the fact that Greenberg Traurig lost a third of its lobbying revenue in 2004 after lobbyist Jack Abramoff -- a key figure in the probe against House Majority Leader Tom DeLay -- left the firm.

Then there is the question of whether an outside firm -- even one with local partners -- can ever truly understand and communicate Sacramento politics to clients in other cities.

"I've done work in Tallahassee, I've done work in Albany," said one lawyer who asked not to be named. "Tallahassee and Albany are not Sacramento. Sacramento is a unique animal."