By Carlyn Kolker Will Out-Of-Town Firms Hit the Jackpot?

www.americanlawyer.com AUGUST 2005 BettingBetting OnOn VegasVegas Will out-of-town firms hit the jackpot? By Carlyn Kolker Snell & Wilmer’s Patrick Byrne B E T T I N G O N Vegas A booming market has become an irresistible lure for some out-of-state firms. Can a high-stakes wager in once-forbidden turf pay off? By Carlyn Kolker TALL, HANDSOME, AND is one of the country’s fastest-growing metropolitan corporate, Patrick Byrne is areas (its population grew by 70 percent between not the Las Vegas lawyer 1990 and 2000 alone), but as a legal market, it is just of lore. He’s not famous starting to awaken. Ten years ago Nevada did not have like Oscar Goodman, who, a law school. Five years ago it had the most restrictive according to his official rules on multijurisdictional practice in the country. biography, showed up in And for decades Las Vegas’s legal community was a the mid-sixties with $87 and a University of tiny pool of lawyers at insular firms, handling local Pennsylvania law degree, and proceeded, according matters for hotels, casinos, and mining companies. to his unofficial biography, to become counsel to Today, all that is changing, driven by a housing Meyer Lansky and Tony the Ant Spilotro, before boom, a hotel boom, an office boom, and, most getting elected mayor. Nor is he infamous like the important, a fundamental shift in Las Vegas’s biggest fictional Tom Hagen, who moved to Vegas on behalf business, gaming. (That’s the politically correct local of his one and only client who wanted to diversify term for the business previously known as gambling.) out of his olive oil business. Instead, Byrne is the Local firms are slowly being forced to make way head of the largest branch office in Las Vegas of for outsiders—regional players like San Francisco’s any Am Law 200 firm, the 27-lawyer outpost of Gordon & Rees, Los Angeles’s Lewis Brisbois Phoenix’s Snell & Wilmer. When it comes to Bisgaard & Smith, and Phoenix’s Lewis and Roca and dramatic offers, he’s just hoping to find a local IP or Snell & Wilmer. And in May, Greenberg Traurig, regulatory lawyer who might be susceptible to the a national firm with big ambitions for the market, temptations of a lateral move. arrived. These firms are beginning the long march to If legal markets went through life stages, Las a war over billing rates, salaries, and clients. Vegas would be an adolescent. At roughly 1.5 Are these arrivistes late to the party? Over the last million people, the city is in the awkward years: It decade casinos have morphed from a local attraction P HOTOGRAPHS BY M ICHAEL L LEWELLYN Phoenix transplant Patrick Byrne runs and Roca’s Las Vegas office. A wave of counsel—lawyers who know the unspoken Snell & Wilmer’s 27-lawyer outpost, consolidation has already swept the industry: rules of the local game. Even in Vegas, or Las Vegas’s biggest out-of-state office. Today, five publicly held corporations especially in Vegas, practicing law is a rela- dominate the Las Vegas Strip, and two— tionship business. For out-of-state firms, getting into a multistate, multinational empire. Gross Harrah’s Entertainment, Inc., and MGM a piece of that action is as good as—and nearly revenue from gaming in the United States Mirage—own 16 of the 22 largest hotels. as difficult as—drawing a royal flush. more than doubled in the ten years from Las Vegas’s law firms don’t reside in the 1993 to 2003, according to the American glitz of the Strip—they are in office parks or BEING THE NEW KID ON Gaming Association. Las Vegas’s companies the city’s shabby downtown. But the Strip is the block is never now operate on riverboats in Louisiana, to Las Vegas what Wall Street is to New York: easy, but nothing quite reservations in Arizona, and casinos in The Las Vegas firms depend on the casinos compares to the frosty Macau. “The whole industry went from being for real estate, intellectual property, and welcome that Lewis and a unique, localized practice to something that regulatory work. For years, that work has Roca got when it came was national, and now international,” says been awarded on the basis of established to Las Vegas in 1999. Anthony Cabot, a gaming lawyer in Lewis bonds between casinos and their longtime The firm, today Phoenix’s third-largest, wanted to become a regional player and When Snell registered with the state bar, & Rees sent two lawyers to town to service decided that Las Vegas was central to that it met the same fate as Lewis and Roca. In nursing home, health care, and hospitality strategy. It found two experienced local Las Vegas, Snell & Wilmer would be known clients. That same year Lewis Brisbois came attorneys, Martha Ashcraft and Von Heinz, as Curtis and Associates. “It was really to Las Vegas, mostly to handle insurance partners from Las Vegas’s Jones Vargas, to difficult,” says Byrne. “It was confusing for defense work. Lewis Brisbois now has 23 form the core of its outpost. It seemed like a clients.” Receptionists answered the phone lawyers in Las Vegas and recently leased perfect opportunity: “They had a book of “Curtis and Associates, affiliated with a floor of office space to make way for business, Las Vegas was on the cusp of Snell & Wilmer,” and the firm produced more. Some firms have come and gone: exploding, and there was a low cost of entry,” two different sets of marketing material, Los Angeles’s Jeffer, Mangels, Butler & says current Lewis and Roca managing stationery, and business cards. Like Lewis Marmaro partnered with a local firm in partner Kenneth Van Winkle, Jr. and Roca, Snell & Wilmer filed a complaint 2000, but left less than two years later. But there was a hitch: Lewis and Roca against the state bar. The state bar, in Jeffer partner Jeffrey Reuben chalks the couldn’t use its name in Las Vegas. Under turn, announced it would file disciplinary departure up to “a difference in philosophy long-standing Nevada State Bar rules mandated proceedings against Curtis. with the local firm.” by the state supreme court, firms could set up A federal district court granted Lewis and Snell & Wilmer, meanwhile, has steadily offices in the state only if their name partners Roca an injunction against Rule 199 in April increased its presence. At 27 lawyers, Snell were members of the Nevada State Bar. 2000. The state bar appealed to the U.S. has the largest out-of-state office. It has Lewis and Roca were both dead, and they Court of Appeals for the Ninth Circuit, which steadily added partners and associates in were never members of the Nevada bar. upheld the injunction. The following year, real estate, corporate work, and litigation. “We felt that one of the things we had to the Nevada Supreme Court ordered the state In April 2004 Snell hired five lawyers sell was our franchise, so we made a decision bar to look into repealing the restrictions on from Las Vegas’s Gordon & Silver to handle as a partnership to challenge the name multijurisdictional practice. In 2002 the rules real estate and construction law matters, rule,” says Van Winkle. The firm filed for a were changed to allow out-of-state firms to a booming practice in a city where preliminary injunction in federal court, practice under their own names, although construction cranes dot the open landscape. arguing that the restriction, known as Rule they must complete an annual registration The firm has “a pretty good market share” 199, violated the Constitution’s commerce process with the state bar, and there in representing developers in mixed-use clause, as well as the First Amendment. As are limits on the number of pro hac vice and high-rise condominium developments, the matter wound its way through the federal appearances that out-of-state firms can make. says partner James Mace. Clients include courts, Lewis and Roca would practice locally (Snell & Wilmer’s litigation with the bar was Turnberry Associates, The Related Group under the name Ashcraft & Heinz. settled when the state bar was on the brink of of Florida, and Ruffin Trump LLC. Still, That was just the de jure roadblock. There drafting the new regulations.) Snell has not snagged anyone in the critical was a de facto one, too—the clubbiness of With the Rule 199 dispute resolved, the IP and gaming regulatory areas. Byrne the local legal community. “The bar is so way was finally clear for out-of-town firms. says he is aggressively looking to hire much smaller [than in other cities], and the Lewis and Roca grabbed its first high- lawyers in those practices. judiciary is so much smaller, and the judiciary profile group of laterals, hiring five lawyers Byrne’s plight isn’t unusual. Finding knows the bar, and vice versa,” says Paul from Quirk & Tratos, a local IP boutique, in qualified talent has become the trickiest Hejmanowski, managing partner of Las 2003. It now has 15 lawyers in its Las Vegas part of any managing partner’s job in Las Vegas’s 80-lawyer Lionel Sawyer & Collins. office, and scored its biggest coup in March, Vegas. “Part of the challenge is that Las Of course, Lionel Sawyer, founded in 1967, is when it hired Cabot from Lionel Sawyer, Vegas is still in many respects an overgrown a key beneficiary of that sort of familiarity. It where he headed that firm’s gaming small town,” says Ashcraft.

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