Orrick, Herrington and Sutcliffe LLP - Company Profile, Information, Business Description, History, Background Information on Orrick, Herrington and Sutcliffe LLP

405 Howard Street
San Francisco, California 94105-2625

Company Perspectives:

The firm exists to help our clients achieve their goals and solve the ir problems by performing effective, challenging and innovative legal work on their behalf, with financial results that will permit the fi rm to advance and flourish.

History of Orrick, Herrington and Sutcliffe LLP

A long-time San Francisco law firm known for its work in municipal bo nds, Orrick, Herrington and Sutcliffe LLP has grown aggressively sinc e the early 1990s, adding a variety of practices and opening offices around the world. The firm employs some 750 lawyers in 13 practice ar eas. Transactional practices include Bankruptcy and Debt Restructurin g, Compensation and Benefits, Corporate Global Finance, Mergers and A cquisitions, Public Finance, Structured Finance, Real Estate, and Tax . Litigation practices include Litigation, Intellectual Property, Emp loyment Law, and Securities Litigation. Clients include the likes of Salomon Smith Barney, Charles Schwab, and IBM. In addition to its San Francisco headquarters, Orrick maintains domestic offices in New Yor k (largest in size), Los Angeles, Orange County, Sacramento, Silicon Valley, the Pacific Northwest, and Washington, D.C. International off ices are located in London, Paris, Milan, Rome, Moscow Hong Kong, Tai pei, and Tokyo. The driving force behind the firm's expansion is chie f executive officer Ralph H. Baxter, Jr., who took the helm in 1990.

Firm Origins Date to 1860s

Orrick traces its lineage to attorney John R. Jarboe, Jr. He was born in 1836 in Maryland of French descent (his family had accompanied Lo rd Baltimore when he founded the city that bore his name) and spoke F rench as his native tongue. Injured as a child, he was confined to be d for three years and became quite studious. Although the youngest me mber of his class at Yale University, he graduated near the top in 18 55. A year later he moved to California and taught briefly before dec iding to study law in the San Francisco office of Jesse B. Hart, at a time when there were no law schools and attorneys "read" with those already established in the profession. In 1858 he became a clerk at S hattuck, Spencer & Reichert and in that same year was admitted to the bar and soon became a practicing attorney. According to company lore his examiners were so impressed by his knowledge of the law they dropped the subject and asked if the young man knew how to make a br andy punch. He replied that he did not, but confided that he had disc overed an excellent one was served at a saloon across the street, add ing, "And I would be pleased if the learned committee would join me i n testing one." The attorneys quickly agreed upon a change of venue.

Upon Reichert's death, the firm became Spencer & Jarboe, and foll owing Spencer's death Jarboe practiced on his own for about eight mon ths, his specialty real estate, before taking on partners. He became partners with Ralph C. Harrison in 1867, and they worked together unt il Harrison was elected to the Supreme Bench of the State. W.S. Goodf ellow would join them, and in 1885 they founded Jarboe, Harrison &amp ; Goodfellow, the firm that Orrick considered its forefather. In 1891 Harrison was elected a justice to the California Supreme Court, and the partnership was dissolved. Two years later, Jarboe, always of poo r health, died at the age of 57.

William Orrick Joins Firm in Early 1900s

Goodfellow carried on the firm's tradition, and in 1901 formed a new partnership with Charles Eells, who would play an important role foll owing the 1906 earthquake that leveled San Francisco. Eells helped to save Fireman's Fund Insurance Company by implementing a reorganizati on plan that allowed the insurer to pay off some of its claims with c ompany stock. The behind the Orrick name, William H. Orrick, joined t he firm in 1910, the beginning of a 50-year tenure that would last un til he was well into his 80s. Another attorney, Stanley Moore, joined the firm in 1914, and in that year the partnership changed its name to Goodfellow, Eells, Moore & Orrick.

The Herrington in Orrick, Herrington and Sutcliffe LLP was George Her rington who became a partner in 1927 and joined the firm under unusua l circumstance. Orrick was well known for his insistence on thoroughl y researching his subjects, notorious for the prodigious assignments he gave to associates, but he also demanded as much effort from himse lf. While Herrington studied law at the University of California, Ber keley's School of Law--Boalt Hall, he worked part-time at the library , charged with opening it on Sunday mornings. One more than one occas ion he found Orrick sitting on the steps waiting to get in. Years lat er Orrick would quip that he only hired Herrington to make sure he sh owed up to work on time.

Five years after Herrington, Eric Sutcliffe joined the firm in 1932. During this period the firm became involved in one of the most high p rofile bond issues in its history: the building of the Golden Gate Br idge. While Sutcliffe contributed to the effort by providing research , Herrington played a key part in making sure the bridge was built. T he Golden Gate Ferry Company, backed by the deep pockets of its corpo rate parent, the Southern Pacific Railroad, fought against the bridge project which threatened to undercut its business and challenged the bond issue. When it ultimately passed, Herrington's reputation was e stablished and the firm became a major West Coast law firm.

Sutcliffe would play a more prominent role in the future, however. In 1947 he became the firm's managing partner, the start of a 30-year t enure at the top. The modern era of the firm, which after a regular s huffle of partners settled on its present name in 1980, began after S utcliffe's retirement. At the time, Orrick was a quiet, conservative law firm, content to stick to its knitting in San Francisco.

Orrick did not open its second office until 1983 when it set up shop in Sacramento. A new chairman, William McKee, appointed a year later had more ambitious goals. He had been with the firm since 1950 and wa s responsible for launching Orrick's tax practice. During his term as chairman from 1984 to 1986, McKee oversaw the upgrading of the firm' s time-keeping methods and merit-based compensation, and modernized t he business practices. He also opened the firm's first non-California office, establishing an important beachhead in New York City. Taking advantage of its reputation in California municipal bonds, Orrick wa s able to recruit half-a-dozen lawyers from a major New York law firm , Brown & Wood. While Orrick looked to make inroads with New York financial companies, other major San Francisco law firms were buildi ng up their Silicon Valley offices to attract more business from the high-technology sector. Orrick opted to stay out of Silicon Valley, a questionable move at the time, and instead opened an office in Los A ngeles in 1985.

Orrick's prospects in the New York market appeared dim after the pass age of the 1986 Tax Reform Act, which curtailed the number of tax-exe mpt bonds and set limits on legal fees on bonds issued for private de velopment projects. Business in this area was also adversely impacted by uncertain interest rates that scared off many insurance companies . Small firms exited the bond business, larger firms cut back, and Or rick was close to shuttering its New York office. Instead, it decided to expand, diversify the practice and also beef up its public financ e practice. A key move came in July 1987 when Orrick lured away nine bond specialists from Hawkins Delafield, bringing with them some majo r clients, including New York City's Municipal Assistance Corp. and t he Port Authority of New York and New Jersey. As a result, business s urged and in 1988 Orrick was involved in more bond business than any law firm in the country, according to trade newspaper The Bond Buy er, after ranking fourth the year before. The momentum stalled fo r the New York office by the end of the decade, and the firm was at a crossroads. It experienced some lackluster years, the average per pa rtner profits dropped well below other leading San Francisco law firm s, and some key lawyers defected.

New Chairman Leads Firm Into the 1990s

In 1990 the Orrick partners elected Ralph H. Baxter, Jr., a labor lit igator, as their new chairman. He quickly took steps to improve the f irm's balance sheet and grow partner profits to a much high level. He cut staff and eased out partners who were not producing enough work, and he also embraced a strategy of geographic expansion and placed l ess emphasis on the San Francisco market. At the time Los Angeles had 30 lawyers, New York 50, and San Francisco 175. Baxter's goal was to build the Los Angeles and New York offices to the same size as San F rancisco. Because the California economy soon slowed, Baxter had to a djust his plans, cutting back on his Los Angeles aspiration. In 1983 Orrick opened a Washington, D.C., office, but New York remained the k ey to the firm's future. According to Krysten Crawford, wiring for The American Lawyer in a 1998 profile on Baxter, "As the financi al center of the world, New York is where the deals get done--the mer gers, the project financings, the securitizations. New York is also t he link to other markets such as London, Hong Kong, and Latin America n. In Baxter's mind, a firm that seeks to be a global player--a truly exceptional law firm--must first make a stand in New York."

Orrick used its ties to investment banks to build up existing practic es and add others in New York. The first target was securitization (t urning loans, mortgages, and the like into tradable securities), foll owed by project finance. The firm's success in New York in these area s then served to reinforce Orrick's position on the West Coast in sec uritization work. The size of the New York office grew steadily in th e 1990s, reaching 165 lawyers by 1998 to become larger than the San F rancisco office, which now employed 155 lawyers.

The 1990s also saw Orrick make a belated entry into the Silicon Valle y. By this point its rivals had long since carved up the best corpora te work, so in 1995 Orrick's new Palo Alto office focused on intellec tual property litigation. To jumpstart the practice, the firm lured a high-profile litigation lawyer, Terrence McMahon, from a chief rival . McMahon, nicknamed "Mad Dog," was an impressive calling card for th e office. "We don't intend to be a quiet, insignificant member of Sil icon Valley," Baxter told San Francisco Business Times. "And T erry is far from quiet and insignificant."

One area sorely lacking in the late 1990s was Orrick's litigation cap ability. To address that need, Orrick entered into talks in 1987 to m erge with an old-line New York law firm Donovan, Leisure, Newton &amp ; Irvine, which had been struggling since a decline in antitrust work in the 1980s and was now considered too small by many potential clie nts. It appeared to be a good fit for both firms, and Donovan, Leisur e's partner voted to approve the merger, but talks faltered in early 1998, due in large part, according to press accounts, to a legal conf lict: Donovan, Leisure was being sued by a mutual client. In the end, about 40 of Donovan, Leisure's 60 lawyers were hired by Orrick, whic h essentially took the ones it wanted, and Donovan, Leisure was disso lved. As a result, Baxter told the press, "We will now have one of th e most complete law practices in New York City." While Orrick was acq uiring a litigation practice, it was also taking steps to become an i nternational law firm. A Tokyo office was opened in 1997, followed by a London office in 1998.

Orrick continued its aggressive expansion with the start of the 2000s , looking to grow both domestically and overseas. The firm opened an office in Seattle in 2000 to mainly seek work from clients involved i n the Internet and telecommunications industries. To beef up its Paci fic Northwest presence, Orrick looked to add to its roster of lawyers . It soon identified a group of lawyers employed in Portland, Oregon- based Ater Wynne LLP, who were hired away in March 2003. Most of the lawyers worked in Ater Wynne's finance group, but what made them espe cially attractive was their involvement in the fast growing practice of Indian tribal deals, an area Orrick had begun to purse. In one str oke, the firm became a leader in the practice area. Also in the Unite d States during this period, Orrick opened an office in Orange County , California, by acquiring intellectual property lawyers from the fir m Lyon & Lyon.

Orrick was even more aggressive on the international front in the ear ly 2000s. In 2002 it established an office in Paris by acquiring the 42-lawyer operation of Watson, Farley & Williams. It would focus on cross border and domestic transactions involving structured financ e, leasing, and asset financing. A year later, Orrick hired 23 lawyer s from Ernst & Young legal affiliate Studio Legale Tributario and opened an office in Milan, Italy, to help the firm in its cross-bord er business in Europe and Asia. In 2004 a Rome office was added throu gh the hiring of the 16-lawyer firm Studio Legale e Tributario, which focused on banking and finance and administrative law. In that same year, the Tokyo office expanded, hiring a number of lawyers, includin g its first partner to deal with South Korea. Orrick opened an office in Moscow in 2005, and supplemented it with the launch of a Russian practice in London and Washington, D.C. By acquiring a 25 lawyer grou p from Coudert Brothers in 2005, Orrick also opened an office in Hong Kong, which gave it entry to the potentially lucrative market of the People's Republic of China.

Principal Operating Units: Transactional Practices; Litigation Practices.

Principal Competitors: Clifford Chance LLP; Pillsbury Winthrop Shaw Pittman LLP; Skadden, Arps, Slate, Meagher & Flom LLP.


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