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Attorneys Move To Valley Firms As Arter Closes

Attorneys Move To Valley Firms As Arter Closes By JACQUELINE FOX Staff Reporter Shock, a little sadness then on to the business at hand. That’s the way one attorney described the final days leading up to the July 15 closure of the Woodland Hills office of Cleveland-based Arter & Hadden LLP, the only national law firm with a Valley presence. After struggling for some time with financial difficulties stemming from an overstock of office space, Arter announced in an unsigned June 27 memo to its roughly 240 attorneys nationwide that the firm was “planning for the winding up of the affairs of Arter & Hadden” after 160 years in business. Deborah Feldman, one of the seven attorneys at the Woodland Hills office, as well as a partner who had worked at the firm since 1998, said despite warning signs by late spring that the company was faltering, the official announcement came as a blow to her and the other attorneys and the office’s 17 employees. But she quickly added that, once they were made aware of the pending closure, the local “wind up” was implemented and completed in an orderly, professional manner.” “I can’t tell you how proud I am of our team here,” said Feldman, who specializes in corporate real estate transactions. She has accepted an offer from the Sherman Oaks firm of Kulik, Gottesman & Mouton, which specializes in real estate, entertainment and general corporate law. “This was the most orderly, professional transition,” said Feldman, who has been credited as having played a front-and-center role in developing the business of law in the Valley and bringing national firms to the region. “No body got kicked out, everybody got paid and everyone kept working right up until the end. Having heard horror stories about similar closures, I can tell you that this was handled very well.” Dan Bailey, chairman of Arter’s executive committee declined to comment on the closures directly, referring instead to his statements in a July 3 press release, in which he said the firm’s “overhead structure no longer reflects the size of our firm, and we have been unable to obtain necessary relief from our landlords and others.” Arter embarked on a rapid-fire expansion throughout the late 1980s and peaked with about 450 attorneys nationwide by 1999. However, many of the firm’s expansion plans proved unprofitable and by 2000 Arter had scaled the number of attorneys down to about 240, yet as recently as late May had only closed two of its offices down. Arter established the Woodland Hills office in 1987 following the closure there of what was the law firm of Kindel and Anderson. At the time of the announcement, Arter had 10 offices throughout the country, including Irvine, San Diego, San Francisco and one European affiliate office in Geneva. Moving to Lewitt David Gurnick, the firm’s managing partner, along with attorneys Sue Bendavid-Arbi, Paul Grinblat and Stacey West have all moved over to the Encino law firm of Lewitt, Hackman, Shapiro, Marshall & Harlan. Keith Zimmet, a managing partner at Lewitt, one of the oldest and largest full-service firms in the Valley with 20 attorneys on staff, shied away from calling the changes a coup for his firm, but said that the Arter transplants offered specialized areas of practice that Lewitt doesn’t currently have attorneys to cover. “We had a relationship with Arter and some of its employees that goes back to the days when the firm was Kindel and Anderson, so for us, there is already some familiarity,” said Zimmet. “Sue practices in employment law, David Gurnick specializes in franchise law, and these are two areas that we don’t currently focus on, so their coming here gives us that much more depth. We certainly think this is an excellent move.” According to Feldman, Arter attorney David Gillen has not made any of his plans for employment public. Her other attorney and colleague, William Staley, opened up his private practice on Ventura Boulevard one day after the Woodland Hills closure, taking his long-time legal assistant, Susan Rognlie with him. Staley, who specializes in business and tax law and non profits, said he was planning on a vacation in Wyoming when he first got wind of the pending changes. He was with Kindel when it dissolved and at one point worked in Arter’s Los Angeles office. News was shock Staley agreed that the process of shutting down the Woodland Hills office was professional, but added that the news still came as a shock. “It was a big surprise to me,” said Staley. “The first inclination we had was really not until Friday June 13 during a management meeting when we were told that there was a possibility that the firm might close due to inefficient profitability. I had always seen this office as being very profitable. So it was kind of a shock.” In the unsigned memo to the firm, attorneys were told that officials would have preferred to offer more advance notice than they had, but that sensitive negotiations to resolve Arter’s financial woes would have been compromised. “We believed that we had a realistic opportunity to obtain rent concessions and the additional funding that would have been sufficient to permit Arter & Hadden to continue to operate going forward,” the memo stated. “However, due to the sensitivity of the negotiations, we believed that giving notice sooner may have put the discussions at risk and eliminated any chance to restructure our debt and continue operations. Accordingly, we are giving you as much notice as is practicable under the circumstances.”

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