Venable's gamble on D.C. pays Washington office began with 4 lawyers in '81, has 150 today

'Source of great pleasure'

Longtime Balto. firm's revenue seen reaching $100 million next year

October 18, 1998|By Sean Somerville | Sean Somerville,SUN STAFF

It wasn't clear in 1981 whether it was such a good idea for Baltimore's Venable, Baetjer and Howard to open a law office in Washington -- even if it was to be led by the head of former President Carter's justice department.

Being the new kid on the block with a Republican in the White House, former Attorney General Benjamin R. Civiletti started with four other lawyers and had trouble reaching double digits for a few years.

Seventeen years later, it's clear that Civiletti's gamble paid off. Venable's growth in Washington and its suburbs has helped the firm grow to its largest size in its 98-year history.

By absorbing the lawyers of the Washington intellectual property law firm of Spencer & Frank earlier this month, Venable broke the 300-lawyer barrier for the first time.

The firm's annual revenue, about $90 million this year, will likely grow beyond $100 million next year. More importantly, Venable, which doesn't disclose its earnings, said profits have risen by about 40 percent over the last four years.

"It's a source of great pleasure to me," said Civiletti, now Venable's chairman. "Back in 1981, the firm had been so successful for almost 80 years that the idea of developing a second office in Washington was not met with overwhelming enthusiasm by everybody in the firm."

The firm remains the second-largest in Baltimore, behind Piper & Marbury, which has about 350 lawyers. Venable slipped out of the latest American Lawyer's 100 most profitable law firms, but with the Spencer & Frank deal, may climb back into the rankings next year. Its Washington area lawyer force is now as large as its Baltimore contingent, with each region having about 150 lawyers.

Like many firms, Venable's fortunes rose and fell largely with fluctuations in the economy. Venable, which had 290 lawyers in 1990, fell to about 245 in 1993 before climbing to 286 before the Spencer & Frank deal. Unlike other firms, Venable banked on a practice stretching from northern Virginia to northern Maryland -- with a strong presence in Washington.

James L. Shea, the firm's managing partner, said the plan was in place when he assumed his leadership role in 1994. "Our game plan at that point was to sustain and maybe increase slightly the Greater Baltimore lawyer force, but to balance it to come to some level of equilibrium in D.C., which meant some fairly aggressive growth inD.C," Shea said.

Civiletti, a Venable lawyer before he became attorney general, said the plan had two benefits: It would capture legal work in an increasingly regional economy stretching from northern Virginia to Baltimore, and the Washington presence would raise Venable's profile as a national firm.

As William D. Coston, the head of Venable's D.C. office, put it: "Almost any problem that a company has, has some Washington element to it."

Just having more lawyers in Washington wasn't enough. Venable built its Washington office -- and others in Tysons

Corner, Va., and Rockville -- with an eye toward landing information technology and biotechnology companies as clients. "For us that meant sustaining the practice areas we have, but bolstering intellectual property, food and drug, and communications," Shea said.

In what Venable said was one of its typical cases, Sun Microsystems won an appeal of a $250 million Army contract for work stations that went to competing firms. In the case, which started in 1996, a contract appeals board reversed its decision to award the contract to Hewlett Packard and Digital Equipment Corp.

"We're able to talk to the engineers," said Thomas J. Madden, a partner in Venable's Washington office who also has an engineering degree. "We understand the technical issues and how the technology works . . . And we're able to translate that into some basic principles."

For Marriott International, a large Venable client with more routine legal work, the D.C. office was a foot in the door. Not having it "would have made them less attractive from the outset," said Joseph Ryan, executive vice president and general counsel of Bethesda-based Marriott International.

When Marriott chose Venable about two years ago, Ryan thought lawyers would do some development and a little litigation. "They have ended up doing development, litigation, labor, bankruptcy and general business work, particularly for some of our new businesses," Ryan said. "They were just committed to the relationship and they worked their butts off to try to do a good job and anticipate what was coming next."

"What Venable has been able to do is reinvent itself," said Tom Williamson, a former Venable associate and president of the Baltimore-based Trident Group, which assists lawyer groups in mergers. "In 1978, it was essentially a Baltimore firm," with strengths in litigation and labor, he said. "Venable had to face the same issues that several large Baltimore firms had to face in the late 1980s and early '90s -- a declining market.

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