Aggressive Quinn Law Firm joins elite $1 million club.

IT doesn't look like an expensive law firm. The downtown offices of Quinn Emanuel Urquhart Oliver & Hedges LLP, south of L.A.'s financial district, have the exposed ceilings more familiar to the "creative" office space of dot-coms. It's an image enhanced by its lawyers, who stroll the halls in Hawaiian shirts and shorts.

Yet the relaxed appearance belies a tough-minded style. Stacked with a crew of former federal prosecutors and corporate general counsel, Quinn Emanuel has joined the ranks of firms generating $1 million in profits-per-partner, a threshold achieved only by the largest firms in the city.

The firm, now geared toward intellectual property and patent disputes, made its mark by working for the human resources departments of large corporations, mostly in employment-termination cases.

But when the firm was picked, in 1993, by Hughes Aircraft to handle an arbitration matter, which it won, it started on a path to ever-larger clients and revenues.

In the process, it has grown from fewer than 75 lawyers in the late 1990s to 190 today.

Among Quinn Emanuel's most notable cases was its representation of General Motors Corp. in a patent infringement suit against Volkswagen AG that settled in 1996 for $1.1 billion. The firm also obtained dismissals of several class-action lawsuits filed in 1998 against senior officers of Northrop Grumman Corp. stemming from its failed merger with Lockheed Martin Corp.

The firm now represents John Moores, former chairman of Peregrine Systems Inc. The company, its executives and board members are under investigation by the U.S. Attorney's Office in San Diego stemming from allegations that $85 million in fake sales were written off as one-time charges on its books. Three former Peregrine executives have already pleaded guilty to fraud, including its former chief financial officer.

Quinn Emanuel continues to work with Hughes, representing its DirecTV unit in a national signal piracy case, and it was recently retained by a number of former and current in-house lawyers of Enron Corp., as part of the ongoing federal investigation.

Other clients include several L.A. city officials, including Mayor James Hahn and Police Chief William Bratton, named individually in a recent case alleging excessive force and misconduct by city police officers.

Since its founding, the firm has secured a favorable settlement or courtroom victory in 92.8 percent of its cases.

Russell Frackman, a partner at Mitchell Silberberg & Knupp LLP, went head-to-head with Quinn Emanuel in a case involving the 1990s song, "Barbie Girl."

"They are very hard-nosed litigators," he said. "They didn't leave any stone unturned. They even turned over some stones I didn't think needed turning over. They put their heads down and push ahead."

Frackman, who called the case one of the most "heavily contested" in his career, represented MCA Records in the patent infringement suit brought by Quinn Emanuel client Mattel Inc., owner of the "Barbie" brand.

He was also one of the 7.2 percent who beat the firm: both a federal judge and the 9th Circuit Court of Appeals threw the case out last year.

Chasing deals

In its second year, Quinn Emanuel booked $3 million in revenues. Last year it reached $106 million, part of long-range plan to exceed $100 million by 2002 that was fed, in part, by a decision to take on more contingency cases, some of which could bring in $100 million at a time.

"We've held our own against some of the best plaintiffs lawyers in America," Urquhart said, "and we're seeing those people fly around in private planes."

In going after bigger clients and bigger cases, it has drawn from the ranks of high-ranking government and corporate attorneys.

Around 15 of the firm's 55 partners are former federal prosecutors, including John Gordon, former U.S. Attorney for the Central District of California. It has added five rainmakers to its ranks in the past year, including Sandy Litvack, who for years served as general counsel at Walt Disney Co.

In the early years, it was not as easy. "We went out and begged for business," said partner Bill Urquhart who heads the firm with co-founder John Quinn. "Our pitch was, 'Hire lawyers with the same caliber as Gibson or O'Melveny for one-third off the price.'"

It still considers itself a low-cost alternative to the large law firms, although its senior partners now bill about $600 an hour.

From its nine floors at 825 S. Figueroa St., the firm represents a number of large corporate clients, including IBM Corp., Mattel, Lockheed Martin and the Academy of Motion Picture Arts and Sciences.

It has opened branch offices in Redwood Shores, San Francisco and New York in the past six years. The firm also has small outposts in Palo Alto, San Diego, Palm Springs and Indian Wells.

Quinn Emanuel watches its costs. With about two associates per partner, the firm tries to keep its staff limited on cases, Urquhart said. It has no debt and does not finance its receivables.

The cost controls have created some strains. One former partner, who asked to remain anonymous, said the firm's support staff was paid 20 percent to 30 percent under market, increasing the burden on lawyers to do more work. Over the past several months, tour partners have left the firm.

Urquhart admits that lawyers do much of the work themselves, but argued that the structure gives up-and-coming attorneys more responsibilities and experience.

Quinn, a 1976 Harvard Law School graduate, and Urquhart, Fordham Law 1977, still make the bulk of the firm's decisions. There is no executive committee and only a handful of partner meetings a year.

Lex Brainerd, a former partner who opened Quinn Emanuel's location in Palo Alto, said that with 50 to 60 attorneys, there's not much need for an executive committee, anyway. But, looking back, he said Quinn Emanuel is no longer the same firm when he was there.

"Quinn Emanuel has changed quite a bit since I left," said Brainerd, who left in 1999 for Heller Ehrman White & McAuliffe LLP. "They've had phenomenal growth."

Quinn Emanuel Urquhart Oliver & Hedges LLP

Year founded: 1986

Partners: 55

Attorneys: 190

Offices: 6

Clients: IBM, Mattel, Walt Disney, Academy of Motion Picture Arts & Sciences, AOL Time Warner

Revenue in 2002: $106 million

Profits per partner in 2002: $1 million

Total value of judgments and settlements: $1.5 billion *

Practice areas: Employment, securities, patent, trademark, accounting, trade secrets, class action

* As of June 2003.