Alschuler breakup complete with launch of Dreier Stein: Grossman says firm will be stronger; clients include Blockbuster.

THE long percolating breakup of Alschuler Grossman Stein & Kahan LLP is a done deal. Name partners Stanton "Larry" Stein and Bob Kahan are leaving with 30 to 45 lawyers to open Dreier Stein & Kahan LLP.

Stein, one of the most-respected talent representatives in entertainment law, could not comment on the deal. What's known is that it takes effect Jan. 1 and he's guaranteed more than $2 million in annual salary for the first three years. Stein and Kahan will be leasing two floors in the Santa Monica's Water Garden.

For his part, Managing Partner Marshall Grossman is anxious to begin a new era at Alschuler Grossman LLP. Several major firms are among his clients, including Blockbuster Inc. and Grupo Televisa SA. He also represents USC.

"Alschuler Grossman will be a stronger firm," said Grossman, who joined right out of law school. "And it will be more profitable, by a couple hundred thousand dollars per partner."

It's been a tumultuous year at Alschuler Grossman. The firm earlier this year discussed a partnership with what was then Cooley Godward, but talks broke down and Cooley merged with Kronish Lieb Weiner & Hellman to create Cooley Godward Kronish LLP. There also was wide speculation that Alschuler was near a deal with Robins Kaplan Miller Ciresi LLP, but Grossman now says those talks never got off the ground.

The uncertain atmosphere may have taken a toll. The firm had 94 lawyers earlier this year and is down to 85 now. Among the losses were Mark Neubaner and Michael R. Heimbold to Steptoe & Johnson LLP.

Stein and Grossman had their share of disagreements, and it appears that will be the case through the dissolution. Grossman has said he'll keep about 55 lawyers and that Stein will take about 30. Stein has said he's taking at least 40. Entertainment co-chairs Michael Plonsker and Yakub Hazzard will be exiting with Stein.

The breakup should put the 50-year-old firm in a better position with potential merger partners, Grossman said. "We're open to a lunch or dinner."