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Midwest firms are forgoing headquarters

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As big Midwestern law firms continue to branch out, their roots are becoming less apparent.

The Nov. 19 announcement that Taft Stettinius & Hollister LLP was jumping into the Chicago market through a merger with Shefsky & Froelich reinforced a trend of firms operating in multiple markets without a specified home office.

“We don’t really have a headquarters,” said Robert J. Hicks, partner-in-charge at Taft’s Indianapolis office. Hicks said that as Shefsky considered merger opportunities with 10 firms, Taft’s decentralized management structure that came with a promise of local autonomy “was really the single factor that tipped the merger our way.”

bob hicks Hicks

Historically traced to offices in Ohio, Taft absorbed the Indianapolis firm Sommer Barnard, which began operating under the Taft name in 2008. Taft’s merger with Shefsky becomes official on Jan. 2, 2014, at which time its 70 attorneys also will begin to operate under the Taft name.

The merger will bring Taft to nearly 400 attorneys firm-wide, billing in the range of $175 million to $200 million annually. About 100 attorneys work in Taft’s Indianapolis office.

“When people say Taft is an out-of-state firm, we just laugh,” Hicks said. “The headquarters is where the nucleus of management is, and the nucleus of management is all over the place.” Senior management is in offices in Indianapolis and Cincinnati, but executive committee representatives come from all offices. With the acquisition of Shefsky, Taft will have offices in seven Midwestern markets plus Phoenix.

But Taft isn’t alone in recognizing the advantages of moving away from a headquarters structure. Ask where a firm is based, and you’re likely to hear something like this from Frost Brown Todd LLC Chairman John Crockett: “We don’t have a firm headquarters or a home office.”

Or this, from Faegre Baker Daniels LLP Chief Operating Partner Tom Froehle: “I don’t really think we saw a reason for a headquarters.

“We don’t have an office that has a majority of people, and we’ve got people in leadership in a number of offices,” he said. Like many firms, Faegre has invested heavily in telecommunications technology connecting its 14 locations. “We wanted to encourage people working across offices,” he added.

Froehle said that for firms based in New York or Los Angeles, for instance, it might be more advantageous to retain the cachet that comes with such an HQ address. But for firms where no particular market dominates, equity among offices is the trend.

Jeff Abrams, partner-in-charge of the Indianapolis office of Benesch Friedlander Coplan & Aronoff LLP, said the firm continues to seek merger opportunities in the Midwest, and that in doing so, realizes that where a firm originated will be less important than its vision for the future.

Like others, he said Benesch pulls its management team from all offices. While Cleveland has the greatest number of lawyers of any of the firm’s seven locations, “We still run things pretty much as a consensus and I don’t think there’s any emphasis on Cleveland people vs. Columbus people vs. Indianapolis people,” Abrams said.

“You want to be represented on the management level as well as in compensation.” Of firms moving away from a home office structure, Abrams added, “I think this is going to continue to happen around the country.”

Moving away from a headquarters structure also helps with recruiting, Abrams believes. “We want to send a message that coming to work in this office, in this city, is going to be just as important as coming to work in City A, B or C.”

Crockett said Frost Brown Todd’s executive committee meets monthly and the location rotates between offices. “We presently have nine offices in five states and we have what we believe is a collaborative, firm-first environment without regard to location.”

Froelich Froelich

As firms expand, Crockett believes there will be less attention to central locations. “It’s probably a trend we’re likely to see continue as long as law firms continue to merge and combine,” he said.

Law firms have combined this year at a record pace, according to legal consulting firm Altman Weil’s MergerLine. By the end of November, Altman Weil reported 78 law firm mergers were announced in 2013. The previous record for mergers and acquisitions had been 70 in 2008.

Hicks said Taft has invested heavily in technology that allows easy teleconferencing between offices, and the firm emphasizes face time with annual retreats attended by lawyers from all branches.

In a statement announcing the merger, Cezar “Cid” M. Froelich of Shefsky & Froelich praised the partnership.

“With this merger, we will strengthen our core practices, but we also will be able to provide many services and cover areas of expertise that we just couldn’t before with a firm of 70 lawyers,” Froelich said. “Best of all, we will not change our client service culture and we will maintain our direct relationships with them. Our respective firm cultures and internal structures align remarkably well. We will be able to provide our clients with all the benefits of a large firm, while maintaining our historical fee structure and client attentiveness of a midsized firm.”

Founded in 1970, Shefsky built a national reputation in gaming law, Hicks said. The firm’s litigation practice, appellate practice and corporate and real estate practices are outstanding, he added, often “fighting out of their weight class” against much larger firms in the market.

Hicks said under the Taft model, Shefsky’s current management team in Chicago will remain in place and the local office will have autonomy. Some of Shefsky’s executives will join Taft’s executive committee, and some key Shefsky personnel, including finance and IT personnel, will take on more regional or firm-wide roles.

Hicks and Taft managing partner Tom Terp from the Cincinnati office plan to spend a considerable amount of time in the Chicago office, but he stressed, “The local guys will manage the office. We’re not going to terminate any employees.”

Taft makes clear “how you’ll be rewarded for being successful,” Hicks said, based on incentives.

“Lawyers are pretty independent cats,” Hicks said. “We’re not a ‘We’re going to tell you what to do’ type of firm. We want everyone to succeed and we have a common compensation system that rewards people. … People want to chase a carrot at the end of a string rather than getting hit over the head with a stick.”

Hicks said the merger also aligns with Taft’s vision.

“Our goal is to have a substantial presence but stay in the Midwest and be in all the significant centers of the Midwest,” he said. “We want to have a Midwestern rate structure with the quality of one of the firms on the coasts.”•

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  1. OK so I'll make this as short as I can. I got a call that my daughter was smoking in the bathroom only her and one other girl was questioned mind you four others left before them anyways they proceeded to interrogate my daughter about smoking and all this time I nor my parents got a phone call,they proceeded to go through her belongings and also pretty much striped searched my daughter including from what my mother said they looked at her Brest without my consent. I am furious also a couple months ago my son hurt his foot and I was never called and it got worse during the day but the way some of the teachers have been treating my kids they are not comfortable going to them because they feel like they are mean or don't care. This is unacceptable in my mind i should be able to send my kids to school without worry but now I worry how the adults there are treating them. I have a lot more but I wanted to know do I have any attempt at a lawsuit because like I said there is more that's just some of what my kids are going through. Please respond. Sincerely concerned single parent

  2. California Sex Offender Management Board (CASOMB) End of Year Report 2014. (page 13) Under the current system many local registering agencies are challenged just keeping up with registration paperwork. It takes an hour or more to process each registrant, the majority of whom are low risk offenders. As a result law enforcement cannot monitor higher risk offenders more intensively in the community due to the sheer numbers on the registry. Some of the consequences of lengthy and unnecessary registration requirements actually destabilize the life’s of registrants and those -such as families- whose lives are often substantially impacted. Such consequences are thought to raise levels of known risk factors while providing no discernible benefit in terms of community safety. The full report is available online at. http://www.casomb.org/index.cfm?pid=231 National Institute of Justice (NIJ) US Department of Justice Office of Justice Programs United States of America. The overall conclusion is that Megan’s law has had no demonstrated effect on sexual offenses in New Jersey, calling into question the justification for start-up and operational costs. Megan’s Law has had no effect on time to first rearrest for known sex offenders and has not reduced sexual reoffending. Neither has it had an impact on the type of sexual reoffense or first-time sexual offense. The study also found that the law had not reduced the number of victims of sexual offenses. The full report is available online at. https://www.ncjrs.gov/app/publications/abstract.aspx? ID=247350 The University of Chicago Press for The Booth School of Business of the University of Chicago and The University of Chicago Law School Article DOI: 10.1086/658483 Conclusion. The data in these three data sets do not strongly support the effectiveness of sex offender registries. The national panel data do not show a significant decrease in the rate of rape or the arrest rate for sexual abuse after implementation of a registry via the Internet. The BJS data that tracked individual sex offenders after their release in 1994 did not show that registration had a significantly negative effect on recidivism. And the D.C. crime data do not show that knowing the location of sex offenders by census block can help protect the locations of sexual abuse. This pattern of noneffectiveness across the data sets does not support the conclusion that sex offender registries are successful in meeting their objectives of increasing public safety and lowering recidivism rates. The full report is available online at. http://www.jstor.org/stable/full/10.1086/658483 These are not isolated conclusions but are the same outcomes in the majority of conclusions and reports on this subject from multiple government agencies and throughout the academic community. People, including the media and other organizations should not rely on and reiterate the statements and opinions of the legislators or other people as to the need for these laws because of the high recidivism rates and the high risk offenders pose to the public which simply is not true and is pure hyperbole and fiction. They should rely on facts and data collected and submitted in reports from the leading authorities and credible experts in the fields such as the following. California Sex Offender Management Board (CASOMB) Sex offender recidivism rate for a new sex offense is 0.8% (page 30) The full report is available online at http://www.cdcr.ca.gov/Adult_Research_Branch/Research_Documents/2014_Outcome_Evaluation_Report_7-6-2015.pdf California Sex Offender Management Board (CASOMB) (page 38) Sex offender recidivism rate for a new sex offense is 1.8% The full report is available online at. http://www.google.com/url?sa= t&source=web&cd=1&ved= 0CCEQFjAA&url=http%3A%2F% 2Fwww.cdcr.ca.gov%2FAdult_ Research_Branch%2FResearch_ documents%2FOutcome_ evaluation_Report_2013.pdf&ei= C9dSVePNF8HfoATX-IBo&usg=AFQjCNE9I6ueHz-o2mZUnuxLPTyiRdjDsQ Bureau of Justice Statistics 5 PERCENT OF SEX OFFENDERS REARRESTED FOR ANOTHER SEX CRIME WITHIN 3 YEARS OF PRISON RELEASE WASHINGTON, D.C. Within 3 years following their 1994 state prison release, 5.3 percent of sex offenders (men who had committed rape or sexual assault) were rearrested for another sex crime, the Justice Department’s Bureau of Justice Statistics (BJS) announced today. The full report is available online at. http://www.bjs.gov/content/pub/press/rsorp94pr.cfm Document title; A Model of Static and Dynamic Sex Offender Risk Assessment Author: Robert J. McGrath, Michael P. Lasher, Georgia F. Cumming Document No.: 236217 Date Received: October 2011 Award Number: 2008-DD-BX-0013 Findings: Study of 759 adult male offenders under community supervision Re-arrest rate: 4.6% after 3-year follow-up The sexual re-offense rates for the 746 released in 2005 are much lower than what many in the public have been led to expect or believe. These low re-offense rates appear to contradict a conventional wisdom that sex offenders have very high sexual re-offense rates. The full report is available online at. https://www.ncjrs.gov/pdffiles1/nij/grants/236217.pdf Document Title: SEX OFFENDER SENTENCING IN WASHINGTON STATE: RECIDIVISM RATES BY: Washington State Institute For Public Policy. A study of 4,091 sex offenders either released from prison or community supervision form 1994 to 1998 and examined for 5 years Findings: Sex Crime Recidivism Rate: 2.7% Link to Report: http://www.oncefallen.com/files/Washington_SO_Recid_2005.pdf Document Title: Indiana’s Recidivism Rates Decline for Third Consecutive Year BY: Indiana Department of Correction 2009. The recidivism rate for sex offenders returning on a new sex offense was 1.05%, one of the lowest in the nation. In a time when sex offenders continue to face additional post-release requirements that often result in their return to prison for violating technical rules such as registration and residency restrictions, the instances of sex offenders returning to prison due to the commitment of a new sex crime is extremely low. Findings: sex offenders returning on a new sex offense was 1.05% Link to Report: http://www.in.gov/idoc/files/RecidivismRelease.pdf Once again, These are not isolated conclusions but are the same outcomes in the majority of reports on this subject from multiple government agencies and throughout the academic community. No one can doubt that child sexual abuse is traumatic and devastating. The question is not whether the state has an interest in preventing such harm, but whether current laws are effective in doing so. Megan’s law is a failure and is destroying families and their children’s lives and is costing tax payers millions upon millions of dollars. The following is just one example of the estimated cost just to implement SORNA which many states refused to do. From Justice Policy Institute. Estimated cost to implement SORNA Here are some of the estimates made in 2009 expressed in 2014 current dollars: California, $66M; Florida, $34M; Illinois, $24M; New York, $35M; Pennsylvania, $22M; Texas, $44M. In 2014 dollars, Virginia’s estimate for implementation was $14M, and the annual operating cost after that would be $10M. For the US, the total is $547M. That’s over half a billion dollars – every year – for something that doesn’t work. http://www.justicepolicy.org/images/upload/08-08_FAC_SORNACosts_JJ.pdf. Attempting to use under-reporting to justify the existence of the registry is another myth, or a lie. This is another form of misinformation perpetrated by those who either have a fiduciary interest in continuing the unconstitutional treatment of a disfavored group or are seeking to justify their need for punishment for people who have already paid for their crime by loss of their freedom through incarceration and are now attempting to reenter society as honest citizens. When this information is placed into the public’s attention by naive media then you have to wonder if the media also falls into one of these two groups that are not truly interested in reporting the truth. Both of these groups of people that have that type of mentality can be classified as vigilantes, bullies, or sociopaths, and are responsible for the destruction of our constitutional values and the erosion of personal freedoms in this country. I think the media or other organizations need to do a in depth investigation into the false assumptions and false data that has been used to further these laws and to research all the collateral damages being caused by these laws and the unconstitutional injustices that are occurring across the country. They should include these injustices in their report so the public can be better informed on what is truly happening in this country on this subject. Thank you for your time.

  3. Freedom as granted in the Constitution cannot be summarily disallowed without Due Process. Unable to to to the gym, church, bowling alley? What is this 1984 level nonsense? Congrats to Brian for having the courage to say that this was enough! and Congrats to the ACLU on the win!

  4. America's hyper-phobia about convicted sex offenders must end! Politicians must stop pandering to knee-jerk public hysteria. And the public needs to learn the facts. Research by the California Sex Offender Management Board as shown a recidivism rate for convicted sex offenders of less than 1%. Less than 1%! Furthermore, research shows that by year 17 after their conviction, a convicted sex offender is no more likely to commit a new sex offense than any other member of the public. Put away your torches and pitchforks. Get the facts. Stop hysteria.

  5. He was convicted 23 years ago. How old was he then? He probably was a juvenile. People do stupid things, especially before their brain is fully developed. Why are we continuing to punish him in 2016? If he hasn't re-offended by now, it's very, very unlikely he ever will. He paid for his mistake sufficiently. Let him live his life in peace.

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