Spokane Journal of Business

Industry-focused hubs sprout

Lee & Hayes gears groups around six sectors; other firms continue to tout overall expertise

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-—Staff photo by Treva Lind
Lee & Hayes attorney Dan Wadkins works in Spokane as part of the firm's wine, beer, and spirits industry-focused practice group.

More law firms are establishing industry-focused areas of practice, as opposed to operating only in broader-based legal areas of practice, says at least one Spokane firm.

Traditionally, law firms organize themselves into what the professional calls general practice areas that can include business and corporate law, litigation, real estate law, intellectual property, taxation, and banking-finance, among others. However, some practices are tweaking that model.

Shaun Cross, CEO of Spokane-based Lee & Hayes PLLC, says that firm specializes mainly in intellectual property, but also has six industry-focused practice groups that each involve several attorneys assigned primarily to provide legal services geared toward a particular industry.

"You're creating groups of attorneys within the firm who focus on these industries," Cross says. "It's more creating groups that are matching what is happening in the marketplace."

A 2013 Law Firm Outlook report released earlier this year by Citi Private Bank and a Florida-based consulting firm said that a growing number of law firms nationally now are structuring services around certain industries.

"More and more firms are taking their cue from their clients and other professional services firms and structuring their services around industries," the report said. "Clients today are looking for highly specialized expertise."

The Lee & Hayes industry groups include fashion; wine, beer, and spirits; government relations; electrical and computer engineering; chemical and life sciences; and mechanical engineering. In this model, a group of attorneys brings in various legal backgrounds—ranging from intellectual property and government regulations to water issues—and they focus that knowledge toward the legal needs of an industry for most of their work, he says.

Cross adds, "What we're trying to do is create an industry group that meets all of that client's legal needs but looking at it through their industry lens rather than through a traditional law firm lens."

Other attorneys here say that while they're seeing some of this trend, a majority of clients still demand expertise in a number of broad practice areas, although they also have attorneys with specific industry expertise.

Kevin Curtis, chairman at Spokane-based Winston & Cashatt Lawyers PS, says, "I think it's more prevalent in larger cities, and we've seen a bit of a trend in that area. I don't think we're seeing that trend in the larger firms in Spokane in the same way."

He adds, "I think what you see more of is a constant reassessment of the practice areas to decide whether to hire attorneys, add resources where you think certain practice areas are rising or falling."

Curtis says the construction industry is an example of a practice area that was explosive and solid for many law firms here and in the Northwest, but that sector slowed substantially during the recession.

"Now, with the economic rebound, we foresee growth in that industry, so we will enlarge our practice area," Curtis says. "That's an example of a practice area that ebbs and flows. Some industries will have ebbs and flows based on the economy, and you always analyze existing focus areas in addition to what you see as emerging areas."

He says he expects emerging law specialty focuses to include more elder-care and health-care law, social media law, and electronic discovery law involving what electronic files are allowed as evidence in court.

Jane Brown, man-aging partner of Spokane-based Paine Hamblen LLP, also says she has seen some momentum toward industry focuses, but that the approach currently isn't prevalent in the Spokane area. She says large, full-service firms are well suited to meet industry clients' needs, and the offices have attorneys who can provide industry expertise when needed.

"We have attorneys who work more in certain industries, yes, certainly in the power industry," Brown says. "We have a number of attorneys who have expertise in the energy industry. We opened an office in Walla Walla earlier this year, and understanding clients with the wine industry and vendors is critical."

However, she says law firms still need to offer general practice areas focused on taking care of clients across a wide range of legal issues.

"I can see, generally, cases that require those expertises when there is a team that gets called in to deal with issues, but you have to be careful because you have to make sure you're taking care of your clients' needs, but not overkill," Brown says.

She adds, "A classic issue is that clients are very sensitive to legal fees, especially with the recent downturn. They want to be well serviced, but they don't want an extra six lawyers working on their issue."

Phillip Carstens, a Spokane-based K&L Gates LLP administrative partner, says that firm's offices cover many legal specialties both in Spokane and internationally, but generally, K&L Gates as a large law firm has broader practice areas, rather than a number of industry focuses.

"The clients demand we have expertise in broad practices and in a number of practice areas," he says. "In a larger firm, clients can find just about everything they need."

However, Carstens adds that K&L Gates across all of its offices offers some specialty focuses, including on energy, oil, and gas industries' legal issues, among others.

At Lee & Hayes, Cross contends that the U.S. and world are heading toward an innovation-driven economy, so understanding key legal concerns of industries, their intellectual property, and brand needs is crucial.

"In 1970, for 90 percent of the S&P companies, the value of companies was in tangible properties—such as U.S. Steel, General Motors, and Ford with huge plants," and major holdings in facilities, equipment, and real estate, he says. "Today, for the S&P, 90 percent of companies have value in intangibles that include patents, copyrights, trade secrets—like Google, Facebook, Amazon."

He adds, "The traditional law firm view is a 100-year-old model; it's breaking down."

The wine, beer, and spirits group, for example, has a major focus on legally protecting trademarks, brands, trade secrets, and copyrights as operators such as wineries continue to grow in the state, Cross says.

Other issues for wineries, breweries, and distillery owners include land use and water rights issues, and a myriad of state and federal alcohol regulations, he says.

Dan Wadkins, a Spokane-based Lee & Hayes attorney, works in the firm's wine, beer, and spirits group with a background in trademark and brand protection. He also supports clients in corporate and business transactions, and securities and corporate finance.

He says that the wine, beer, and spirits group emerged as a major focus area this year, although the firm has offered such support in that legal arena in recent years.

He says the group has at least six attorneys, including some based in Lee & Hayes' Seattle office, who support that industry focus, although they may work in one or two other practice groups.

Two of the group's Seattle attorneys "are almost solely devoted to this practice group," Wadkins says.

He adds, "Washington is the second largest wine-producing state in the country, and we also happened to be doing this when the microbrewery and distillery industries are really starting to take off as well."

"The keys for any alcoholic beverage business is having a good product and then having a good distinct brand," he adds. "It's sometimes a very tangled web of regulations that can be daunting to small wineries and producers. A great example is just the labeling laws, and the labels have specific information that has to be on them."

Another example of an industry-specific issue involves a winery being able to claim legally on labels a specific geographic region where grapes for wine production are grown, Wadkins says.

"The wines produced from grapes are distinct and have certain flavors and attributes," he adds, depending on whether they're from Walla Walla or the Columbia Basin for example. "Winery operators want to say, 'My grapes come from Red Mountain or Snake Hill.'"

Treva Lind
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