Stuart Liner, the entrepreneurial founder of Los Angeles’ innovative Liner Law, has been on the market for game-changing laterals. This week, he made a huge acquisition for his 70-lawyer firm adding 10 lawyers from Dickstein, led by Kirk Pasich.
Pasich brings an insurance recovery group that has secured more than $5 billion for clients from their insurers. In L.A. circles, one of the platinum components of that practice is the several hundred million dollars it has recovered for entertainment companies and actors, producers, musicians, studios and sports figures.
“We really believe that there are fundamental flaws in this bigger is better mentality for law firms,” said Liner. “You don’t need an 800-lawyer platform to get the most for yourself and your clients. There are plenty of smaller firms that can create incredibly strong legal practices in niche areas that frankly are an improvement not just for the lawyers’ practices but also for the clients in being able to get the best value for what they’re hiring us to do.”
Pasich has long had one of the most valuable practices in L.A., which he started at Paul Hastings. Since then, he’s amassed a record of 60 trials and arbitrations and more than 50 appellate proceedings while a partner at Hill Wynne, Howrey and Dickstein. He was regularly courted by major national firms that offered to double his compensation and he declined to even have coffee with them.
Liner specifically hired legal recruiter Bobbie McMorrow to introduce Pasich and Liner in 2013, and they immediately hit it off. But Pasich wasn’t ready to make a move, and Liner was willing to bide his time. Through a series of meals and a trip to the Super Bowl in February this year, the two found common ground from their upbringings to their deep understanding of the L.A. legal market and a shared appreciation for risk taking and entrepreneurship.
From Liner’s perspective, Pasich’s representation of clients in entertainment, aerospace and general corporate America was highly appealing. “They represent some of the biggest companies in the country. From that perspective, it’s nothing but upside for a firm like ours.”
Pasich already knew several of Liner’s partners – he was on Loyola Law Review with Todd Stark; was colleagues with Robbin Itkin at Paul Hastings; and has litigated against entertainment lawyers Larry Stein and Bennett Bigman. And, amidst Dickstein’s ups and downs, Pasich felt it was in a good position for his departure, having had a very good year in 2014, having no long-term debt, and resolved possible lease issues.
“But from my perspective, the move wasn’t motivated by what was going on at Dickstein,” said Pasich. “I plan to continue working with my Dickstein colleagues. I was motivated by the fact I was really impressed with Stuart and his vision of the firm, and the chance to be part of a firm that I believe to be truly different from the norm.”
That vision includes no minimum billable hour requirements for associates, shared credit for origination, minimal meetings, and an appreciation of business ventures related to law practice and some not.
“All of these things came together like karma,” said Pasich. “I would never think of going to another big national firm, and other midsize L.A. firms just didn’t strike me the same way.”
“Stuart is a different game,” he said. “We weren’t looking to move, and it took something very special to get us to think about moving.”
Liner had targeted insurance recovery as a practice area to build out roughly five years ago. “It strategically made sense to me that it would lead to conflicts at larger firms we didn’t have to worry about. It’s a premier niche practice that gets and deserves premium rates and is a national practice, which also provides us with opportunities to market many of these clients for alternative legal services.
“It kind of hits the whole trifecta in terms of an ideal fit for a law firm and certainly for a regional firm like ours, even though we view ourselves as having national reach,” said Liner. “We are exclusively in LA, so we have to be smarter about the kind of practices we bring in and this was national.”
A critical piece of the Liner model is its risk-taking – the firm makes part of its revenue on billable hours; another piece on shared-risk with clients; and another piece on business investment.
“I would have liked to do more alternate arrangements over the years,” said Pasich, whose recoveries can be in the $500M range. “I love sharing risk with clients.”
“Our goal has constantly been to be considered partners with our clients,” said Liner. “To do that, we need to provide them with alternate ways to value our services. While some of that revolves around fee arrangements, it also involves an understanding of our clients’ businesses to add value through business opportunities or helping them come to some vision of where they’re going based on legal expertise we can provide.”
The timing clicked for both sides in May, with the resolution of a lawsuit in which Pasich’s group was seeking several hundred million dollars for a client. In April, they defeated a motion for summary judgment, setting the table for a resolution. Suddenly, the eight weeks he had blocked off for trial became an opportunity to make the move.
“One of the things Stuart said that sealed the deal was ‘I promise to always be a good partner,’ “ said Pasich. “I’ve never had a partner actually say that before.”
Among other laterals Liner has acquired in the past year are famed entertainment litigator Larry Feldman; bankruptcy specialists Itkin, Alexander Kelly and Kelly Frazier; and real estate litigators Wayne Grajewski, Karen Hallock and Amy Wong and real estate deal partner Richard Schloss.