Among the names floated Monday by administration officials are Homeland Security Secretary Michael Chertoff and White House anti-terrorism coordinator Frances Townsend. Former Deputy Attorney General Larry Thompson is a White House prospect. So is former solicitor general Theodore B. Olson, but sources were unsure whether he would want the job.

Republican sources also disclosed that it is now a virtual certainty that Deputy Attorney General Paul J. McNulty, whose incomplete and inaccurate congressional testimony about the prosecutors helped precipitate the crisis, will also resign shortly. Officials were debating whether Gonzales and McNulty should depart at the same time or whether McNulty should go a day or two after Gonzales. Still known as "The Judge" for his service on the Texas Supreme Court, Gonzales is one of the few remaining original Texans who came to Washington with President Bush.

Former U.S. Sen. Rick Santorum is joining law firm Eckert Seamans Cherin & Mellott LLC and is expected to provide "strategic counseling" to clients, the firm said Monday.

Santorum, a three-term Republican senator from Penn Hills, was defeated in his bid for re-election by Bob Casey in November.

 
Santorum will work out of Eckert Seamans' Washington, D.C., office, the law firm said.

"We are extremely pleased that Rick is joining our firm and that our clients will have the benefit of his understanding of what it takes for businesses to succeed in today's global economy," Eckert Seamans CEO Tim Ryan said in a statement.

http://www.eckertseamans.com

For a second consecutive day, thousands of protesters flowed through the streets of several cities Sunday to call for an end to the funding of the Iraq war or the immediate return of U.S. troops.

Demonstrators converged in San Francisco, New York, Portland, Ore., and elsewhere to mark the fourth anniversary of the U.S. invasion of Iraq and call on President Bush to heed what they said was the will of the people.

In largely peaceful demonstrations, about 3,000 people in San Francisco closed Market Street; in New York, more than 1,000 protesters converged in a park near the U.N. headquarters.

Dozens of police in San Francisco on foot and motorcycle blocked traffic and kept an eye on the crowd, which stretched for blocks through the financial district. No arrests were reported by late Sunday afternoon.

"I'm reserving judgment on that, until we finish the inquiry," Sen. Arlen Specter, R-Pa., ranking GOP member of the Senate Judiciary Committee, on "Fox News Sunday."

"I think it's highly unlikely he survives," remarked Sen. Charles Schumer, D-N.Y., during an interview with NBC's "Meet the Press." "I wouldn't be surprised if a week from now, he's no longer attorney general. … Instead of just being the president's lawyer who rubber stamps everything the White House wants, he has a role as attorney general as the chief law enforcement officer of the land without fear or favor."

On Monday, the Justice Department is expected to release more documents detailing the role Gonzales, Justice Department officials and the White House played in the firings.

On Tuesday, the White House is expected to announce whether it will allow former White House counsel Harriet Miers and Deputy Chief of Staff Karl Rove to testify before Congress.

If they don't, the chairman of the Senate Judiciary committee promises subpoenas.

"I want testimony under oath," Sen. Patrick Leahy, D-Vt., said on "This Week." "I am sick and tired of getting half-truths on this."

U.S. attorneys serve at the pleasure of the president. But the Bush administration got itself into trouble by claiming the dismissals were solely performance-related. The White House did not disclose its own involvement until e-mails surfaced suggesting political loyalty may have played a role.

The three e-mails also show that presidential adviser Karl Rove asked the White House counsel's office in January 2005 whether it planned to proceed with a proposal to fire all 93 federal prosecutors. Officials said yesterday that Rove was opposed to that idea but wanted to know whether the Justice Department planned to carry it out.

The e-mails provide new details about the early decision-making that led to the firings of eight US attorneys last year, indicating that Justice Department officials endorsed a larger number of firings than has been disclosed and that Rove expressed an early interest in the debate.

The messages also show that an internal administration push to remove a large number of federal prosecutors was well underway even as Alberto R. Gonzales, then the White House counsel, was preparing for Senate hearings on his nomination to be attorney general.

Gonzales talked "briefly" in December 2004, the messages show, with D. Kyle Sampson, who would become his chief of staff at the Justice Department, about the plan to remove US attorneys. Justice spokeswoman Tasia Scolinos said Gonzales has "no recollection" of discussing the prosecutors' firings at the time, when he was preparing for his January 2005 confirmation hearings.

The dismissals, and the Bush administration's shifting explanations for them, led a growing number of lawmakers to demand Gonzales's resignation this week. Justice Department documents released Tuesday contradicted the contention that the White House was not closely involved.

A second Republican, Senator Gordon Smith, Republican of Oregon, called for Gonzales's ouster yesterday. Senator John E. Sununu, Republican of New Hampshire, said Wednesday that Gonzales should resign.

"The senator believes, as a matter of credibility, it would be most helpful to have an attorney general we can have full confidence in," said Smith's spokeswoman.

Senator Mark Pryor of Arkansas, one of six Democrats to support Gonzales's confirmation, also demanded his resignation after learning of e-mails that showed Justice Department officials planning to circumvent Pryor on the replacement for a fired Little Rock US attorney in 2006. Pryor said Gonzales had told him there was no attempt to avoid his input.

None of the three new e-mails is from Rove himself. They are part of a string of e-mail correspondence among other officials.

The only number that is down for Stevens & Lee's 2006 financial performance is its hours billed, as the firm posted double-digit increases in revenue and profit.

The firm saw a 10.3 percent increase in gross revenue, from $102 million in 2005 to $112.5 million in 2006.

The revenue per lawyer grew by 14.8 percent, from $610,000 in 2005 to $700,000 in 2006. The profits per equity partner increased by 16 percent, from $655,000 in 2005 to $760,000 in 2006.

Stevens & Lee has a small non-equity tier, with 13 of the 161 attorneys in 2006 falling into that category. Managing partner Joseph M. Harenza said only about five of those attorneys are income partners, while the others are senior counsel or something similar. Of the attorneys, 99 were equity partners, dropping from 103 in 2005. The average compensation for all partners rose from $635,000 in 2005 to $700,000 in 2006.

Harenza attributes the firm's overall growth to an increase in revenue through a focus on specialized legal work and a simple cost-containment strategy. He said this is the 10th straight year the Reading, Pa.-based firm has seen improved financial results.

The statistic the firm places the most emphasis on, Harenza said, is one The American Lawyer does not calculate for its Am Law survey.

The firm calls it the net income per lawyer, and calculates the number by subtracting expenses from the total revenue with the exception of attorney compensation, Harenza said. The firm reported that number at $557,000, compared to 2005's net income per lawyer of $479,000.

Altman Weil consultant Bill Brennan said his firm looks to RPL and the net income per lawyer as the two most important indicators of a firm's financial health.

Stevens & Lee reported a 69 percent return on the dollar to its partners and an 80 percent return to its lawyers for 2006.

Of the $112.5 million in gross revenue, $75.5 million went to equity partner compensation and another $3 million went to non-equity partners.

There are about 40 nonlawyer professionals in the firm that are paid as employees, Harenza said.

Brennan said the percent return on the dollar for partners could often be a very misleading number because the fewer equity partners there are, the higher the return is for each of them. That isn't the case with Stevens & Lee, which has a much lower leverage than many Am Law 200 firms with about 0.62 non-equity attorneys to every equity partner. For all intents and purposes, non-equity partners and of counsel are counted as associates when calculating leverage.

Harenza said Stevens & Lee's model is different than several other firms when it comes to increasing revenue and profits. His firm, he said, focuses on upping revenue per lawyer and lowering expense per lawyer and then doles out the remaining profits to each attorney tier. Other firms, he said, take what revenue they have left and figure out which attorney fits into which tier.

Harenza said the firm would be able to put its PPP over $1 million if it moved to a 2-to-1 leverage, and up to $1.25 million at a 3-to-1 leverage. Brennan said there is validity to that argument because if the lower paid partners were made associates, the average of the higher paid equity partners would naturally increase.

"Many law firms 'manage' their profits per partner statistic by defining who is an equity partner," he said.

Unsophisticated readers of the Am Law 100, he said, could be easily deceived by that statistic.

A big part of why Stevens & Lee has been able to remain so profitable with low leverage traditionally had to do with its choice of locale. Based in Reading, the firm has offices in places like Pennsylvania's Lancaster, Scranton, Valley Forge and Wilkes-Barre. Harenza said location is no longer the only factor in cost containment.

In the last few years, the firm has opened offices in more expensive markets like Princeton, N.J., Philadelphia and New York City.

Harenza said the expense per attorney in 2003, before the Princeton and New York offices opened, was about $96,000. After the launch of the Princeton office, the cost went up to $101,000, and up even further to $120,000 once the New York office was opened, he said.

In order to combat those rising costs, Harenza said he continues to invest in technology to lower the need for support staff and continues to strive for higher-end work to increase revenue.

Harenza said the firm saves on expenses by centralizing its marketing and technology teams into one office as opposed to having a representative from each group in every office, as many large firms do.

He said large firms with offices all over the world are going to start moving in the direction of centralized support functions.

Stevens & Lee is spending money on technology training in order to reduce costs in the long run, and is working on the demographics of the firm. Harenza said the firm is seeing some of the more senior attorneys migrate out and has a need for first- and second-year associates and fifth- to eighth-year associates.

Harenza said he is trying to make every lawyer specialize in an industry segment and possibly in a sub-specialty with the hopes of commanding higher rates.

"My job is to get higher yield and rates from clients," he said.

Although the firm's geographic locations have been a draw for clients because of lower rates, Harenza wants to increase those rates through higher-end work, and says he has the room to do it. The firm's rates are currently substantially lower than those of Philadelphia and, particularly, New York firms, he said.

More than just looking to increase the rates he charges now, Harenza wants to handle specialty work that automatically commands higher fees and he thinks clients are willing to pay for that specialization.

Stevens & Lee works off a pyramid chart that breaks legal work into three sections: commodity work, experiential work and unique or specialized work. As clients have consolidated, the rates for everyday, commodity work have become more price-sensitive, Harenza said. That phenomenon has even pushed some of the more sophisticated experiential work into the commodity section of the pyramid, he said.

The ultimate goal for Stevens & Lee is to achieve as much of that 5 percent of the legal work that is at the top of the pyramid, he said.

"What I'm trying to do is move this entire business, business by business, up that curve," he said.

In 2005, Stevens & Lee saw a 12.7 percent increase in gross revenue over 2004's financial performance, a 9 percent increase in revenue per lawyer and an 8.3 percent increase in profits per equity partner.