SAN FRANCISCO - Quateman LLP, California's biggest women-owned municipal bond counsel firm, is turning 20 this year and still growing its slice of the marketplace - long after most governments in the state stopped giving any preference to women-owned businesses.

"Governments and companies want a vendor base that matches their constituency," said Lisa Greer Quateman, the firm's founder. "Most importantly in the public finance arena, they value the additional sets of eyes and they realize that it is in their interest to promote new firms and new faces in the business, so that they will have a large enough pool of competing firms from which to choose."

Quateman, who spent the first part of her career as a securities and real estate lawyer at big national and international companies, started her own firm in 1989 without much thought of being a women-owned business. But as she tried to build the business, she found that governments with diversity programs were more open to hiring an upstart women-owned firm than private-sector securities clients.

Kathleen Brown, now a managing director at Goldman, Sachs & Co. in Los Angeles, helped give Quateman a start in the muni business when she pushed to include women- and minority-owned businesses among the state's financing teams during her tenure as California treasurer from 1991 to 1995.

Quateman started in the muni bond business as a co-underwriters' counsel on deals led by Orrick Herrington & Sutcliffe LLP, which dominates the public finance business in California. Acceptance into the state bond counsel pool and time spent toiling as a co-counsel opened the door to many more clients for her Los Angeles-based firm.

From 1989 to 2008, Quateman served as bond counsel on $11.6 billion of bonds, according to Thomson Reuters data, with the bulk of that taking place in the past five years. Since 2004, the firm has been bond counsel on $10 billion of bonds, about 85% of its total in the past two decades, according to Thomson. That made it the top ranked women-owned firm in California over the past five years and the seventh ranked firm overall in the state. Quateman also served as underwriters' counsel on $3.2 billion of bonds.

The firm remains a part of the state's pool of bond counsel. It has also worked deals as bond counsel, underwriters' counsel, or disclosure counsel for many major municipal issuers across the state, including Los Angeles, San Diego, and San Francisco.

The firm's biggest single issue as bond counsel was a $768 million tax and revenue anticipation note for Los Angeles in 2006. Its toughest assignment was a much smaller 2006 deal for Gardena. Quateman was bond counsel and disclosure counsel for the city when it sold $25 million of certificates of participation that got it back into the market after a brush with insolvency.

The firm continued to grow even after California voters amended the state constitution to prohibit public institutions from considering race, sex, or ethnicity in contracting or employment when they passed Ward Connerly's Proposition 209 in 1996. A series of U.S. Supreme Court cases in the late 1990s also severely restricted the ability of governments to promote women- and minority-owned businesses by requiring "strict scrutiny" of government affirmative action policies.

"Initially, she was hired because we were attempting to meet some [diversity] goals," said James Preusch, chief financial officer of the Alameda Corridor Transportation Authority in Los Angeles County and former chief financial officer for the Port of Los Angeles, where he first hired Quateman. "But the fact of the matter is that this firm has the ability to carry its weight regardless of that status and far more so now than ever before."

Quateman has grown from a one-woman shop to a firm that includes a dozen lawyers with major focuses in municipal finance, complex real estate workouts, and corporate finance as its business has grown.

While Lisa Quateman continues to work actively in all the firm's practice areas, she has added lawyers to specialize in public finance, including Timothy Reimers, whom Quateman calls her "right-hand man" in the public finance practice. The firm employs many men, but remains majority women-owned and is likely to stay that way for the foreseeable future, given its current cast of partners.

"I'd characterize the firm as top-notch," Preusch said, adding that it delivers "quality work on time, without the Madison Avenue pricing."

Quateman said she would like to continue to grow the firm and is considering adding another lawyer this year. But growth doesn't just mean climbing the league tables. It means getting tougher assignments and being taken seriously enough that new clients don't always think of Quateman as the women-owned firm that's nice to have as a co-counsel.

"In a lot of ways, we've transcended only being a women-owned business and getting the smaller pieces of deals," she said. "In our own right now, we are bond counsel, disclosure counsel, underwriters' counsel on pretty significant deals."

Quateman said her firm has done extraordinarily complex work over the years, both inside and outside of its muni practice.

One of her first big breaks was when the Federal Deposit Insurance Corp. and Resolution Trust Corp. sought to include women in its vendor pool back in the early 1990s during the savings and loan crisis. But she said the quality of the firm's work helping the FDIC and RTC negotiating hundreds of complicated restructurings and workouts during the nation's last big real-estate bust helped convince the FDIC to hire the firm again last year, when the credit crunch and housing market implosion brought down IndyMac Bank and Washington Mutual.

While she doesn't want her firm to get pigeon-holed as just a women-owned law firm, Quateman doesn't dismiss the importance of the diversity programs that gave her firm a chance to prove itself.

"Gender, per se, should not necessarily be an issue, but if we are honest with ourselves we have to admit that the top ranks in both law and business still do not reflect the percentage of women who are eligible and qualified," she said. She praised political leaders like New York Gov. David Paterson for finding legal ways to continue to expand the diversity of government supplier networks.

"Leveling the playing field still matters," Quateman said. "Case in point: About 42% of my graduating class from UCLA School of Law was female, yet today the percentage of female law firm partners and managers is well under half of that."

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