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CHICAGO-On the verge of closing three years ago, Hal Riney & Partners' office here is not only surviving, but thriving.

Resurrected in late 1990 as Hal Riney & Partners Heartland, what then was a marginal $22 million shop has mushroomed into an agency with $134 million in billings for '93. Senior VP-Managing Director Barry Krause estimates billings of $150 million when the year is over.

Starting with the Subway Sandwich & Salad Shops business that it created out of virtually nothing, the agency has assembled an impressive list of clients, including the creative work for Bally's Health & Tennis Corp. won in February from Suissa/Miller, Santa Monica, Calif.

"When we started out, we asked ourselves what was missing in Chicago agencies," said Mr. Krause, who joined Riney after nearly 15 years in account management at Leo Burnett USA. "For a long time, from my Burnett perspective, it tended to look like a two-agency town: There was Burnett's marketing machine and DDB Needham's creative firepower. But Needham had gone through a lot of tough changes, and there seemed to be an opening for a different kind of creative agency in town."

Realizing they couldn't compete with the resources of a Burnett or DDB Needham Worldwide, Mr. Krause and Executive Creative Director Jonathan Harries have assembled a group of what they call "uniquely talented people" and have used the staff talents to guide them to accounts.

For instance, Mr. Krause was eager to use his years of supervising McDonald's Corp. business and asked McD's Chief Marketing Officer Paul Schrage how best to use that knowledge. The sage's advice: Find the national chain that needs your help the most.

That turned out to be Subway, then a negligible advertiser with a $2 million budget, handled by Beber Silverstein & Partners, Miami. Riney won the account in 1991 and has sold network TV image and promotion campaigns to the Subway franchisee board that have boosted the budget to an estimated $30 million to $35 million this year.

In another example, a group of Riney staffers who had followed the legendary career of food entrepreneur Jeno Paulucci sent him a letter last year after reading that his new Michelina's brand was growing into a force in the freezer case, then handled by Pedone & Partners, New York. Mr. Paulucci hired the agency to create the first national TV commercials for the brand.

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