Legal Pad

Is The Worst Over?

[Petra Pasternak]

Optimism is in the air.

The markets are up for the week, factories are stepping up their output, and earnings reports this week — including at Silicon Valley heavyweights like Google and Intel — have been strong. The Wall Street Journal even reports the tech sector is kicking into hiring mode as the economic recovery takes hold. 

And partner Mike Rhodes sounded cheerful — if still cautious — today about the outlook for the 300 lawyer litigation group he heads at Cooley. 

“In terms of hours, people are working a lot harder than a year ago,” he said over the telephone from San Francisco. Litigation hours are up about 10 percent nationwide, and even more — 15 percent — in the Bay Area, he estimated. 

Ex-Brocade CEO Greg Reyes Found Mostly Guilty in Backdating Retrial

[Pam Smith]

A federal jury in San Francisco just came back with a backdating verdict against former Brocade CEO Gregory Reyes: Guilty on nine counts (everything but one conspiracy count).

It was the second backdating trial against Reyes: After he was convicted of 10 felony counts in August 2007 for backdating employee stock options at San Jose-based Brocade, he was sentenced to 21 months in prison and given a $15 million fine. But then the Ninth Circuit U.S. Court of Appeals threw out the conviction last year, saying prosecutors had misled jurors with false assertions during closing arguments.

Cooley Godward Kronish Chairman Stephen Neal led Reyes' defense team this time around. During the first trial, that role had been filled by Skadden, Arps, Slate, Meagher & Flom partner Richard Marmaro.

Reporter Kate Moser's still at court, but tells us the defense is planning to file a motion for a new trial, and will appeal if that's denied. We'll have a full story on The Recorder's Web site later this afternoon.

Big-Deal Firms Hang On In Small-Deals Era (And Cooley Rallies)

The number of deals law firms have been working on is woefully down from the 2007 peak, a recent MergerMarket report (.pdf) shows.

But even though there’s half as much work, the big deals firms are hanging on to their market share. And some interesting news is that Cooley Godward is moving up in the rankings, despite the recent loss of star rainmakers.

Latham & Watkins, Jones Day, Cooley, and Wilson Sonsini Goodrich & Rosati lead the pack in the number of deals completed on the West Coast in 2009.

Cooley’s surge, and the deal landscape, after the jump

Cooley Lays Off 58 Staffers

For the second time this year, Cooley Godward Kronish is axing employees.

Fifty-eight staffers were cut today, although no attorneys were let go, according to an all-hands memo (.pdf) from Cooley COO Mark Pitchford.

“This reduction was conducted to eliminate pockets of staffing overcapacity throughout the firm,” wrote Pitchford.

The firm laid off 52 lawyers and 62 staff in January amidst the deluge of law firm layoffs.

Cooley has had a rough go of it lately, losing a string of partners, including some of its top M&A lawyers.

— Zusha Elinson

Cooley Loses Another Star to Dewey

After losing a trio of corporate stars and antitrust lawyer Jim Donato (see Cal Law's story), Cooley is also going to be losing well-regarded, up-and-coming M&A partner Jane Ross. Sources tell Legal Pad that Ross will be joining recently departed M&A stars Rick Climan and Keith Flaum at their new home at Dewey & LeBoeuf in East Palo Alto.

Climan and Flaum shook Valley legal circles earlier this month when they announced they would be leaving Cooley along with partner Eric Reifschneider for the New York firm’s struggling Valley outpost. Ross has often worked on deals with Climan and Flaum and has also run her own deals like RF Micro Devices’ $900 million acquisition of Sirenza Microdevices. Since Climan and Flaum left, speculation has been rampant about how much business and how many associates would end up following them to Dewey.

A Dewey spokesman declined to comment saying, “We can’t comment at the moment.” Ross didn’t return phone calls and a Cooley spokeswoman declined to comment.

— Zusha Elinson

Climan, Flaum, Reifschneider Quit Cooley for Dewey

Dewey, Dewey & Dewey: New rainmakers Rick Climan, Eric Reifschneider and Keith Flaum

In a lateral move that can only be compared to an earthquake rocking Silicon Valley’s legal world, the three men most synonymous with Cooley Godward’s formidable corporate practice — Richard Climan, Keith Flaum and Eric Reifschneider — are leaving for Dewey & LeBoeuf.

Leading M&A lawyers Climan and Flaum are rainmakers and longtime leaders at Cooley. Reifschneder was the head of Cooley’s tech transactions group.

The move shocked lawyers and recruiters throughout the state.

Reaction, and Rick Climan, after the jump.

Venture Law Group Founder Pursues Rights to VLG Name

Among the Heller rubble lies a remnant of glory days gone by, the Venture Law Group, and for at least one lawyer, it hasn’t lost all its luster.

A 2001 file photo of Elias Blawie in VLG’s glory days. (Confidential to E.B.: Call us! Thx!)

Elias Blawie, who co-founded the once-famed IPO giant with Craig Johnson (updated to note: and four other attorneys) in 1993, is slated to buy the VLG service marks registered in the United States and Europe, its acorn design and over a dozen associated Web sites from the Heller estate, all for $5,500. The sale will finalize this Friday, unless anyone objects through the court.

And to ward off the VLG haters, he’s also scooping up VentureLawGroupsucks.com, .net and .org too.

VLG flew to fame in the dot-com era by hooking up high-tech startups with venture capital, then taking a 1 percent cut of equity. Among its earliest babies were HotMail, Yahoo and WebTV.

But the business model didn’t hold up to the bust and in fall 2003, it merged with Heller Ehrman White & McAuliffe, at that time considered a great match between two highly prestigious firms. But as we all know, Heller didn’t make it, either. It filed for bankruptcy in December, three months after announcing its dissolution.

The largest group of VLG partners moved to Cooley in early October, a week after the dissolution vote. At the time, it was said that the separate branding wouldn’t be compatible with Cooley’s culture. Blawie is among that group, but he didn’t return calls for comment, so we don’t know if he has any grand plans to resurrect the name, or if he’s just going to file it away among his keepsakes of the good old days.

Carl Baier, Silicon Valley recruiter and former lawyer for Wilson Sonsini, from which VLG first defected, said that while VLG's heyday has definitely come and gone, the websites might be useful to steer leads or clients Blawie's way.

“The brand in the abstract is only as useful as the lawyers who are working at it at the time,” Baier said.

Updated: We heard back from Johnson on Wednesday morning. Johnson has been busy with his new Web-based firm, Virtual Law Partners, that launched last year. Its 35 attorneys all work from home where, it seems from the website, they all enjoy life, with pics of mothers baking and partners cuddling with dogs.

Johnson said he’s delighted Blawie is purchasing the rights. It makes sense, given the effort that all VLG partners spent building the name, not to “let it disappear into the sands of time.”

“I’d love to see some productive use to the brand and the name in the future, but I don’t think that’s the plan,” Johnson said.

— Amanda Royal
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Cooley Staffer Goes Out in Handcuffs

Cooley Godward Kronish got a rare visit from the cops on Friday.

Mountain View police descended on Cooley’s cafeteria in Palo Alto to arrest one of its chefs for allegedly molesting young girls. The Mountain View Voice sums it up as follows:

Mountain View police arrested a local community leader and coach — one who helped run a police soccer camp for at-risk boys — this week on charges of child molestation for crimes he allegedly committed against female family members.

Pedro Carbajal, 33, is charged with three counts of lewd and lascivious acts with children under age 14 and one count of aggravated sexual abuse of a child. Police took Carbajal into custody on Friday, Feb. 27, after receiving a tip earlier this month from a confidante of one of the victims. They arrested him without incident at Cooley Godward Kronish LLP law firm in Palo Alto, where Carbajal works as a chef.

Update for clarification: Carbajal is/was not an employee of Cooley itself. The firm's cafe is operated by food services company Guckenheimer, and the arrested man is/was employed by them.

— Zusha Elinson

Out of the Heller Frying Pan, Into Cooley's Layoff Fire ...

So you think it’s bad that either your law firm collapsed or that you got laid off? In the past four months, Silicon Valley corporate lawyer Inna Efimchik experienced both. She was at Heller Ehrman when the firm dissolved in September. Luckily, the fourth year associate landed with most of the rest of Heller’s Venture Law Group at Cooley Godward Kronish in October. But 3 ½ months later, she was among the 52 lawyers laid off by Cooley. Efimchik spoke with us at length about her experience and you can read about in our Going Public column over at Cal Law.

BETWEEN JOBS An occasional look at how job hunting legal professionals cope with a crisis economy.

Efimchik, who’s now on the rather difficult hunt for a job, told us she had a series of feelings, probably familiar to many, after getting laid off.

“Initially, it’s sort of a shock because I didn’t see it happening,” she told us. Then: “At first it was like ‘I’ll get a nice break and do all the things I’ve wanted to do,’ but as it started sinking in and I started looking at the job market, I started to feel a little different.”

With hundreds of out of work associates and few job openings for corporate associates, Efimchik noted the reversal of just a few years ago when law firms were tripping over themselves to hire young corporate lawyers. How the times have changed.

Previously: Job Hunting — How to Change Your Specialty

— Zusha Elinson

Cooley Lays Off 52 lawyers, 62 Staff

UPDATE: We just got the Cooley layoff memo: 52 lawyers and 62 staff got axed. Here's what the all-hands memo from CEO Joe Conroy says:

"Today, Cooley is implementing a firmwide reduction in force of 52 attorneys and 62 staff personnel.I can assure you that the decision to undertake this reduction was not made lightly and that we are providing a comprehensive severance benefits as well as career counseling services.

Given the continued slowdown we have experienced in pockets of the Firm over the last five months and the forecast for continuing global economic turmoil in 2009, the Executive and Management Committees concluded that a reduction is necessary at this time."

To read the whole memo, click here: pdf.

Interesting that Cooley should be so quick to layoff lawyers. The firm reported relatively strong financials for 2008 (Check 'em out here.) Now, they join locals Orrick and Gunderson and many other firms across the country in the layoff craze. All eyes are now on MoFo and Wilson Sonsini.

— Zusha Elinson