Legal Pad

9th Circuit to McKool: Speak Up or Forgo Your Settlement

[Scott Graham]

Last month, McKool Smith settled a malpractice claim brought against it by former NFL football players and asked the Ninth Circuit to remand the players' appeal to district court.

There's just one problem: McKool is joined at the hip with Manatt Phelps & Phillips in the appeal, which was argued a few months ago. On Monday, the appellate court issued a brief order saying it could not dismiss the part of the appeal dealing with McKool while retaining the part with Manatt, which hasn't settled.

"We have jurisdiction to review final judgments and, absent a Rule 54(b) severance, no appeal of the district court’s judgment may be taken by one party while the district court is busy working on another party’s case," states the order, filed by Chief Judge Alex Kozinski and Judges N. Randy Smith and Morgan Christen.

Nonetheless, the judges added, sounding just slightly spurned, "if plaintiffs and McKool prefer to be
bound by their settlement rather than our decision regarding the merits of the appeal, we could decide only the claims against Manatt and remand the case so that the district court can effectuate the settlement between McKool and plaintiffs.

"We will enter such a split disposition only if unequivocally requested by plaintiffs and
McKool before we render our decision," the judges added.

They gave McKool one week to make such a request and one more week for the plaintiffs to file any opposition.

L.A. the Place for Law Firm Mergers in Q3

[Petra Pasternak]

Law firm mergers are back in vogue, if smaller, with California losing little of its appeal as a destination market, according to the latest report by Boston consulting outfit Altman Weil.

No fewer than 14 law firm mergers and acquisitions were announced across the nation in the third quarter of 2011, Altman Weil MergerLine said Monday. Total 2011 combinations is 43, up 79 percent compared to the same nine-month period in 2010.

The desire to expand into new regions continued to be a driver, with Los Angeles a target for three firms. In September, Dallas-based litigation firm McKool Smith announced its acquisition of 35-lawyer Los Angeles firm Hennigan Dorman. In August, Philadelphia’s Fox Rothschild announced it was scooping up the three-attorney Chan Law Group, and in July, Kansas City-based Polsinelli Shugart picked up six-attorney Quateman. 

The largest law firm combination announced in the third quarter was 500-lawyer, Boston-based Edwards Angell Palmer & Dodge’s acquisition of Wildman Harrold Allen & Dixon, a 160-lawyer Chicago firm.

Altman Weil principal Ward Bower said he’s seeing a shift in motivation from survival mode to strategic mode this year. Some of the 2006-2008 merger mania was fueled by a “me-too” mentality, with some firms merging because others were doing it. That trend led to a dip in the number of mergers in 2009 and 2010, he said. “Nobody had confidence to try to do deals,” Bower said. “We’re seeing a release of pent up demand.”

The increase in smaller firms folding into bigger firms isn’t necessarily a sign of desperation, Bower noted. Especially in markets that have seen an invasion from big out-of-town firms, some smaller firms have done their long-term analysis and concluded their prospects might be better inside a bigger firm, he said. In Los Angeles, many firms depended heavily on the real estate market, he said, which hasn’t come back. Midsize and smaller firms in Northern California appear to be healthier.

IP Litigator David Kleinfeld to Lead Goodwin in San Diego

[Petra Pasternak]

With its San Diego office leader heading to academia, Goodwin Procter has tapped former Heller Ehrman partner David Kleinfeld to take over as office chairman.

Partner Stephen Ferruolo, also a former Heller lawyer who had led the Goodwin office since it opened in 2007, will become dean of the University of San Diego School of Law starting in August.

Kleinfeld, an IP litigator who joined Goodwin nine months ago from Foley & Lardner, said he got the call from Goodwin Chairwoman Regina Pisa during an eight-day client visit to Taiwan, Japan and China.

“That’s how I found out about the firm’s desire that I take the position,” said Kleinfeld, who was still jet-lagged this afternoon from his trip. “I told Regina that I’d be happy to help in any way I could.”

Goodwin’s 15-lawyer office has been handling corporate and litigation work for Qualcomm, Kyocera, Nokia, KTC and other clients, Kleinfeld said. The plan is to build on those areas, particularly in electrical engineering and life sciences, and in patent prosecution, he said.

Winston, Howrey One Step Nearer to Deal

[Petra Pasternak]

A big weekend is looming in the Howrey-Winston saga.

This week, Winston management agreed on a proposed term sheet for bringing aboard Howrey attorneys, sources close to the situation confirmed. Enough Howrey partners have indicated interest in joining for the deal to move one step closer to completion, lawyers said. Winston held a partner meeting today to discuss the terms ahead of a partnership vote, which was expected to begin as early as today and possibly last through the weekend.

Former Howrey lawyers say that Winston is likely to get most of the Houston office and parts of the antitrust group in D.C. The exact fate of the California offices remains more vague, but a former Howrey lawyer in California said prospective tenants have toured the San Francisco office and that there’s been interest in the Palo Alto office as well.

The next few days appear to be crucial for the deal. One issue that’s in play is the matter of the prestigious Howrey name. A former Howrey lawyer in California said Winston might pay $2 million or more for the Howrey moniker. The goal had been to name the new firm Winston Howrey, the lawyer said.

It’s not clear how soon the name issue will be resolved or whether it’s still part of the deal. One former Howrey partner said that in certain jurisdictions, a law firm may only use the business name of someone who’s deceased (Jack Howrey in this case) if he is a legacy partner of the firm, or his firm was acquired via a formal merger.

“I know it had been discussed that the Howrey name would be used going forward with the Winston name,” the lawyer said, adding that this was the first time he’d heard a value placed on it – and that the price tag seemed way too low. “I actually think the Howrey name is worth more like $20 million in terms of client recognition and good will.”

Howrey is also trying to capitalize on its in-house team of economic analysts who study the viability of IP, antitrust and complext litigation cases. The firm’s management has tried to sell the CapAnalysis capability for about $6 million, another former Howrey lawyer said.

Time to Second Guess the U.S. News Rankings

[Greg Mitchell]

So U.S. News released its law firm rankings today. They've put firms into tiers by practice area, and also by region. So you can be a Tier 1 firm nationally in Intellectual Property Law, as Irell & Manella is, but have your Orange County IP practice listed in Tier 2, as Irell does.

Digging through the data on firms with signficant California practices, a few things jumped out:

None of Quinn Emanuel's practices -- not even general commercial lit.! -- landed in Tier 1 nationally. By way of contrast: MoFo has 10 national Tier 1 practices; Latham, Gibson and Morgan Lewis each have 9; Orrick has 5; OMM, Paul Hastings, Cooley, Pillsbury and DLA each have 4. Wilson Sonsini has two -- private equity and venture capital.

There are 24 firms with a Tier 1 national ranking in IP law, including Sheppard Mullin and L.A.'s Sheldon Mak & Anderson. Not cracking Tier 1 were Valley IP heavyweights Orrick and Fenwick. Fenwick, in fact, has no Tier 1 practices.

But hey, that's better than ailing patent shop Townsend and Townsend and Crew: U.S. News has apparently never heard of them.  

 

Imported Firms Beware: California Has It Covered

[Petra Pasternak]

Some of Washington’s biggest and best-known firms have arrived in California (sub. req.), but local lawyers interviewed for The Recorder’s story aren't trembling in their Ferragamos (or their Guccis, as the case may be).

For one thing, some indigenous firms boast decent-sized D.C. offices. Pillsbury Winthrop's, for instance, specializes in several industries, including energy, healthcare and international trade. Chairman Jim Rishwain said the D.C. office, with 172 attorneys, has been his firm's biggest since 2005.

Many of its lawyers serve California clients. One example: D.C. public policy partner Elizabeth Moeller is advising Stanislaw County in getting more funding for water projects through the U.S. Bureau of Reclamation. Another: the firm's energy and environmental teams - in DC and firm-wide - regularly advise California energy and utility clients seeking regulatory approval from FERC, the Nuclear Energy Commission, the EPA and other federal agencies.

Another thing: California firms have grown up with the state's industries.

“California has unique industries with unique needs – from Hollywood and Napa Valley to Silicon Valley and San Diego's biotech boom,” Rishwain said in an email. “It will be a challenge for newcomers to compete against the size, experience and cultural advantages of homegrown firms like Pillsbury have.”

Dibs on kilpatricktownsend.com

[Zusha Elinson]

Hey, remember that Townsend and Townsend and Crew is in merger talks with Kilpatrick Stockton? Oh, look, someone went and paid $10.69 to register www.kilpatricktownsend.com on Friday.

The Godaddy registration info doesn’t say who did the deed. But Townsend spokesman Brian Colucci said it wasn’t him –- and he didn’t know about it. Calls to Kilpatrick higher-ups in the fairly early evening Georgia time were not returned. (Better get used to not hearing back from Atlanta until the next morning, Townsend partners.) And calls to consultants at Hildebrandt, which has been working with Townsend, went unanswered as well. Rank-and-file Townsendites haven’t heard one way or the other on the merger rumors.

If you think domain name grabs aren’t a sign that a merger is in the works, then check this out. But then again, whoever signed up for kilpatricktownsend.com only did so for one year. It could be the work of an eagle-eyed, legal-blog-reading, merger-rumor-spotting domain name entrepreneur.

If you were the one who registered this domain, or you know who did, email me (at [email protected]).

May 11 merger watch update: Townsend and Kilpatrick are still in talks about a possible merger, although a deal isn't expected immediately, a source familiar with the talks told me.

New Bryan Cave Managing Partner a Family Man from St. Louis

[Petra Pasternak]

Attorney Lee Marshall is trying to balance work with family across the Continental Divide. The good thing, he says, is that it’s temporary. The Bryan Cave partner moved to the Bay Area from St. Louis a few weeks ago to take over as managing partner of the firm’s San Francisco office.

The prior office managing partner, Lynn McCreary, took a post in-house with client Fiserv.

Marshall, who’d lived in St. Louis for the past 10 years, said his two daughters (ages 7 ½ and nearly 10) and his wife would be joining him as soon as school’s out this summer.

Two Different Beasts Rumored to Be Courting Townsend

[Zusha Elinson]

UPDATE 5/5: Our colleagues in New York were able to get through to Fitzpatrick Cella managing partner Colleen Tracy. She said the rumors that her firm is in discussions with Townsend are "not true" and said the firm has "never" been in discussions with them.

After ATL reported that Townsend and Townsend and Crew was in talks with Atlanta’s Kilpatrick & Stockton this morning, I did a little calling around to find out what’s going on at the ‘not denying that it’s looking for a merger’ patent boutique.

Sources familiar with the firm said that Townsend has indeed been in talks with Kilpatrick. They also mentioned another name: Fitzpatrick Cella, Harper & Scinto — a New York IP boutique.

Loeb & Loeb Still Profitable, Expanding

[Petra Pasternak]

Loeb & Loeb, a midsize Los Angeles-based firm, didn’t make The Recorder 25 list (sub. req.) — its California head count fell short of the paper’s criteria.

But its financials for 2009 are still worth noting. (Preliminary financials, we should note — Recorder affiliate The American Lawyer just published financials from the country’s 100 highest-grossing firms, but financials for firms 101-200 will come out in the magazine’s June 2010 issue.)

Loeb & Loeb’s equity partners took home almost $1.5 million, up about 1 percent compared to the prior year. That’s despite a hit to transactional work, which is a bigger piece of the firm’s practice than litigation. John Frankenheimer, the firm’s L.A.-based co-chairman, said 2009 marked the 11th straight year of increased profitability. Loeb laid off four corporate lawyers last year.