Legal Pad

Technology Revolution a Challenge Even for Larry Sonsini

[Scott Graham]

The lawyer most responsible for developing Silicon Valley's culture of entrepreneurship is feeling the pressure of disruptive change.

Speaking to Santa Clara University law students this week, Wilson Sonsini Goodrich & Rosati chairman Larry Sonsini described a legal profession under siege by an information revolution, globalization, alternative fee requests and commoditization of various practices.   

“There is no place to hide in the profession because you’re on the firing line every day,” he said at a panel on lawyer leadership. Appearing with him were California Supreme Court Justice Carol Corrigan, Santa Clara County Deputy District Attorney Jeff Rosen and Sixth District Court of Appeal Justice Patricia Bamattre-Manoukian.

All four emphasized they see a bright future for the profession. But the panelists, especially Sonsini, also sounded cautious, sometimes even wistful notes about the enormous challenges facing lawyers today.

“Technology has changed the game,” said the lawyer who helped nurture Apple, Google and numerous other game-changing companies. With greater access to information, clients expect faster answers at lower rates. At the same time, law firms have to negotiate globalization “without losing your momentum” and the commoditization of lower-end work.

“All of that has put a lot of pressure on the practice,” Sonisini said, from graduates seeking jobs, to senior associates trying to make partner, to established partners who must “stay on top of the game.”

When it comes to their own new hires, Wilson is looking for people who already have a personal strategic plan. “Now that sounds like a terrible thing for a person just getting out of law school,” Sonsini said, but it helps demonstrate vision, skill set and -- theme of the night -- ability to thrive under pressure.

Sonsini acknowledged it took him a little while to develop his own strategic plan. He’d expected to study medicine before opting for law school at the last minute.

“How’d that work out for you?” Rosen quipped.

The April 17 panel was organized by SCU adjunct law professor Bob Cullen.

Akin Gump refusing to give up on private equity work

[Petra Pasternak]

Call them gluttons for punishment. Akin Gump Strauss Hauer & Feld’s appetite for private equity work hasn’t tapered off even after a brutal couple of years.

The firm’s total private equity deal value dropped from about $10 billion in 2010 to $8 billion  last year, even as the number of deals rose, according to L.A. partner C.N. Franklin Reddick III, who co-chairs the firm’s corporate group. Despite that, Akin Gump is investing in the practice with the idea that better days are coming.

“We are looking to build in private equity M&A to achieve long-term strategic goals so the near-term outlook is not driving our decision,” Reddick said. “We have a very strong funds practice in New York and we represent a wide variety of private equity firms.” The firm would like to replicate that on the West coast by adding partners with books of business across California, he said.

Akin Gump and other firms lining up for a share of the private equity fund market aren’t all crazy. The bigger private equity deals—those worth more than $1 billion—seem to be coming back, accounting for a little more than half of all capital invested in 2011, according to my new favorite friends at Seattle-based research firm PitchBook (they respond fast to my frazzled requests on precarious deadlines).

Capital investment into business and consumer services companies rose last year, and funds have been shifting more money into the IT, health care and energy sectors.

And as I reported Monday, private equity firms are sitting pretty on about $425 billion in “dry powder”—capital ammunition that hasn’t yet been invested—of which $100 billion is nearing the end of its investment horizon. That means the firms have to find a place to park the money.

While many New York and Silicon Valley firms train their sights on California’s high-tech and life sciences sectors, Akin Gump is pinning its hopes on its specialty in the clean-tech, renewable energy and media and entertainment practices.

Last year, Akin Gump represented Cerberus Capital Management in its $1.5 billion acquisition of DynCorp International Inc. and handled transactions for New York private equity firms Angelo Gordon & Company, RNK Capital and Halyard Capital, among others.

“We seek to expand our private equity representation on the West coast in order to better serve our existing clients and expand our practice, leveraging our strengths in our fund formation, cross-border transactions, tax and public policy practices, which currently are centered in our other markets,” Reddick said.

RPX Announces Its IPO Terms

[Amy Miller]

RPX Corp., which acquires and licenses patents to help clients reduce the risk of patent litigation, announced terms for its initial public offering Monday.

The San Francisco-based company said it plans to raise $124 million by offering 7.3 million shares at a price range of $16 to $18.

Founded in 2008, RPX booked $95 million in sales last year and plans to list on the NASDAQ under the symbol RPXC.

The company registered with the Securities and Exchange Commission for an IPO on Jan. 21, saying it planned to raise as much as $100 million but offering no specific pricing information.

Redwood City law firm Gunderson Dettmer Stough Villeneuve Franklin & Hachigian is advising RPX Corp. Name partner Robert Gunderson Jr. leads the team, along with partners Bennett Yee and Elizabeth Webb and associates Gregory Volkmar and Yush Lee .

Gibson, Dunn & Crutcher is representing the underwriters, Goldman Sachs & Co. and Barclays Capital. That team includes San Francisco partners Douglas Smith and Stewart McDowell, Palo Alto partners David Kennedy and Stephen Fackler, and San Francisco associates Sean Sullivan and Michael Dell.

RPX General Counsel Marty Roberts is also working on the deal.

T.G.I.F. Application Season Again

[Petra Pasternak]

A cool billion dollars in federal funds is up for grabs in the biotech field, and that may mean another round of legal work on applications.

The money was authorized as part of the health care reform law passed in March. It targets biotech companies –- particularly those with a therapeutic and diagnostic emphasis –- that have fewer than 250 employees. Since health reform passed, clients have been calling Cooley asking for help with the application process, said Glen Sato, a partner in the firm’s Palo Alto office.

“Since that point, people have realized this is money that’s coming fairly quickly and is probably going to be parceled out on a short timeframe,” said Sato (pictured at left). He and special counsel Fred Dorey said that getting the application right the first time will be key. That’s because, based on the firm's experience with last year’s government program for companies in clean energy technologies, the competition will be steep. “We know a number of energy applications for tax credits and grants were disqualified because of simple non-compliance,” Dorey said. Added Sato: “If there are well in excess of 1,000 applications for the funds nationwide, the government will have a higher probability of disqualifying you” early for noncompliance. 

The Treasury Department is expected to post guidelines for the "therapeutic discovery project" tomorrow. Only then will Dorey and Sato be able to say whether this latest government handout translates into more business for lawyers like them. “We’re a little bit hesitant to gear up for this without actual implementation guidance,” Dorey said. “Friday we’ll see the final regulations and at that point we’ll be assessing the extent and scope of work for us and other firms.”

Judge's Single Sentence on EFF's Fred von Lohmann Causes a Stir

[Pam Smith]

CNET has a thought-provoking story -- you can tell because it's got one of those question-mark headlines -- about the head scratching and hand wringing prompted by this sentence in a recent decision by New York federal Judge Kimba Wood:

"[LimeWire founder Mark] Gorton states that another attorney, [von Lohmann], gave [LimeWire], including [former company CTO Greg] Bildson, confidential legal advice regarding the need to establish a document retention program to purge incriminating information about LimeWire users' activities," Wood wrote in her decision.

CNET says this all went down in the granting of summary judgment to the Recording Industry Association of America, in its long-running copyright fight against file-sharing service LimeWire. According to CNET, the ruling was 59 pages and ...

"Wood doesn't offer any further explanation or mention von Lohmann elsewhere in her decision. It's hard to say what she meant exactly. But to critics of EFF and von Lohmann, who come mostly from the pro-copyright camp, Wood's description of his advice confirms what they've suspected for years. They say von Lohmann has long provided tutorials to file-sharing services on how to break the law and get away with it."

But Fred von Lohmann denied any wrongdoing, CNET reports. And EFF wants the decision tweaked to get off his back, already.

"Providing advice to clients about document retention is something lawyers do all the time," von Lohmann said. "In discovery, there are a lot of documents, and clients need to understand what obligations they have about keeping documents and not keeping them based on what the law requires. That's a conversation lawyers have with clients who fear litigation is a possibility. I don't see anything particularly nefarious about this kind of a conversation with a potential client."

On Tuesday, Cindy Cohn, EFF's legal director, sent a request to Judge Wood asking her to modify her written decision in regards to von Lohmann. "We believe the materials in the record do not support the inclusion of the phrase 'to purge incriminating information,'" Cohn wrote. "As you may imagine, Mr. von Lohmann and EFF are concerned that his professional reputation has been put at risk."

We'll see what Judge Wood is willing to do when you ask nicely.

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.

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.

Facebook's Chris Kelly Readies for Screen Shot

[Cheryl Miller]

Expect to see Chris Kelly’s face on television soon: The Democratic attorney general candidate wrote his campaign a $4 million personal check on Tuesday. That brings the Facebook executive’s total out-of-pocket contributions to $8 million.

A statement on Kelly’s campaign Web site said the donation is proof he’s “continuing to run an aggressive campaign to communicate with California’s voters.” That might be an understatement, except that GOP gubernatorial candidates Meg Whitman and Steve Poizner have made that level of personal pocket-dipping look like chump change.

For weeks, Kelly has been hammering fellow candidate Kamala Harris with press releases decrying San Francisco’s crime stats and crime lab woes. Look for that message to transition to the airwaves shortly.

Leahy Touts Virtues Of Unpopular Patent Reform Bill

[Zusha Elinson]

Every week, I get a logic-defying press release from the Sen. Patrick Leahy about how the patent reform bill is going to do everything but give a puppy to every sad kid in America.

Last week, it was something about how labor unions love the new patent reform bill.

Really? Is making sure judges are stricter about what damages testimony is admissible going raise the minimum wage?

There is a tiny bit of a back-story, which is that labor initially opposed the patent reform bill a few years back, for reasons that are still unclear. And now they’re behind it.

This week, Leahy sent me a release to say that the patent reform bill has been getting a lot of support. Oh look, he has laudatory quotes from companies like ExxonMobile, Monsanto, Bose, Dow Chemical, University of California, and of course “35 businesses from New Jersey.” Noticeably absent is any support from Silicon Valley’s big tech companies like Google, Apple and Cisco, who are all pissed about how the Senate version of the bill came out (free reg. req.).

But who cares if Steve Jobs likes the bill when you’ve got more than 30 businesses from New Jersey on your side? Right?

The Secret Lives of Famous IP Lawyers

[Zusha Elinson]

Did you know that the head of Fish & Richardson's litigation practice could've been a pro volleyball player?

Thanks to Karineh Khachatourian, one of the organizers of today's IP Counsel Cafe conference in Palo Alto, we now have a bunch of little known facts about prominent patent lawyers. Khachatourian — whose claim to fame besides being an IP litigator at K&L Gates is that she appeared on the Phil Donahue Show — offered a little nugget for each patent lawyer on the contentious panel on damages.

Kathi Lutton, head of litigation at national IP law firm Fish: NCAA volleyball star who could've gone pro and former rocket scientist.

Taraneh Maghame, former Tessera IP lawyer and patent reform talking head: likes to skydive.

Brian Napper, expert IP witness for FTI Consulting: played tennis against former World No. 1 Tracy Austin... and lost 6-1.

Chris Marchese, IP partner at Fish: climbed El Capitan, camping on the side of the rock for five nights.

T. Rao Coca, IP lawyer at Nvidia: plays tennis. Hey, not everyone's life is that exciting.