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Howrey to Aquire Day Casebeer, Sources Say
The Recorder
June 22, 2009
Image: Stock Illustration RF
Day Casebeer Madrid & Batchelder -- the high-end intellectual property boutique that was rattled by the Qualcomm discovery disaster -- is in advanced talks to be acquired by national firm Howrey with a deal likely to close soon, according to sources familiar with the situation.
Both firms are known for IP litigation. Howrey, with 750 lawyers, would beef up its already sizable Northern California practice with the addition of the 27-lawyer Cupertino firm.
The deal would end the 11-year run that Day Casebeer had as a small, independent IP firm working big cases for marquee clients like Sun Microsystems Inc. and Amgen Inc. It was founded in July 1998 when Lloyd "Rusty" Day Jr. -- the driving force behind the firm -- and four other partners split from what is now Cooley Godward Kronish.
Over the last two years, lawyers from the firm have been under scrutiny for a discovery scandal in a patent fight between client Qualcomm Inc. and Broadcom Corp. Five Day Casebeer lawyers -- as well as one from Heller Ehrman -- were sanctioned in January 2008, after Qualcomm failed to turn over crucial documents in discovery. Although the order has been vacated until the lawyers get to tell their side of the story, the final outcome is still uncertain.
The firm got a crush of negative publicity -- and observers say the merger would help them shake the bad press.
"It's a very successful firm, but I think it's unfair that their name became associated with the whole situation at Qualcomm," said Carl Baier, a legal recruiter who is not involved with the deal. "Whatever your opinion of the situation at Qualcomm, it allows them to gracefully move on."
Inside Day Casebeer, the firm has been trying to move on. Four of the five lawyers who were sanctioned have left the firm. Although it lost Qualcomm as a client, it continued to handle IP cases for old-standby clients like Amgen, SAP and Symantec Corp. The firm has shrunk from more than 40 lawyers to not quite 30, the result of departures and layoffs.
Observers say a merger with Howrey would make sense since both firms only do litigation -- and they share clients like Amgen and Sun. Washington, D.C.-based Howrey has expanded aggressively in Northern California over the past few years. Last fall, it added 40 construction litigators from the collapsing law firm Thelen. The addition of the Day Casebeer attorneys would give the firm about 115 lawyers in San Francisco and Palo Alto.
"I think Howrey's really lucky -- it's an excellent firm," said Avis Caravello, a legal recruiter not involved in the deal. "I think it's great for Day Casebeer to have that national reach."
Although the firm's leader, Day, is fiercely independent, his firm has been shopping itself around in recent years, according to people familiar with the situation.
Even during Day Casebeer's heyday, observers wondered whether the firm would be able to become a second-generation firm. Day was always a strong and charismatic leader -- and 11 years later he is still the managing partner.
Day didn't return a phone call and an e-mail seeking comment Friday. In an interview with The Recorder last summer, Day said he was grooming the next generation of leaders at his firm, but also noted that the firm was open to the possibility of a merger.
Early Friday, a spokesperson for Howrey indicated that an announcement was imminent, but later in the day the firm provided an official statement that downplayed the negotiations.
"As part of our ongoing plans for expansion in Northern California, Howrey has spoken with many different firms. Whenever law firms combine their practices it is an incredibly complex process and numerous issues must be resolved before the parties can come to a full agreement. As of today, there is no deal with any firm. A statement will be forthcoming at the appropriate time."
