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IP Boutique's Fall Is Fox Rothschild's GainLike many IP boutiques, Synnestvedt & Lechner had a long history, but now, it's no more. Following a series of partner departures and layoffs, the firm has disappeared into a merger, with Fox Rothschild acquiring the majority of its remaining lawyers. Synnestvedt & Lechner joins the club of IP boutiques that have burned out in recent years. But a managing partner says the problems weren't attributable to the boutique model, but, rather, to the fact that no one wanted to run the firm anymore.
The American Lawyer2008-08-27 12:00:00 AM
Like many IP boutiques, Philadelphia-based Synnestvedt & Lechner had a long history. Its roots went back 111 years, and clients included Honeywell International and IBM.
Today, Synnestvedt is no more. Following a series of partner departures and layoffs, the firm disappeared into merger, with Fox Rothschild acquiring the majority of its remaining lawyers -- eight attorneys, including managing partner Joseph Posillico. A three-lawyer group will join Ballard Spahr Andrews & Ingersoll. Another partner is now at Stradley Ronon Stevens & Young.
Synnestvedt & Lechner joins the club of IP boutiques that have burned out in recent years. But Posillico insists Synnestvedt's problems weren't attributable to the boutique model, which he says is still viable. On a per-attorney basis, Synnestvedt was having a "banner year" in terms of revenue per lawyer, he says. Instead, it came down to the fact that no one wanted to run the firm anymore.
"In some IP boutiques you'll have one or two partners who enjoy and are good at doing the administrative work and would perhaps be happy to scale back in client work," Posillico says. "The make up of the people we had was not that way. They were much more interested in staying in contact with their clients."
That included Posillico, who took over as managing partner in 2006 for a three-year term. It was set to expire this year, and Posillico says no one wanted to take over from him.
"I took the managing partner role as mostly a burden and not as something that was particularly enjoyable," he says. "My preferences were clearly toward serving my clients, and that was a big driving force for me."
Merger had been discussed for a while. Back in 2005, then-managing partner Alexis Barron told sibling publication The Legal Intelligencer that the boutique had been approached about a merger and had considered the recruiting, marketing and administrative advantages. But Synnestvedt, which operated in Philadelphia and Princeton, wanted to keep its independence, he said.
"Competing against the large firms is a challenge," Barron told the Intelligencer. "But that doesn't mean you can't have a litigation practice unless you represent GM or Merck."
Posillico says business was good pre-merger. Yet the firm also faced pressure from the evolving marketplace, according to another of the departing partners, as general practice firms began beefing up their IP capabilities. "The ability to get referrals from general practice firms has slowed down considerably," says Patrick Kelly, who is joining Ballard Spahr.
Late last year, Synnestvedt began leaking lawyers, first slowly, then quickly. In October, Princeton partner Peter Butch III joined Fox Rothschild, followed a few months later by Marilou Watson. In February, another partner, Joshua Slavitt, left for Pepper Hamilton in Philadelphia.
Momentum picked up in April, when a four-partner group defected to Saul Ewing, leaving only nine partners and 20 total lawyers behind. Posillico says the group made up less than 10 percent of firm revenue. Still, a few days later, the diminishing firm laid off at least seven staffers, according to The Legal Intelligencer.
"That was really the end," says Arthur Makadon, chairman of Ballard Spahr, which Tuesday announced that it has picked up Kelly and two other lawyers. "At that point, everyone was talking to other people ... [and] we began talking to Pat [Kelly]."
Posillico concedes the losses were "one of the factors" creating pressure to find a merger, though he says it wasn't the only reason.
Merger, typically the final note for the IP boutiques, was seen as necessary. Posillico says the firm began pursuing a merger about three months ago and talked with four or five different firms, including Ballard Spahr.
"We were not interested in it," says Makadon, whose firm went on to acquire another IP boutique, Atlanta's Needle & Rosenberg, in June. "Since the spring, the only people we've talked to are Pat [Kelly] and the two other guys." (Makadon says Kelly's bioscience focus fits well with Ballard and its new IP group.)
Fox Rothschild instead became the acquirer. Posillico says they decided on Fox Rothschild because of a tradition of client service that fit with its culture. He also had worked in the past with Abraham Reich, Fox Rothschild's co-chair.
Posillico, Gary Hecht and Richard Woodbridge join as partners in what is now a 40-lawyer IP group. Three lawyers, including Barron, join as special counsel. Two associates and two patent agents also are moving to Fox Rothschild. For now they will continue to practice in their current offices, though they eventually will move into Fox Rothschild's Philadelphia and Princeton digs.
"Synnestvedt is the oldest, continuously existing intellectual property law firm in the area, and one of the oldest in the country," Mark Silow, Fox Rothschild's administrative partner and chief operating officer, said in a statement. "They bring exceptional experience not only in patent and trademark preparation and prosecution, but also in intellectual property litigation."
Fox Rothschild posted revenues of $184 million and profits per partner of $520,000 for 2007. The new additions should bring additional revenue in the high seven-figure range to Fox Rothschild, Posillico says.
Not everyone is coming along for the ride. In addition to Kelly's group, partner Joseph Rossi is skipping out on the Fox Rothschild move; on Monday, he announced he will be joining Stradley Ronon. He specializes in chemical and pharmaceutical IP, including patent prosecution. Rossi says he made the decision to split off because of certain synergies between his clients and ones at Stradley Ronon.
"We are thrilled to welcome a partner of Joe's caliber to the firm," said Stradley Ronon managing partner Jeffrey Lutsky in a statement. "His experience will strengthen our existing intellectual property capabilities and will expand the IP services we are able to offer clients."
A few of the lawyers post-Synnestvedt's merger are still unaccounted for. Trademark partners Lisa Lane and Bryna Scott were not mentioned in any release Tuesday, nor were some of the counsel and associates still listed on the firm's Web site. Fox Rothschild and Synnestvedt say they are "discussing the possibility of several other attorneys from Synnestvedt joining the firm," which Posillico says includes Lane and Scott. All of the equity partners, though, are already placed with firms, he adds.
Lane and Scott did not respond to requests for comment.