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New Jersey’s venture capital landscape has been realigned yet again, this time with the move by a five-lawyer group from Newark’s Sills Cummis Epstein & Gross to the national firm of Sonnenschein Nath & Rosenthal. The departure of Victor Boyajian’s team, including three partners, comes on the heels of the defection of a competitive venture-capital group, headed by David Sorin, from the Princeton office of Wilmer Cutler Pickering Hale and Dorr to the local Morgan, Lewis & Bockius branch. Boyajian and Sorin are among New Jersey’s top dealmakers in the emerging growth market, handling everything from tiny infusions of venture capital through expanded stages of growth and on to IPOs and mergers and acquisitions. It is a specialized niche of corporate and securities work that reached stratospheric heights before the bursting of the high tech bubble in 2000. Boyajian’s move – to the Short Hills office of the Chicago-based, 700-lawyer Sonnenschein Nath – differs somewhat from the seven-lawyer Sorin group defection. Boyajian is leaving an entrenched New Jersey firm for a national firm with nine offices coast to coast but without much of a New Jersey presence. Sorin, by contrast, left a 1,000-lawyer firm with 14 offices in the U.S. and Europe to join an even larger firm, with 1,200 lawyers and 18 offices worldwide. Boyajian, 44, plays down the need for a state platform. “I’m already using several lawyers from Sonnenschein’s New York office, and we’ve got eight M&A deals going now,” he says, pointing in particular to Sonnenschein’s 50-lawyer global venture capital/emerging growth practice as well as the firm’s presence in Silicon Valley in the Bay area. (Sills Cummis also has a San Francisco branch.) Boyajian adds that Sonnenschein is looking at possible moves into Boston, Seattle, San Diego and the United Kingdom, all key locations for developing companies in technology, pharmaceuticals, biotech and other life science fields. Besides, “I don’t see us as vendors of legal services” but rather as counselors who are nurturing small entities and advising CEOs on how to grow and what to buy or spin off along the way, he says. Defecting with Boyajian are former Sills Cummis partners John Cleary II, 39, and David Papier, 41, along with of counsel Joel Bock, 43, and associate James Jasaitis, 33. Bock, an engineer and patent attorney who came to Sills Cummis only a year ago from Clifford Chance in New York, is now a partner with Sonnenschein Nath. Unlike Boyajian, who joined Sills Cummis from law school in 1986, the others were all laterals from Manhattan, as the Newark firm has been aggressively recruiting midlevel associates and young partners for several years. Cleary, a CPA who holds an LL.M. from New York University, was lured to Sills Cummis just 16 months ago from Morrison & Forrester. Papier, whose niche is Israeli-based tech deals, was a lateral associate from Rosenman & Colin who once worked at Lord Day & Lord Barrett Smith. He made partner at Sills Cummis in late 2001. Jasaitis began at Tenzer Greenblatt, later acquired by Blank Rome. “No firm is immune” from losing talent to competitors, says Robert Max Crane, who co-chairs Sills Cummis’ corporate practice. He quickly adds, though, that the 155-lawyer firm is maintaining “a net plus” by successfully luring more New York lawyers across the river, particularly for its latest growth concentrations in health care, biotech and “big pharm”-related practices. Crane sees these areas as the most profitable practice areas in the New Jersey market, suggesting that the bloom has remained off the rose of the dot-com phenomenon. Upsurge in Startups Others, however, including Boyajian, cite the comeback of high tech and startups in those same fields, and point in part to the recent upsurge in IPOs. “It’s all coming back,” says Joseph Allegra, a general partner with Edison Venture Fund in Lawrenceville, which also has offices in Pennsylvania and Virginia and which focuses on investing in information technology companies, including those in financial services, pharmaceutical IT, software and security. Allegra says “2004 is better than 2003 and we expect it will continue to get better.” Allegra concedes that the emerging growth market remains “in turmoil” compared to what it was, adding, “There are not as many IPOs and there aren’t as many startups that are doing well enough to qualify.” The Edison fund invests $3 million to $5 million in growing companies with revenues of between $5 million to $20 million in the Mid-Atlantic area, financing internal growth as well as management buyouts, acquisitions, spinouts and secondary stock purchases. Boyajian and Sorin, along with the other venture capital dealmakers in the state, don’t just represent the companies. They often represent the VC funds such as Edison, Cross Atlantic Capital Partners of Radnor, Pa., Zon Capital Partners of Princeton, and Piquot Capital and Rho Capital Partners, both of New York. Not surprisingly they find themselves on opposite sides of many transactions. The other major competitor in New Jersey is Lowenstein Sandler, with Peter Ehrenberg, an M&A lawyer who heads the firm’s corporate department, along with Edward Zimmerman. Zimmerman, 36, like Boyajian and Sorin, focuses on private equity placements, counseling, strategic alliances, management buyouts, technology transfers and venture capital. He is a co-chair to the Jersey Angel Network, which brings together venture capital funds and angel investors from both ends of the state to jointly hear presentations from in-state entrepreneurs. U.K.-based Chambers & Partners Publishing, which ranks top lawyers and firms in specific practices in its annual Chambers USA client guide, lists Boyajian, Ehrenberg and Sorin as tied for the top slot for New Jersey corporate/M&A lawyers for 2004. Zimmerman is among seven attorneys ranked equally just below the top trio. But Lowenstein is ranked as the top dealmaking firm, with Ehrenberg, Zimmerman and fellow partner Alan Wovsaniker all being cited. Following Lowenstein are six firms ranked equally in second position. They are Sills Cummis; McCarter & English; Pitney Hardin; Drinker Biddle & Reath; Morgan, Lewis; and Hale and Dorr, which only a few weeks ago merged with Wilmer, Cutler & Pickering. Sonnenschein Nath came to New Jersey in June 2002, when it acquired the New York firm of RubinBaum, which had a five-lawyer office in Short Hills. That branch has remained active. Boyajian will co-manage it with the existing manager, Robert Cockren, a trusts and estates lawyer and active Union County Republican. The office, which had been handling estate planning and litigation with four lawyers, will now be up to nine lawyers with the Boyajian group. More importantly, Boyajian takes on the leadership of Sonnenschein’s venture capital/emerging growth practice nationwide and will be working with partners in San Francisco, New York, Chicago and Washington, D.C. primarily. “Victor and his group are going to be a great addition and we look forward to working with them,” says Sonnenschein’s chairman, Duane Quaini. The firm has 142 lawyers in its corporate and securities department, of which about 100 do IPOs and some 50 are venture technology lawyers, says Quaini and Boyajian. Matching Gaps Boyajian says he and his group will be going into other geographical markets, particularly the West Coast and Boston, in search of new entities to help grow. His practice represents companies three-fourths of the time, with the balance of the representation being the venture funds and other investment companies. With a national platform, he says, he will be able to do more “matching of gaps in product lines” by bringing small companies together for merger or acquisition or for possible spinoffs of divisions to other corporations. He is also involved, as are his competitors, with representing universities that spin out new technologies into commercial endeavors following success in the laboratory. A related area is helping Lucent Technology’s venture group in spinning out new technologies developed at the old Bell Labs. Boyajian says he sees Sorin’s Morgan, Lewis group focusing on southern New Jersey while his own group will continue to mine the northern part of New Jersey, capitalizing on the state’s dominance in pharmaceuticals, life sciences and telecom by matching such in-state companies to opportunities around the country. Boyajian, a board member of the New Jersey Technology Council, which has its own venture fund, says he sees a paradigm shift in the market, with some of the giant firms unable to crack the New York/New Jersey area without having the local connections. He cites the collapse of San Francisco’s Brobeck, Phleger & Harrison and the dramatic downturn of the Bay Area’s Wilson Sonsini Goodrich & Rosati. Brobeck had a large New York office before dissolving early last year. Wilson Sonsini, which thrived on venture fund work, has shed more than 200 lawyers nationwide and reduced its Manhattan presence while sliding from the 19th largest grossing firm in the U.S. in 2000 to the 46th largest last year, according to the American Lawyer magazine’s Am Law 100 annual survey. The magazine is affiliated with the Law Journal. Then again, Boyajian says he believes geography is less important as a local platform than the talent and experience of one’s team. His model is that of younger partners aided by some senior associates, as opposed to a structure that includes newer associates. “The clients demand it,” he says, adding, “It’s younger partners driving this, forming a crown jewel boutique within a national platform. We are acting as outside general counsel for our clients and they demand that experience level.” Others aren’t so sure. One in-state competitor, who asked to remain anonymous, says he believes that entrepreneurs want to do business face to face, and also want to know that if a firm helps them grow it can also handle its other needs, from employment and leasing, to patent prosecution to taxes. “They feel comfortable with a firm that knows the state, its judges, its landlords, its culture,” says this lawyer. The only other top partner to defect from Sills Cummis in many years, Philip Sellinger, thinks Boyajian is right. Sellinger, who headed Sills Cummis’ environmental practice before leaving in late 2002 to start up a New Jersey branch for the national firm of Greenberg Traurig, says, “The leaving of business developers [like Boyajian] for larger national platforms is a growing trend. All the major New Jersey firms have to deal with the reality that they can lose their top business getters.” Sellinger, whose Florham Park branch of Greenberg Traurig is up to 26 lawyers – almost all of them laterals – stresses the need for larger corporations to have regional or national firms servicing their needs throughout the nation. As for Sills Cummis, corporate chief Crane notes that in the last two months the firm has brought in five partners, three of counsel and two associates, all from New York offices and many from national firms. “We wish him well,” says Crane.

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