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With all its life sciences startups, San Diego looks like promising terrain for law firm expansion. But as countless firms have found, building an office there is harder than it looks. Among other challenges, there aren’t enough marquee partners — or clients — to go around. “There are 30 branch offices of AmLaw 100 firms in San Diego,” says J. Terence O’Malley, chairman of Gray Cary Ware & Freidenrich. “They hire lawyers from each other, and the total population of lawyers in those offices doesn’t grow by very much.” The cluster of research institutes surrounding UC-San Diego — including Salk, Burnham and Scripps — spawns plenty of new companies. But although the San Diego market withstood the dot-com crash and continues to grow, it is still a fraction of the size of the country’s largest life sciences hub in Northern California’s Silicon Valley. “It’s a great market with lots of opportunity, but there are too many firms for the amount of business,” says Frederick Muto, managing partner of Cooley Godward’s San Diego practice. “At some point people are going to wake up and realize it’s a deeply lawyered market,” he says, adding that a shakeout is inevitable. The area’s newest arrival is Palo Alto’s Wilson Sonsini Goodrich & Rosati, which recently announced that it was opening an office in San Diego with five partners, three of them poached from Pillsbury Winthrop. Wilson Sonsini says it is planning to add as many as 12 additional lawyers to its San Diego practice in coming months, according to a firm spokeswoman, including at least one partner who plans to relocate from Palo Alto. The firm has an advantage over other newcomers, according to insiders, because it has strong name recognition, particularly in venture capital circles, as well as existing clients in Southern California. “Wilson already has a lot of work in San Diego,” says O’Malley. “So it’s good for lawyers who are [currently] living out of suitcases.” Larry Watanabe, a legal recruiter from San Diego-based Watanabe Nason & Seltzer, counts only 35 lawyers who are fully dedicated to life sciences in San Diego. “Each major firm has maybe three or four lawyers that are really deep in life sciences,” he says. “Some have no presence. They’ll say they have life science capability, but when I go through the depth of the community, it’s really surprising how little there is.” Agreeing with that assessment is David Geerdes, managing partner of Heller Ehrman White & McAuliffe’s San Diego practice. “There are a lot of attorneys who hold themselves out as practitioners in that area, but if you look at the CVs on their Web sites, they’re securities litigators or have a background that is totally different,” he says. Clients want lawyers with stronger life sciences credentials — in fact, a Ph.D. is sometimes seen as essential — and that narrows the field, says David Doyle, a patent litigator in Morrison & Foerster’s San Diego office who co-chairs the firm’s IP practice. “It leads to a whole other screening. Clients are not willing to work with people who are not familiar with their industry and the science of it. It’s extremely important.” Several top California firms, including Cooley and Heller Ehrman, currently employ only one or two attorneys each in San Diego who are solely dedicated to life sciences. But head counts are imprecise because most lawyers share work with colleagues in other fields. Gray Cary, for example, has one patent partner focusing exclusively on life sciences work. But four other San Diego partners spend at least half of their time on life science matters, while four more corporate partners spend a significant amount of time in the field. Four other litigators spend “some” time on life science clients, according to the firm. Gray Cary has had roots in San Diego since 1927, and Pillsbury Winthrop acquired a San Diego office when it merged with Lillick & McHose in 1991. Palo Alto-based Cooley Godward arrived in 1992, Heller Ehrman came in 1998 and Morrison & Foerster followed a year later. More firms have flocked to the region in the past few years, according to Watanabe. Firms like Los Angeles’ Quinn Emanuel Urquhart Oliver & Hedges have opened offices, while national firms like Foley & Lardner have stepped into the market through mergers. After Pennie & Edmonds opened an office, it was acquired by Jones Day. Clifford Chance took a chunk of the San Diego practice from now-defunct Brobeck, Phleger & Harrison. And McDermott, Will & Emery acquired Campbell & Flores late last year, which resulted in one biotech patent prosecution partner. Some of the firms that have been in San Diego since the 1990s have opened second offices in northern San Diego County, mostly to be closer to UC San Diego in La Jolla and the research facilities that ring it. Watanabe says Cooley has the largest corporate life sciences practice in San Diego, followed by Heller Ehrman, Morrison & Foerster, Gray Cary and Pillsbury Winthrop. Cooley has seen more than a dozen IPOs come out of its San Diego office this year. Last year, it had none, says Muto, who notes that his clients “range from companies that are attempting to develop a vaccine for cancers to companies developing � food additives and perfumes.” Even with that range, the region’s promise has limits. “We are very busy but we want more clients,” says MoFo’s Doyle. “And Wilson wants them and Pillsbury wants them and Cooley wants them.” Adrienne Sanders is a reporter at The Recorder who covers law firms and other matters.

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