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When Morgan, Lewis & Bockius scooped up Dennis Mondolino’s 35-lawyer patent boutique in 2001, it was supposed to be a feather in the cap for the firm and its intellectual property practice. The boutique, the former Hopgood Calimafde Judlowe & Mondolino of New York, had high-profile clients and a solid reputation for patent litigation, which seemed to fit with Morgan’s goals. Alas, it was a poor match from the start. Management dropped the Hopgood group into the litigation practice instead of the traditional IP practice, ruffling the feathers of other Morgan partners in New York and sowing discontent firmwide. At least 30 Morgan IP lawyers, including 13 partners, have left the firm in the last year. Three out of four trademark partners in the New York office alone have exited, along with several IP stars from Morgan’s Washington, D.C., patent group. To top it off, in November, Mondolino and half of the former Hopgood group defected to McDermott Will & Emery. Former partners say the botched acquisition laid bare the flaws of a secretive and fractious management group that sought to boost profits, but had no clear plan for orderly growth. IP partners worried that they would be competing for business with the team from Hopgood, and, according to former Morgan IP partner Gregory Shatan, the new lawyers were never really integrated into the firm. Michael Clayton, head of the firm’s copyright and trademark practice, describes the IP practice as healthy, with revenues up from $5 million a decade ago to $115 million in 2004. Claims that power struggles are to blame for recent departures are overblown, he says: “Anyone who focuses on internal organizational structure instead of clients is not going to succeed in this law firm.” Defections are inevitable in any growing practice, he says: “I can’t say we’re not going to miss some of the people who left, but sometimes people just don’t fit.” Just how many people have left the IP practice is difficult to establish. On January 1, 2004, the firm issued a press release welcoming 34 IP lawyers, bringing the total to “more than 200.” Two years later, IP lawyers number 113, according to Eric Kraeutler, a Morgan partner based in Philadelphia who co-chairs the firm’s IP litigation practice. Kraeutler says the “200″ included patent agents and other IP professionals who do not count toward the firm’s official IP roster. Clayton says that on an “apples-to-apples” basis, head count has remained about the same from 2004 to now. Morgan’s IP group got its formal start in 1993, when Robert Gaybrick brought his patent practice to the firm’s D.C. office from Finnegan, Henderson, Farabow, Garrett & Dunner, an IP specialty shop in the District that typically sees few defections. The practice grew exponentially, and by 2002 the firm had 73 lawyers in its IP group, primarily in New York and the District. When the opportunity came to add an IP litigation star in Mondolino, Morgan didn’t hesitate to pursue it. The effort was spearheaded by Philip Werner, a mergers and acquisitions partner on the management committee, and James Pagliaro, head of litigation. The former partners agree that the decision to go after Hopgood fit with the firm strategy of boosting its IP litigation resources, but they say they felt less of a true partnership when they weren’t consulted. “How could the firm pursue a big acquisition in my area of law without even asking me?” says one. Former partners also felt that they were misled about the role the Hopgood attorneys would play. They were told the Hopgood attorneys would focus only on litigation — explaining the decision to place them under the auspices of the litigation department — but it soon became obvious that Mondolino intended to continue some of his patent prosecution and trademark work. From the time they arrived in 2002, the Hopgood attorneys were isolated from their IP brethren, says Shatan, now at Winston & Strawn. They were seated with the litigation practice on a different floor from the IP group, which meant few opportunities for informal hobnobbing with their colleagues in IP, Shatan says. And so, after being wooed by firm brass, Mondolino and his attorneys got a chilly reception from the rank and file. More formal integration was also discouraged, according to attorneys in the New York trademark practice, who say Clayton told them to avoid contact with the Hopgood group, at least until its role in the firm was cemented. Clayton denies this. TURF TUSSLES While at Morgan, Mondolino worked a busy trial schedule. He cemented the firm’s relationship with drug maker GlaxoSmithKline PLC and was one of the firm’s highest-paid partners, according to current and former partners. Mondolino says he wanted to integrate with the rest of IP — and was promised from the start that the firm would facilitate this — but it never happened. “The structure didn’t make sense to me,” Mondolino says of his group’s positioning. The estrangement from the rest of IP made it difficult to market the work of his group, he says. Kraeutler says both Mondolino and the firm could have made the transition smoother. “Dennis and his lawyers were terrific, but they never integrated as well as they should have,” he says. William Wallace, a former Morgan partner who headed litigation until 2001 and is now at Milbank, Tweed, Hadley & McCloy, describes the root of the problem as “turf wars” between the litigation and IP groups. “They can’t find a way at the top to force a solution,” he says. “Neither could I.” The problem stemmed from the IP group resisting giving up authority over patent litigation to anyone else, he says. His impression is that the atmosphere has not changed, and several former partners who left in 2005 and asked not to be named agreed. The idea that recent departures stem from a power struggle “just doesn’t resonate,” says Francis Milone, the firm’s chair. “Sometimes you have a confluence of personalities that don’t work,” he says. “You can’t indict the whole system.” Nevertheless, several former partners say dissatisfaction with management and the practice’s structure was a factor in their decision to leave (though only Mondolino calls it the deciding factor). A former partner in the D.C. patent group calls Morgan a tough place for a junior partner to grow a practice, with too much emphasis on billable hours. “Guys who were cranking out 2,000-plus hours were treated better than those who billed 1,800 and brought in $2 million in business,” he says. Another partner cites a number of factors: too many partners in boom times who did not generate their own business, several high-profile litigation losses, and the edging out of some lower-profit patent prosecution work. A third blames turnover on the drive to top $1 million in the profits-per-partner category (Morgan averaged $900,000 per partner in the 2004 American Lawyer survey of the nation’s top-grossing law firms), suggesting that the firm intended for some of the less-profitable partners to leave. It goes against firm policy to comment on the specifics of individual departures, Kraeutler says. Regardless of the cause, the recent disruptions have made Morgan’s New York IP practice a tough sell for recruiters, says Anna Tsiriluk, managing director of Major, Lindsey & Africa’s New York office. “Historically the New York office was closely tied to the trademark litigation practice,” says Tsiriluk, who has helped lawyers exit Morgan. “They were one of the most prominent players in that area.” The Hopgood acquisition seemed to be a signal that patent litigation was the office’s new focus, she says, which put the firm in a more competitive weight class. With the defection of half of the Hopgood group, Morgan’s New York office faces even more of an uphill battle to re-establish its identity, she says. Morgan is not the only firm to struggle to manage a fragmented IP practice. Those that lavish attention on one practice area, like litigation, face the risk of alienating attorneys in other areas, like life sciences, trademarks, and patent prosecution. These lawyers typically bill fewer hours than the litigators, and often feel underappreciated. “A consistent theme I hear is that they feel uncomfortable because their firm doesn’t want to support their practice,” says Rick Florsheim, a partner who heads the IP group at Foley & Lardner, speaking generally about nonlitigators. “Some firms only go after the litigators.” Meanwhile, many of the litigators see themselves first and foremost as IP lawyers, and want a management structure that reflects this. But some firms have created an IP practice as an “adjunct, a stepchild, to some other practice,” Florsheim says. At Morgan, the drive to swoop up big-name boutiques is undiminished. On January 1, 2004, Morgan brought in 34 lawyers from the collapsed IP boutique Pennie & Edmonds. All of the Pennie partners have stayed, Kraeutler says. Former partners concede that the integration has gone smoother than in the past, though few have forgotten the Hopgood era. “A lot of good lawyers were preoccupied with firm politics,” says Shatan. “It was a big distraction.”
Ben Hallman is a reporter for The American Lawyer , the ALM publication in which this article first appeared.

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