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It’s a running joke at Wiley Rein’s annual partnership meeting. Every session begins with the equity partners gathered in an off-campus conference room, waiting casually for their chief to make his annual pronouncement: “Don’t worry, I’m not going anywhere.” And there’s a good chuckle. Continuity is maintained and Armageddon averted � at least for another year. Of the 60 or so firm owners, all are connected to Richard Wiley, who built the firm from the floorboards up on the strength of his communications group, long heralded as the industry’s dominant practice, but which by design now accounts for only 30 percent of the firm’s revenue. Receiving considerably less praise are several practices that make up the bulk of the firm’s returns, such as insurance, government contracts, election law, and intellectual property. All of which combined to make 2006 a record year for the firm, with revenues topping $162 million. Added to the firm’s already-big year is the $245 million contingent fee Wiley Rein garnered courtesy of patent litigation partner James Wallace’s BlackBerry case. Which means that for one year, Wiley Rein is sitting atop the D.C. 20, with $407 million in revenue � a truly memorable score for any firm. But despite the jaw-dropping number, questions about the firm’s future persist. Wiley Rein took a hit in February when former name partner Fred Fielding, the head of the firm’s litigation practice, left to become White House counsel. He took three litigation lawyers with him (though many expect his return in two years). There are also doubts over whether the firm’s practice strengths rest too heavily on an aging power center; following the name partners in rainmaking are insurance partner Thomas Brunner, government contracts partner Rand Allen, and Wallace, all first-generation earners. Then there’s the firm’s midlevel size. The 270 lawyers, niche practices, and lack of a full-service bench are qualities industry consultants typically look for when eyeing takeover candidates. Meaning Wiley’s annual joke is a subtle reminder of his, and perhaps the firm’s, own approaching mortality. Industry watchers say it’s quite possible Wiley Rein’s second generation will match the success of Williams & Connolly after the death of founding partner Edward Bennett Williams. It’s also quite possible it will not. “If I had to bet,” says a Washington recruiter, “about where Wiley Rein will be in 20 years, I’d say it won’t be in the form we see today.” Today, Dick Wiley is 72 and is perhaps the closest thing in the District’s contemporary legal arena to a Washington Lawyer (like Williams, Clark Clifford, and Abe Fortas, who were power players and pillars of the establishment). His exploits are recounted admiringly by colleagues and adversaries alike, with each anecdote punctuated by the oft-used acknowledgement that he’s “the sixth commissioner of the FCC.” “He has been the most effective and influential member of the communications bar for 15 or 20 years,” says Andrew Schwartzman, executive director of the Media Access Project, a public interest watchdog. “Nobody comes close.” But of equal note to Wiley’s personal success within the communications bar is his aversion to an eat-what-you-kill sensibility. Though money isn’t shared equally, Wiley Rein stands for benevolent despotism. And at least for now, that’s working. “There are,” says Wallace, “a lot of second BlackBerry homes out on the Chesapeake.” And if you are looking for signs of optimism, take this down: That BlackBerry case, the largest in the firm’s history, wasn’t tied to Dick Wiley at all. CRACKBERRY NATION The false twist is a method of yarning in which clothing fibers are textured by sequentially twisting, heating, and cooling. The upshot being that the material is more durable, which has little to do with Wiley (unless he’s wearing the right suit) and everything to do with Wiley Rein’s client, NTP, prying $612.5 million out of RIM last March. Some 30 years ago a patent disagreement over those fibers led Wiley’s Wallace to face off against patent litigator Donald Stout. It was a fortuitous encounter. Over the next three decades, the two lawyers bumped into each other on patent litigation cases. In 2001, Stout was a partner at Arlington, Va.-based Antonelli, Terry, Stout & Kraus. He was also sitting on patents for wireless e-mail technology, along with his client, Chicago inventor Thomas Campana Jr., through a company they owned named NTP. Enter RIM, the maker of BlackBerry, a product of Waterloo, Ontario, native Mike Lazaridis, the Bill Gates of Canada. RIM was giving away its new portable e-mailer to members of Congress, trying to jump-start entrepreneurial zeitgeist. Upon learning of the new BlackBerry, Stout turned to Wiley’s Wallace to take on the patent infringement case that would become one of the most heralded intellectual property showdowns, and in doing so NTP became the firm’s first patent contingency client. More than two dozen current and former Wiley partners and associates interviewed for this article placed the contingent fee at close to 40 percent. “There was no resistance from the firm,” Wallace says. “We thought we’d be in trial within a year, which would contain costs, and we had a client who would pay for all out-of-pocket expenses.” Little did he know the many twists and turns the case would take, with Wallace, partner John Wyss, then-associate Scott Bain, and associate Kevin Anderson billing thousands of hours over the next five years, spending the firm’s money. Once the trial started in November 2002, RIM’s counsel from Jones Day unveiled a demonstration that would prove pivotal. Using two antiquated laptop computers and a pager, RIM explained how its own technology from 1987 � before NTP’s patents were applied in 1991 � made wireless e-mail possible. The RIM group sent a wireless e-mail reading “Tommy, the deal is closed,” which appeared to show that NTP’s case was dust. But during cross-examination, Wiley’s Anderson noticed that the equipment RIM used for the demonstration was mid-�90s technology and not from 1987, as RIM said. It took the jury four hours to reach a verdict. At the time, the award was the largest telecommunications royalty fee in history, with NTP being given a 5.7 percent cut for the future sales of BlackBerrys sold in the United States over the next 10 years. The judge then increased the royalty to 8.6 percent � including a $4.5 million legal fee � calling RIM’s demonstration “fraudulent.” RIM responded by firing its lawyers and launching an appeal. But that also failed. All the while, the sales and value of NTP were increasing dramatically. “When we sued in November 2001, RIM had 40,000 customers,” says Wallace. “By the time of the trial they had over 300,000. And now they have over 5 million.” At the end of the trial, Wallace says the firm had invested $6.5 million in the case, which was much larger than Wallace’s pre-complaint estimate, largely because RIM sunk $24 million into playing defense. “I wasn’t worried,” says Wallace. “I had a verdict under my belt.” Still, the growing fees and media attention put pressure on the lawyers, who were going blind on appeals paperwork. Meanwhile, the two sides continued to try to hammer out a settlement agreement, including a 2004 meeting in Nice, France, between Wallace and RIM’s latest counsel from Howrey. “I flew all night,” Wallace says, “took a shower, had lunch with my client, and then exchanged pleasantries with the lawyers from RIM. And the meeting lasted five minutes.” Finally, in March 2005, the sides had a $450 million settlement. But the deal collapsed. “I had quite a few interested partners at that point,” Wallace says. “But I took it in stride. I was seeing the pot growing bigger every week.” And so, too, were the billable hours. With a huge contingent fee now expected, sources say, the billing hours increased substantially as lawyers from other parts of the firm got involved. After the Supreme Court rejected RIM’s appeal for cert in January 2006, there was little other recourse. With days scrolling down until a court-ordered injunction that would have halted BlackBerry’s service, Wallace flew to New York for one final meeting, packing enough clothes for one day. After the France trip he wasn’t optimistic. But this time, Martin Glick, a partner at San Francisco-based Howard Rice Nemerovski Canady Falk & Rabkin, was looking to cut a deal for RIM. Over two days they bartered out a settlement. On a Thursday, after Wallace stopped to buy new underwear and socks, the parties met at the office of Skadden, Arps, Slate, Meagher & Flom, which does RIM’s securities work, to sign the deal. Once the agreed-upon 4 p.m. news embargo passed, Wallace let his partners know. Wiley read the news while looking down at his BlackBerry. “We had a happy partners’ meeting,” Wallace says, “on Monday morning.” FOUNDING FATHER Wiley Rein began with an ending. After Dick Wiley’s seven-year stint at the Federal Communications Commission, where he moved quickly from general counsel to commissioner to chairman, he briefly considered a return to his hometown of Chicago and a career in politics. But private-practice dollars lured him to Kirkland & Ellis’ D.C. office in 1977. Success at Kirkland was rapid. In only a few years he became a law firm unto himself, building a colossal communications practice, which included such clients as CBS, Comsat, GTE Corp., and the American Newspaper Publishers Association. By 1983, Wiley was the firm’s highest-paid partner, along with Elmer Johnson, a partner in Kirkland’s Chicago office, who was courting a blue-chip client, BellSouth. But the telecom company had conflicts with many of Wiley’s clients. Kirkland sided with BellSouth, meaning only one thing to Wiley: It was time for a move. When word got out that the former FCC chairman was a free agent, interest was high. But Wiley was bringing several partners with him, and Kirkland’s two-tiered partnership, at the time an unheard-of business structure for law firms in Washington, became an issue. This incompatibility with area firms helped propel Wiley to open his own shop. Half of the D.C. Kirkland office, 36 lawyers, joined him. (Ironically, Johnson left Kirkland to become general counsel of General Motors, and BellSouth balked at being a Kirkland client.) The new firm grew quickly by adding laterals, often through strong ties to the Republican Party. Fielding arrived in 1986, after working for President Ronald Reagan as White House counsel, and became the ultimate litigation fixer. Fielding’s clients included Boeing Corp., MeadWestvaco, Hershey Co., and Molson Coors Brewing Co., all of which remain with the firm today. Insurance practitioner Brunner joined in 1987 from Piper & Marbury, immediately becoming a force in the firm, rivaling Wiley for top-billing partner.The firm’s practices were rounded out with the addition of government contracts partner Allen and well-known election law partner Jan Baran. But not every move was a success for the burgeoning firm. Original name partner Philip Johnson left after only six months, joining Skadden’s Washington office after his securities practice at Wiley Rein never got off the ground. The firm has never been able to add a securities, antitrust, or large corporate practice that would make it a one-stop shop, as was the original goal. “I never wanted a boutique firm, and it’s hard to keep a firm at 60 lawyers. What I’m looking to do is create a full-service, Washington-based firm,” Wiley told Legal Times in 1986. Wiley says he never could foresee his firm having more than 200 lawyers, though he concedes that today’s legal market has made growing into a full-service firm more difficult. The firm, which has a reputation for not losing partners and losing associates only to the government, is trying to cultivate a second generation of leaders. But that has also been made harder because the firm pays comparably less than other, larger, general-practice firms. Daniel Troy went from Wiley to work as the chief counsel of the Food and Drug Administration and then to Sidley Austin. Michael Toner, who was chairman of the Federal Election Commission after leaving Wiley, then went to Bryan Cave. Recruiters and consultants say Wiley Rein couldn’t match the offers. “We have given our committees enough work and responsibility to find out who our leaders are,” Wiley says. “I’m very comfortable with the talent we have at this firm.” IN THE POCKET A few months ago, Wiley Rein’s office underwent some light remodeling, though it was not what could be expected after the best financial year in the firm’s history; the moss green carpeting and emerald-upholstered furniture still impart an antiquated, private-club vibe. Instead, the firm had the rather remedial task of changing its moniker after Fielding’s departure, on everything from bottled water to stationery to the frosted lettering on the first-floor windows facing K Street. Wiley Rein’s ability to resist a larger aesthetic transformation embodies the firm’s culture: discernably conservative, Midwestern. “He knows the people who he has around him,” says former partner James Phipps, now owner of AquaStruct Inc. “He cares about them. The byproduct of that is tremendous loyalty. And I don’t think that’s common in big law firms. But if you are going to practice at Wiley Rein, you have to be trusting with Dick fairly compensating you.” That fair treatment is ultimately decided by a seven-member administrative committee, three of whom are elected. But that committee’s power rests largely within the grasp of the firm’s name partners and Brunner, now the third-largest shareholder and dubbed “unnamed name partner.” Every year, lawyers hear first from Wiley about their pay during an individual meeting. Because of the “Wiley factor,” there’s enough trust and respect for the system to work. Though last year that process was put to the test when the firm was distributing the BlackBerry money, which led to some tremors of discontent among the middle class. Lawyers inside and outside the firm have questioned whether the large payday left some partners complacent and cutting back on their billables. The firm says that’s not the case. “The people who work here do it because they like what they’re doing. There hasn’t been much of any attrition after the settlement,” says Barbara Van Gelder, a white-collar partner who has taken over many of Fielding’s clients. Last year, Van Gelder represented, for a capped fee, David Safavian, the former General Services Administration chief of staff convicted in the Jack Abramoff scandal. Only communications partner Jeffrey Lindner retired early. Once the money was wired, the firm moved quickly. In less than two weeks, every employee received a BlackBerry check. Equity partners kept about 92 percent of the $245 million settlement, say several lawyers within the firm. Dollars were doled out to equity partners based on a formula that took into account partners’ number of shares, their tenure, and if they did work on the BlackBerry case. Equity partners not involved with the case are reported to have received roughly $3 million. Fielding reported on his White House financial disclosure form earning $6.6 million last year. The firm’s profits per partner were $785,000 in 2006. Nonequity partners received a roughly $100,000 bonus and associates less than half of their annual income, according to partners and associates at the firm. Among the staff, bonuses were determined largely by tenure, with veterans getting checks far exceeding $10,000. “I made sure everyone knew I’d be at my desk at 8 a.m. the next morning,” Wiley says. “We were doing well before BlackBerry. We’ll do well after.” While the firm did its best to quickly and discreetly chop up the money, not wanting jealousy to fester, there were nonetheless grumblings about why more wasn’t directed to business development or bringing on laterals or giving the office a face lift. Wiley refutes the concerns, saying the firm has no debt and has enough cash to attract laterals as it sees fit. Yet questions about the firm’s future still remain. “We were in a meeting one day,” says partner Gregory Cirillo, “and someone joked that Dick didn’t know their extension. Immediately Dick went right around the table � there was probably 20 of us � and knew everyone’s extension. Bam. Bam. Bam. And, honestly, I didn’t even know his extension.” One day, though not too soon, Wiley won’t be expected to know every lawyer’s phone number. Eventually he will step aside from his post as managing partner. “I don’t ever see myself retiring,” says Wiley. “I’ll get to a point where I won’t come in every day and I might take a post as chairman. But I don’t see myself ever not working.” Plans to move to the second generation are an open secret. So far the firm has focused on grooming government contracts partner Scott McCaleb, telecom partners Dick Bodorff and Peter Shields, and litigation partner Helgi Walker as leaders. The firm says plans have been made, though Wiley’s successor has not been formally named. However, insiders say Samuel Walker, who developed Hershey and Coors as clients before leaving for Coors as general counsel, was a candidate to take over. Now communications partner Michael Senkowski is looked to as the next logical choice for managing partner. But that could all change if the firm looks to merge in the near future. The firm has had a number of suitors, including talks in 2003 with Sheppard Mullin Richter & Hampton, a 370-lawyer banking and finance law firm based largely on the West Coast and doomed with the tag of being a regional player. Those flirtations collapsed, at least in part, because many in the Wiley partnership didn’t see the benefit that adding a West Coast presence would bring. But the general idea of Wiley Rein merging isn’t anathema to the partnership. Wiley even seems open to the possibility. “I don’t hear my clients saying, �You have to be bigger.’ That isn’t happening,” he says. “But we’re constantly evaluating where we are in the market and looking at options. I wouldn’t be doing my job if I wasn’t.”Ironically, consultants say any merger may be hindered by the firm’s communications practice because of client conflicts. Nonetheless, Wiley Rein maintains that with its stable of blue-chip telecom clients and attempts to push work down to younger partners, it can remain independent and a D.C. 20 staple for years to come. “I don’t feel like my name has to live on forever,” says Wiley. “We want to make this a place where people in their 40s can see the future. I don’t think it’s going to be a big deal when I’m no longer the leader in the firm.”
Nathan Carlile can be contacted at [email protected].

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