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It was a supernova of a year for intellectual property lawyers, with leaders of even the most industrial companies hollering for help with patents, trademarks and World Wide Web copyrights. Global businesses’ increasing lust for these accessories provided rocket fuel for firms dedicated to IP — but not enough to boost more IP specialty firms onto the NLJ 250 list. Last year, five IP-only “boutiques” were beefy enough to make this year’s list. And in hyper-kinetic 2000? Still just five. In fact, the size of the largest NLJ 250 intellectual property firm decreased. This year, Washington, D.C.,’s Finnegan Henderson Farabow Garrett & Dunner is home to 239 J.D.-holders. Last year, Pennie & Edmonds had 242. Firms such as Finnegan and Pennie work in what was once a sleepy, science-geeky backwater of patents, trademarks and copyrights. Now both firms are fighting off competition from general practice firms, which continue to raid them for IP lawyers. And they must also convince clients that with their firms’ long tradition, depth of their knowledge and large number of experts, they provide better service than general practice firms. A TALE OF TWO BOUTIQUES Besides Finnegan, two IP boutiques have more than 200 lawyers. One is Pennie & Edmonds; the other is Boston-originated Fish & Richardson. The latter two finished in a dead heat, with 204 lawyers apiece. The two behemoth boutiques may have landed on the same square, but there the similarity ends: One traveled down a chute, the other up a ladder. Fish & Richardson is the expanding one, the poster child. In the past year, Fish has grown through organic accretion of lawyers faster than all but four law firms of any kind. It is trying to become the first truly coast-to-coast IP firm and, banking on the frenzy surrounding the practice, has offices in all regions of the country, north, south, east and west. “We’ve had to tell people to treat us gently,” says Fish & Richardson partner Ruffin Cordell. “We say to them, ‘If it’s possible, we’d like to take no more than 20 cases this month or 50 this quarter.’ “ Meanwhile, Pennie & Edmonds lost 38 lawyers, who either defected for other jobs in a heated job market or, the firm says, were pushed out the door because they weren’t what the firm needed. Pennie has been on the list since 1994. Fish debuted in 1997′s NLJ 250, but fell off in 1998 when its Houston office closed. All five boutiques on the NLJ 250 have been there in previous years. Fish & Richardson, which split from Fish & Neave (also on the list) in 1969, boosted its growth by moving up principalship consideration from the eighth to sixth year and by promoting 21 associates to partner. The firm also opened an office in Dallas. “Our policy is to expand into markets with local types,” Cordell says. In recent years, and in Dallas this past year, the firm has hired commercial litigators without significant IP experience. The firm says that it is now fully prepared to handle non-IP commercial transactions. “We kind of have a foot in two worlds,” says Cordell. To avert hollow diversification and falling quality, the firm has spread management across its offices and holds a partnerwide teleconference every Thursday. He notes that the firm partners have pledged to remain vigilant in maintaining a unified firm outlook, lest they suffer the perils of growth. Pennie & Edmonds has already hit a bump that has, according to sources outside the firm, sent people flying. In one of the larger hullaballoos to hit the IP world in recent memory, the firm has been accused of ignoring a conflict of interest while representing two parties — G.D. Searle & Co. and the University of Rochester — with competing interests in a dazzlingly valuable patent. Both clients have dropped the firm, one of them reportedly with $4 million in annual billings. Both clients are suing the firm and, given the potential payoff of the patent, neither has apparent motive to settle with Pennie, even for a few million dollars. In all probability, Pennie will have to endure being maligned from both sides. The incident had bruised morale, acknowledges Brian Boissant, a partner on the management committee. But he insists that the firm was not responsible for the loss of attorneys. Remaining associates say that they were satisfied with Pennie’s explanation. “More patent firms, as time goes on, will find out that clients will be getting patents that affect other clients, and you don’t even know it. Those things happen,” Boissant says. The firm says that the main toll was caused by the year’s electric atmosphere and associate-is-king mood. Twelve associates joined dot-coms or other emerging companies. In previous years, Pennie had a salary advantage in its Washington, D.C., and Palo Alto, Calif., offices, where it paid New York rates. Boissant claims that the salary raises for associates at firms in the first half of 2000 prompted a retrenchment. “At that time, we took an opportunity to look at who we were paying the salaries to,” he says. “We reviewed the performance criteria among the associates, and we culled out those who weren’t ones we wanted to stay.” The associates returned the favor by criticizing the firm so fiercely in the American Lawyer survey of associate satisfaction, released in October, that it plummeted to 158th out of 161 firms nationally. “The partnership is so spread out,” says one current associate. “There’s so little communication.” A Pennie foe scoffs at the notion that firm leaders had any choice about the shrinkage: “The IP firms’ problem today is finding people to do the work. You don’t go around culling associates these days. A good associate makes me money. A great associate is even better.” “We’re building back,” maintains Boissant, who adds that the firm has 19 science-trained clerks whom it treats much like junior lawyers. Indeed, he says, Pennie has extended its work for deep-pocketed clients into IP-related business transactions. Pennie, and Fish, will need to be healthy to beat the competition among deal lawyers. That, after all, is the segment of patent and copyright work that the other NLJ 250 firms actually know how to do.

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