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How do you join the technology firm glitterati when most of your competitors think of you as an old-economy workhorse? Try handling the largest tech merger in history. Last week, San Francisco’s Morrison & Foerster helped fiber-optic powerhouse JDS Uniphase Corp. sign a deal to acquire SDL Inc. for a cool $41 billion. And MoFo did it in a decidedly techie way. The firm had represented Uniphase in its pre-IPO, start-up days and ushered it through a merger with Canada’s JDS last year. Since then, the firm has been helping JDS with strategic deals around the world — not unlike the relationship San Francisco’s Brobeck, Phleger & Harrison has had with Cisco Systems Inc. It also doesn’t hurt that JDS Uniphase’s general counsel is a MoFo alumnus. The deal highlights MoFo’s growing position as a contender in the technology sector. For the last three years, partners have been making over the firm in hopes of tapping into the gusher of cash spurting not only from Silicon Valley but from emerging tech markets around the globe. They contend their firm ranks among the Bay Area’s tech elite — a club that includes such firms as Brobeck and Palo Alto’s Wilson Sonsini Goodrich & Rosati — and is poised to become a global technology titan. “Five years ago, Morrison was known as a large, high-quality, diversified firm,” said partner Robert Townsend, who heads the firm’s business department. “We knew we had to focus more in the competitive area.” On some levels, the strategy has been working. The firm has scored deals like the JDS, SDL merger and recently represented Verio Inc. in a $5 billion offer for the company by a Japanese conglomerate. MoFo also ranks among the top 10 U.S. firms handling initial public offerings. Yet the firm is struggling to overcome its image as a Johnny-come-lately to the tech scene. Despite its appearance on major deals, MoFo was not among the top 25 firms handling mergers and acquisitions last year. As a result, some Silicon Valley tech firms continue to regard MoFo as a second-tier player. They say MoFo’s disparate practice areas, such as banking and real estate, prevent it from being a true technology firm. And MoFo is about as old-line San Francisco as you get. With a history practically dating back to the Gold Rush, the Financial District institution has potent ties to the city’s political and economic elite. It’s a judge machine — producing four in the last year — and is reliably liberal in a town that likes its power players that way. All of which spells old-fashioned to competitors in the Valley. MoFo has “a diluted brand, a diluted image,” said a top partner at a competing firm. The partner, like many competitors contacted, would not speak for the record to criticize MoFo and emphasized that the firm is held in “high regard.” Not surprisingly, MoFo managers disagree with their competition’s assessment of their status. Townsend, however, acknowledged that “perception is trailing reality.” CORPORATE BOOM MoFo’s evolution as a tech player in the corporate arena began in January 1997. At that time, the business department developed a strategic plan to focus on technology and emerging companies. While MoFo had begun to establish a leading corporate technology practice in New York, firms such as Wilson; Brobeck; Cooley Godward; Gray Cary Ware & Freidenrich; and Fenwick & West were handling the bulk of the big transactions in its backyard — the Silicon Valley. In response, the firm has transformed itself from one focused historically on litigation to “more of a business firm,” said Gavin Grover, co-chair of the corporate group. During the last 2 1/2 years the business department has grown 74 percent, from 275 to 450 attorneys, including 215 lawyers in the corporate group, 61 in the technology transactions group and 43 in the IP group. At the same time, Townsend said the firm’s corporate work for technology companies — M&A transactions, securities offerings and venture capital financing — has more than doubled. While the firm handled 60 transactions valued at $2.7 billion in 1998, last year it handled 40 deals valued at $22.4 billion. Even so, MoFo still lags behind other tech firms. It failed to make The American Lawyer magazine’s 1999 list of top 25 firms handling M&A transactions, while Wilson ranked third, Brobeck 13th and Fenwick & West 20th. However, MoFo’s deal pace has continued to climb through the first six months of this year. The firm served as counsel on 41 deals valued at $26.8 billion through the end of June — more than the entire deal value for all of 1999 — and that’s not counting the JDS deal. By comparison, Wilson closed 102 deals valued at $59.5 billion, and Brobeck closed 63 deals valued at $44.8 billion. While the deal numbers provide a concrete measurement of the firm’s technology work, MoFo chairman Stephen Dunham said they reflect only a portion of the firm’s technology practice. If you look at the broader representation of technology companies — in IP litigation, patent work, technology transactions, licensing — “taken together these are the areas where we have breadth that others don’t,” Dunham said. GLOBAL FOCUS MoFo’s litigation department has led the way in building the firm’s technology focus. The firm’s litigators gave MoFo its entr�e into both the IP arena and the Japanese market. In 1985, MoFo began representing Fujitsu Ltd. in a copyright dispute with IBM Corp. IBM claimed to have a copyright on mainframe operating systems. MoFo partner Harold McElhinny, who worked on the case for several years, said it was his introduction to IP litigation. “When I came back to the United States from the Fujitsu case, I was an IP lawyer,” he said. The firm set up an office in Tokyo in 1987 and continued to represent Fujitsu and a number of other technology companies. In the early 1990s, MoFo decided that IP was the wave of the future and established an IP practice. The firm acquired the patent boutique Ciotti & Murashige in 1991 and cast off its image as an old-line banking firm. Michael Jacobs, who established the IP practice with William Schwartz, said the two had an “epiphany moment” in the early 1990s during a meeting with an English lawyer. “He said: ‘We may have needs for banking work. Could your firm handle that?’” Jacobs recalled. “Schwartz and I gave each other mental high fives.” As the IP practice evolved domestically, the firm was also building a global presence, opening offices in London, Brussels, Singapore, Beijing and Buenos Aires. The firm’s initial work outside the United States focused on project financing and investments. For example, MoFo set up an office in Hong Kong in 1982 to handle work for Crocker Bank, at one time MoFo’s biggest client. Pamela Reed, MoFo’s firmwide managing partner for operations, said a key decision was made at a partners retreat several years ago. “We asked, ‘If we took $5 million, what would we want to do with it?’” Reed said. The decision was to concentrate on the global market and the technology area. “The pieces were already there,” Reed said. It was a matter of “bringing together all the pieces of the puzzle, the groups in the business and litigation departments.” Dunham said more than 30 percent of the firm’s $321.5 million in revenues last year came from international business. The work includes IP litigation, project financing and a growing number of tech-related mergers and acquisitions, joint ventures and venture financing. For example, the firm’s Tokyo office closed more than 30 acquisitions and strategic alliances in the first half of 2000. They include the $5 billion Verio deal and MoFo’s representation of Softbank Corp. in its joint venture with the National Association of Securities Dealers and Vivendi to establish Nasdaq-Europe. MoFo believes having offices in Asia gives it a competitive advantage. “Investment banks and large technology companies are not interested in doing business with a firm that does not have an office in Tokyo,” Kenneth Siegel, managing partner of MoFo’s Tokyo office, said. GLOBAL BUT LOCAL But other Silicon Valley firms say a lack of foreign outposts hasn’t hindered them. Thomas Shoesmith, who coordinates Cooley Godward’s international practice group, said Cooley has a dozen lawyers who exclusively handle international business, but they are all based in the U.S. The work includes cross-border private equity transactions and assisting Internet companies with joint ventures. Wilson also has a significant international practice. A 1999 listing of top foreign deal makers by The American Lawyer includes Wilson, along with several New York firms, as the primary counsel for foreign companies in equity offerings. “We’re turning down huge amounts of work from Asia, not because we’re not there but because we don’t have the bandwidth,” said Carmen Chang, the head of Wilson’s Asia practice group. She noted that her Palo Alto-based group represents about 60 companies and most of the venture funds in Asia. While MoFo isn’t on the international charts, it’s handling an increasing amount of tech work. The Hong Kong office represented Asiacontent.com and Netease.com when they went public this year. And the Buenos Aires office, which was set up in January 1999 to handle a project for an energy client, has garnered an increasing amount of Internet-related business. Some, like Joel Henning, senior vice president and general counsel of the consulting firm Hildebrandt International, believe MoFo’s international outposts give it “an increasingly important leg up. “He added that “the Wilson Sonsinis of the world have depth, but breadth will become increasingly important in coming years.” That’s music to MoFo’s ears. “The two most important trends in the world economy are growth of technology and globalization of business generally,” Dunham said. “We are situated to capitalize on them.” And for MoFo’s clients, the ability to straddle the globe can be a selling point. Take, for instance, JDS Uniphase. Michael Phillips, JDS general counsel and a former MoFo partner, said the firm’s international capabilities have helped JDS with several international deals. “Their ability to deal with international issues on these multinational transactions is very important to us,” Phillips said. “I don’t know of another local firm with such breadth in Asia, and that’s very helpful.”

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