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A new electrified sign just off Interstate 5 blaring one word — Brobeck — stands as an enticing advertisement of the new-economy revolution sweeping through San Diego’s legal community. Brobeck, of course, is Brobeck, Phleger & Harrison, the San Francisco-based firm that strenuously focuses on emerging markets. In San Diego, Brobeck and Palo Alto-based Cooley Godward have capitalized on the emergence of a lucrative silicon scene, a success seen most clearly in Brobeck’s new building in a tech mecca about 15 miles north of downtown. The recently opened, 72,300-square-foot building is a lavish testament to the good life Brobeck is enjoying. In the lobby, a holographic projector shoots the firm’s name alternately on the blond wood walls, stone floor and high ceiling of the foyer. Immediately to the right of the reception desk is a room containing the firm’s computer equipment, on display like modern artwork through a wall of glass. Up the curved, concrete and stainless steel staircase are a conference room resembling the United Nations in miniature and a movie screening room for late-working associates. The d�cor fairly screams, “We’re so high-tech, you’d be a fool not to hire us!” A few short years ago, the northern slip of San Diego County that is home to Brobeck’s slick showcase was populated by a few life sciences companies spawned by the research community at the nearby University of California at San Diego and some pioneer tech ventures — Qualcomm Inc. chief among them. Today, the landscape, reverently referred to as the Golden Triangle, looks like one big, shiny business park dotted with telecommunication, wireless, Internet and biotech enterprises. It’s Silicon by the Sea. The growth has had a profound effect, splitting the local legal industry into two distinct classes. The go-go firms like Brobeck and Cooley mimic the Silicon Valley practices from which they sprang, moving in near their rich clients and professionally distancing themselves from the traditional, full-service downtown San Diego practices. Their business has exploded in the past several years. “There is a mass sea change in the San Diego market, and I think it will continue,” said Larry Watanabe, a legal recruiter with San Diego’s Watanabe & Nason. But not all of the law business is rocketing. Old-line San Diego firms — Hillyer & Irwin; Luce, Forward, Hamilton & Scripps; and Procopio, Cory, Hargreaves & Savitch — have seen their power base erode as many of the industries that once ruled San Diego lessen in prominence, including defense contracting, savings and loan, real estate and construction. The local firms are getting plenty of business, but they are having a hard time keeping up with the growth pace set by firms dedicated to tech clients. When Michael Rhodes, a partner in Cooley Godward’s litigation department, moved to San Diego in 1992 to open the firm’s Golden Triangle operation, it was a gamble. Within a short time, Cooley took about five companies public, including Qualcomm. “Our perception was, ‘Gee, there must be a developing technology belt here in San Diego,’” Rhodes said. “And then the world began exploding underneath us.” The trim, blonde Rhodes, whose office attire sometimes includes a black turtleneck and black jeans, personifies the new legal order in San Diego, both in manner and practice. He’s known for being dogged, whether working on a case or a surfing vacation. Recently, Rhodes has been busy with MP3.com Inc., a San Diego-based digital music company under fire from the Record Industry Association of America for allegedly infringing the copyrights of major record labels. Following a finding of infringement against MP3 for its downloadable database, the company has discontinued access to part of its service as it grapples with the nuances of ownership in cyberspace. As it helps define the law of the high-tech economy, Cooley has — alongside Brobeck — climbed to the top of the local law firm order, at least in terms of momentum, partners in those and other top firms agree. The same attorneys say Gray Cary Ware & Freidenrich is approaching rapidly, thanks to an aggressive reformation, in which it jettisoned practices it perceived would not benefit a tech-centric operation. The three firms all report phenomena prominent in the Silicon Valley: an overabundance of business, the collection of equity in start-up enterprises — in addition to client fees — and problems recruiting and retaining quality attorneys. And as with their Silicon Valley counterparts, a key to the success of Cooley and Brobeck is their symbiotic relationship with venture capitalists. If their heavyweight venture pals, such as Enterprise Partners — San Diego’s largest fund — pass on a particular prospect, there’s a good chance they’ll pass on the potential client as well. Conversely, if the law firm is approached by a promising start-up, it will tip off its favorite venture fund. Martin Nichols, one of about 40 business partners in Brobeck’s San Diego office who focus on emerging growth and information technology companies, said business has been exploding since 1995. When he arrived at the office in 1991, there were seven or eight corporate lawyers. “We were just a little more than an underdog then,” Nichols said. Since then, there has been a steady increase of companies growing in or moving into the area, which has recently attracted high-profile transfers such as the corporate headquarters of Gateway Inc. computers. Large information tech companies include Unisys Information Technology, GE Capital Information Technology Solutions and Extex Information Services Inc. Electronics manufacturers include Science Applications International Corp. and Sony Corp. Software ventures include The Titan Corp. and Data Works. Other promising ventures calling San Diego home include PacketVideo Corp. and CollegeClub.com. “The market is booming, and business has never been more abundant. We are riding the wave, so to speak,” said Paul Kreutz, a corporate securities partner who in 1994 helped open Gray Cary’s Golden Triangle office — which now has 60 lawyers, in addition to the 97 stationed downtown. “The real issue for San Diego is can we ride the wave without all the problems of Silicon Valley.” KEY DIFFERENCES Kreutz and other partners in the top tech firms say that for all of its growing similarity to Silicon Valley, there are some key differences in the San Diego market, mainly attributable to its more gradual growth curve. For years, Kreutz said, tech start-ups that sprung from giants like Qualcomm and evolved from the research community around UCSD had a hard time attracting attention from venture capitalists. The relative isolation prompted the building of an infrastructure of resource networks, such as UCSD-Connect, an information clearinghouse for anyone wanting to find, start, fund or sell a tech start-up. Kreutz said he thinks this sort of networking has alleviated many of the problems that crop up in the more haphazard growth of Silicon Valley. That’s not to say the law firms are growing slowly. Brobeck, which moved its 80-plus attorneys out of offices downtown to the firm’s new space in February, says the building’s capacity for just over 100 lawyers will be exceeded by the end of the year. Even before its June 15 grand opening celebration, the firm is eyeing the tract of land next door for another structure. Cooley has built its north county operation to about 50 business attorneys and 20 litigators. Luce, Forward, on the other hand, lags in terms of tech work when compared to Brobeck or Cooley, lawyers in those firms agree. The 147-lawyer Luce, however, continues to thrive in its representation of more traditional clients, such as the city of San Diego, UCSD and Jack-in-the-Box. “Look, Luce still has the largest downtown office in San Diego. They are doing very, very well, but when you are talking about technology, everyone [clients] is gunning for Brobeck and Cooley,” said Watanabe, the recruiter. Gunning, perhaps, but not always successfully, since the top tech law firms are enjoying the privilege of picking a minority of the clients requesting their services, leaving lots of work for other firms, such as Luce. Luce insists, of course, that it gets more than just the leftovers. Margaret Mann, a commercial litigator and member of Luce Forward’s executive committee, said the firm has six or seven business attorneys working in the tech arena and has a satellite in La Jolla. Further, Luce Forward pitches itself as the firm to handle complex issues that arise once a start-up grows feet and takes on the attributes of a more mature corporate structure. Luce Forward, which counts among its clients computer giant Seagate Technology, is kicking off a new advertising campaign — “Are you ready to play in the big leagues?” — that extols the firm’s commitment to the tech sector. At the same time, Mann and other senior partners say the firm is dedicated to remaining full service, eschewing an exclusive devotion to new-economy clients. “We think a broader focus is far more sustainable,” Mann said. If firms like Luce are nervous about having partners and associates poached by the tech-focused firms, they try hard not to show it. In fact, Luce partners appear to take the departures in stride, joking that when the firm holds an alumni event, the event is attended by, in addition to judges and politicians, top legal talent now with the tech-focused firms. “What you have is a lot of new firms entering the region because the tech work is truly noteworthy, but there is a somewhat limited talent pool,” said Watanabe. “You have a lot of disruption in the legal market.” One of those disruptions is associate pay. Until this year, associate salaries were lower in San Diego than in busier urban centers. That changed when the big San Diego players matched raises set by Silicon Valley firms. When the recreation-friendly climate is coupled with the silicon-driven salaries, San Diego gets more looks from young lawyers in other markets, several firms report. Beyond Cooley, Brobeck and Gray Cary, San Francisco-based Heller Ehrman White & McAuliffe; Morrison & Foerster; and Pillsbury Madison & Sutro are gaining some respect in efforts to break into the San Diego tech scene. But many firms, such as the L.A.-based Latham & Watkins and Sheppard, Mullin, Richter & Hampton, seem content to cater to more traditional clients. Latham, with about 80 attorneys downtown, arrived in San Diego in 1980 to serve national clients, in particular, defense contractor The Signal Companies. The office has grown steadily on a diet of high-end business work and runs the firmwide project finance practice and environmental practice. Likewise, Sheppard has fared well in San Diego, growing to about 45 attorneys since arriving in 1986. As well as servicing national clients, it picked up the slack when Gray Cary scrapped most of its local labor and employment practice.

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