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Instead of ordering a round of Plexiglas tombstones to celebrate their deal, executives at one of John Wilson’s clients commissioned a caricature of the lawyers who were on the team. In it, Wilson, Shearman & Sterling’s new managing partner for the San Francisco Bay Area, was portrayed as a Boy Scout. The fresh-faced, short-panted persona has dogged the 49-year-old Wilson throughout his professional life. “I have this All-American boy image,” Wilson said. Presented to him several years ago while he was in London, the cartoon now hangs in Wilson’s San Francisco office. And Shearman hopes that Wilson does Silicon Valley the good deed he did in Europe, making the firm a major player. Shearman has had a rough time in California. Last summer, four corporate partners from the West Coast offices, including the former managing partner, quit to join competing law firms. In the past year, work from its staple client base, investment banks, has dropped dramatically and the firm isn’t considered a player among executives at Valley tech companies. Add to that the worst economic downturn in recent memory and the Sept. 11 terrorist attacks, which further crimped business, and Wilson has his work cut out for him. But Shearman isn’t about to throw in the towel on Silicon Valley, where nine of the nation’s 10 largest firms have outposts. And for Shearman, the fifth-largest U.S. law firm, the Valley and San Francisco offices have always been profitable, at least until recently. Firmwide, Shearman logged $590 million in revenue last year and $1.35 million in profits per partner. The firm won’t break out revenues by office, but its efforts in the past year to shore up the flagging California offices suggest the revenue is there. “We’re here for the long term, but I think the current economic conditions really raise questions about how fast we should grow and which areas we should invest more heavily in,” Wilson said. Wilson has to tap new revenue in the West Coast, chiefly by catering to companies instead of investment banks. That means hiring lawyers to expand what the firm can offer companies. Wilson arrived in July with some ambitious plans for hiring local lawyers and marketing the firm to would-be clients. Since the terrorist attacks, he’s adopted a more measured pace and plans to study the market before hiring. Still, the firm is continuing to look for a high-profile, home-grown tech lawyer with deep ties to venture capitalists. How the firm expands its Bay Area offices beyond that could depend on the person he hires, Wilson said. Wilson has focused on shoring up the firm’s current team. In the first two months of his tenure, he met with each associate in the San Francisco and Menlo Park, Calif., offices. Wilson also staged a meeting with associates to outline for them the problems the firm faces in the West Coast and his goal to make Shearman better known among technology executives. He instituted an education series for the associates, putting them in teams with partners to create sessions devoted to such training topics as deal documentation and intellectual property litigation. Wilson is the most recent in a series of remedies Shearman has applied to its ailing West Coast offices. He made a name for himself inside Shearman in Paris and London during the firm’s European expansion in the past decade. While there, he amassed a huge book of business and signed on clients like Nokia Corp. and STMicroelectronics NV. Last year, Shearman trucked out five partners and seven associates from the East Coast and Canada, including Bruce Czachor, who is a co-managing partner in the firm’s Menlo Park office. When Czachor arrived, he managed six lawyers in the office and now has 30. In San Francisco, Shearman has another 25 lawyers. Among the 55 total lawyers in the Bay Area, which include 10 partners, are seven intellectual property lawyers and three employee benefits lawyers. The rest are corporate lawyers. Czachor said other practice groups, like leasing and restructuring, are borrowing Bay Area corporate lawyers while work continues to be slow. Shearman is also looking to revamp its workouts and restructuring groups, which would mean retraining some corporate finance associates. “Just as in the dot-com heyday, there was a movement of lawyers into the capital markets, and now it’s just the opposite,” Czachor said. The East Coast transplants also included Peter Lyons, a high-profile partner who heads Shearman’s mergers and acquisitions group. He was charged with reassuring clients and the remaining lawyers in the office that Shearman wasn’t pulling the plug. But he also had to figure out how Shearman was going to rebuild as the economy continued to spiral. The answer was not capital markets work, which was a specialty of the firm but had fast dried up. The firm would have to target technology companies, Lyons said, and that meant adding new practices. “A broad-based approach was ultimately a better bet,” Lyons said. “Even in the best of times, it should have been clear to all of us. “If you look at the companies out there, their IP is the most important asset they had,” Lyons said. Not having any intellectual property capacity on the West Coast, he said, “was the biggest hole we had.” The strategy has worked for Weil, Gotshal & Manges in Palo Alto, Calif. The New York firm’s outpost consists of some 50 lawyers, and all but nine of them are IP lawyers. Matthew Powers, the managing partner of Weil’s Valley office, said Shearman’s success in emulating his firm’s approach will depend on hiring people with deep ties to the Valley and by tailoring the services to what Valley companies need. “They really have no historical presence in [the IP] area, and people don’t know them for that,” Powers said. ” They’ll have that to overcome that.” In the past year, Shearman hired two intellectual property partners from the Palo Alto outpost of IP boutique Fish & Neave. One of them, Edward Mullowney, was the office managing partner. He ended a 21-year tenure with Fish to join Shearman in January. He followed by three months Vickie Veenker, a 12-year Fish veteran, who started in October 2000. “My mission is to set up a full-service IP group in the West,” said Veenker. Shearman’s IP litigation team is already working on a case Mullowney brought him, representing Incyte Genomics Inc. in a patent battle with Affymetrix Inc. The firm has also been retained recently in another large-scale patent infringement case involving a life science company, but Veenker couldn’t give any details. Understandably, Veenker said she was dismayed by the departures. But the firm’s responses, like relocating partners — especially the likes of Lyons — to the West Coast, suggested it was still committed. “I could be part of the solution instead of just being an add-on specialty,” she said. For Veenker, Wilson’s transfer was another signal of the firm’s commitment to expanding its services for tech clients. Wilson came armed with some transactions to put people to work and he’s adept at co-marketing Shearman’s fledgling IP practice to corporate clients. “He really puts a premium on collegiality,” said Veenker, “and I think that’s going to really help foster the kind of mood that will help the group grow.” That Boy Scout-style teamwork may go a long way, but Wilson harbors no illusions about the challenges ahead. “It’s not going to be easy,” he said, particularly as the economy continues to be uncertain. “The real question is one of timing — just how much are we going to be able to accomplish as long as this goes on.”

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