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When Joshua Lipp was a young litigation associate at Wilson Sonsini Goodrich & Rosati, he befriended partner Aaron Alter through the firm’s lunchtime jogging community and in 1996 convinced the senior lawyer to let him switch to his corporate team. Two years later, Lipp jumped ship for an in-house opportunity. And in early 2000 — with Alter’s assistance — he became the general counsel at Resonate Inc., a Sunnyvale, Calif., company that Wilson Sonsini had ushered through incorporation and into its first public offering in August. As Lipp rode the learning curve of being top lawyer at the 230-employee company, he leaned heavily on Wilson, and he still considers the firm Resonate’s chief outside counsel. The firm is representing Resonate in a patent dispute the company initiated. But he’s also begun to spread the work around to other firms, including Baker & McKenzie and Brobeck, Phleger & Harrison. Lipp’s departure from Wilson to go in-house is a classic example of what happens when a lawyer leaves a firm to work at a successful client of the firm’s: The power has shifted. Now Lipp is in a position to decide whether to farm out his company’s work to his former mentor and his alma mater firm, or to explore the resources of the many other successful Silicon Valley firms which in the current economy are eager for corporate work. In Lipp’s case, there is the added component of a protege figuring out how tightly to hold onto the hand that led him and when to ease his grip. Lipp says Wilson knows that his decisions on where to farm out work are based on finding the firm with the most expertise in the areas where Resonate needs it. “I don’t stay with them out of a debt, but because they’re good lawyers and they know our company and our business,” he said. Lipp says he relies on Wilson for its business and IP expertise, as well as on matters such as the “obscure benefits question” that recently came up — but he has grown more familiar with all aspects of the company. “Having a firm like Wilson to back me up makes me so much more comfortable,” he says. “I expect I’ll be working with him for years at Resonate,” Alter said. “I sometimes jokingly tell him he just used me as a stepping stone.” And then he joked: “I taught him everything he knows.” Pushed on whether Lipp plans to keep relying chiefly on Wilson Sonsini, Alter keeps on joking. “He better!” And when told about Lipp’s use of other firms, Alter adds, “I’ll have to speak to him about that!” “I think the loyalty factor dissipates over time,” said San Diego-based recruiter Larry Watanabe. “If they had been at a company for three years, over time they’re going to feel more inclined to be more objective about which counsel might be best for a particular matter, but it’s going to vary from person to person.” THE PATH INSIDE Though Lipp had always imagined himself as a litigator, a few years with Wilson Sonsini’s litigation department quickly disabused the 1992 Boalt Hall graduate of the notion. “I think it was mostly my personality,” he says. “I enjoy working with other people to build something new. With litigation, a lot of time you’re fighting over something that happened in the past.” Once he moved into Alter’s corporate group, Lipp found that he loved the thrill of working with business teams to craft new ventures. But by his own assessment, he would get too attached. “You build a relationship with people, and I felt somewhat left out when the company moved on,” he says. “For me, going in-house was a way to be part of the team.” Lipp first went in-house to the 25-employee, San Jose, Calif.-based MindMaker Inc. in 1998, before the lawyer exodus that sparked the law firm salary wars a couple of years later. Then, last summer, Alter played matchmaker with Lipp and Resonate, which was on the brink of its IPO. “Aaron (Alter) has been Resonate’s corporate counsel since the beginning, and to my utter and complete frustration the minute I shook hands with him he proceeded to hand everything over to his junior associate Josh Lipp,” joked Resonate founder Chris Marino, who said the upshot of that relationship was that Lipp knew the company and that the executives liked him. At Resonate, Lipp’s office is next to the company’s Ping-Pong table. In the adjoining two offices sits his entire staff: Michelle Stella, his contract manager who attends law school at night, and Sorrell Johnson, his stock administrator and a former Wilson Sonsini paralegal. Lipp’s “clients” now are the company’s chief departments, whose meetings he tries to sit in on as much as possible. He drafts non-disclosure agreements for the sales team. He counsels on employment issues for human resources, on trademark issues for marketing, on patent issues for engineering, and on revenue recognition issues for the finance department. He spends much of his time trying to anticipate areas where his legal expertise should be applied before problems crop up, and gleaning information about departmental activities while jogging the trails near Resonate’s Sunnyvale offices with an ever-changing lineup of co-workers. Alter says that while he was initially surprised when Lipp left the firm, he sees that he’s at home in an executive management position. “He was on track here and doing great in my group, but what makes him a superb in-house counsel is that he had been a litigator first, and then in corporate, and had all of those sensibilities,” he said. “Often a GC will come out of one of those areas, and then need to ramp up.” And while Lipp says his temperament is indeed more suited to the in-house lifestyle, he sometimes misses the fellowship of corridors full of lawyers. “The difficult part for me (of going in-house) was that I actually liked my job at Wilson,” he said. “It was a difficult decision to give up that security and enjoyment, and I miss that level of legal discourse on a day to day basis.” But at Resonate, Lipp can usually get home to Redwood City, Calif., in time to make dinner for his wife and 2-year-old daughter, which was nearly impossible for him as a Wilson associate.

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