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What a difference a year makes. In the first quarter of 2000, venture capital was flooding into Northern Virginia and scores of local technology companies were poised for public offerings. Law firms were right there, paying top dollar to secure office space and hire scarce corporate lawyers. Today a pall hangs over law practices in the once-bullish tech corridor. Local tech attorneys concede that business is down and their offices may struggle — in the short term. “It’s going to be harder to get clients. It’s going to be a riskier proposition with respect to getting paid. And it’s going to be a challenge for all of us to grow our practices as we’d expected,” acknowledges David Sylvester, head of the local corporate practice at Boston’s Hale and Dorr. He adds, “We think that Northern Virginia is clearly still a viable market. But I think it’s going to be quite a different place for the short term.” At firms like Morgan, Lewis & Bockius and Akin, Gump, Strauss, Hauer & Feld, which started planning to open sizable Northern Virginia offices during the heady days of 1999 and early 2000, attorneys say they will stick it out through the downturn. For now, some lawyers swear by biotech; others claim that venture capital is still flowing into telecommunication infrastructure plays. Some even predict that a business slump will increase work in countercyclical areas like litigation, bankruptcy, and employment. One thing is clear: No one is happy with the current market climate, but no one is giving up on Northern Virginia yet. “I think everybody is taking a breath and waiting to see what happens,” says Steven Meltzer, co-chair of Shaw Pittman’s technology group. “I’m here for the duration of my law practice, and I don’t ever plan to hang it up and go back to Washington.” As a longtime player in Northern Virginia’s tech community, Shaw Pittman is among those firms well-positioned to weather a downturn, says Meltzer. Even between Thanksgiving and Christmas — among the slowest periods since the firm opened in Tysons Corner — the group closed several financing deals, he notes. Late last year, Shaw Pittman took on new office space to accommodate up to 120 lawyers. “We’re doing well, and I’m optimistic. We feel like we ought to continue to attract the best companies,” says Meltzer. But Meltzer sees problems ahead for firms that came into the market too late and without a solid client base: “In any boom market, you get an excess of folks running in, and it will be a challenge for them to maintain momentum.” Those who leapt into the market at its peak defend the timing of their moves. “We have great confidence in the marketplace over the long term, and we think we belong there,” says Morgan, Lewis partner Robert Smith, who will head the Tysons Corner office slated to open in May. “It’s not like we’re moving 3,000 miles across country to set up an outpost when our principal office is in Silicon Valley.” “I don’t recall ever being in a conversation with anybody where they said we should pull back from Northern Virginia and wait a year,” adds D.C. managing partner Michael Kelly, a member of Morgan, Lewis’ firmwide management committee. Akin, Gump chairman R. Bruce McLean also says his firm is enthusiastic about its new Tysons Corner office. “We’re in this with a broader focus than just taking startups to IPO. If you’re in that business, this is going to be a hard time,” says McLean. “Our strategy in Northern Virginia and firmwide has been to provide diverse services to mature and emerging technology companies.” Indeed, the bulk of those firms planting stakes in Northern Virginia generate most of their revenue from established corporations, not high-tech startups. Although they may be disappointed by their profits and may even close shop if a full-fledged recession hits, it’s unlikely that any of them will see more than a blip in overall firm finances. Few say the market has lost its allure all together. Jonathan Aberman, managing partner of Pillsbury Winthrop’s Northern Virginia office, explains: “If you believe that the economy has changed forever, you have to believe that a technology practice will continue to be relevant over the long haul. If you believe something has fundamentally changed in the local economy, you have to take a long-term view.”

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