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Mike Morris is angry. Not in a table-pounding, in-your-face kind of way. His anger is much more controlled than that — and just as unnerving. When he speaks, the volume doesn’t rise, but the speed with which the words come pouring out accelerates. You wonder when — if — he will stop for breath. What’s got Morris irked on this otherwise cloudless spring day in Palo Alto, Calif., is a software company headquartered some 850 miles to the north, in the Seattle suburb of Redmond: Microsoft Corporation. Weeks earlier, the world’s largest software maker unveiled the first piece of its breathtaking .NET Internet strategy: to sell storage services to consumers and businesses. Using a subscription model, users will be able to store and transfer information on any electronic device, from personal computers and handhelds to cell phones. In March, Microsoft rolled out HailStorm, the chunk of .NET dedicated to consumers. Services targeting businesses are due out later this year. The rollout gave Morris, the general counsel of Sun Microsystems Inc., his first real whiff of the future. And he doesn’t like the smell one bit. In his eyes, even after the recent appeals court decision, Microsoft is up to its old tricks again. First, it was able to leverage its dominance over the PC desktop to monopolize the Internet browser market and to build market share in the server business, Sun’s mainstay, says Morris. Unsated, Microsoft is now after “the vig,” a loan-sharking term for a cut of every transaction that occurs on the Internet. “That’s where they’re going, and — this is the amazing thing — they haven’t been particularly shy about it,” warns Morris. Consider the code name — HailStorm. “You would have thought,” says Morris, “just from a public relations/marketing point of view, they would have picked something like ‘Spring Mist.’ “ These are fighting words, coming from a Fortune 500 general counsel. But Morris is hardly an idle observer. As Sun’s top lawyer, he battled Microsoft for years while the two companies went head-to-head in the markets for operating system software, commercial servers, and now Internet services (Sun has partnered with America Online, Inc., now AOL Time Warner, to develop Web products). More than that, Morris has emerged as one of Microsoft’s chief nemeses. It was he who helped orchestrate a massive behind-the-scenes lobbying effort to get the U.S. Department of Justice and 19 states to sue Microsoft for abusing its market dominance. It was Morris who masterminded a multimillion-dollar covert operation that brought leading antitrust lawyers and economists before government watchdogs in the month before their suit was filed in May 1998. And it was Morris who pushed hard for an order to break up Microsoft. Unfortunately for Morris, his jihad faltered when, on June 28, the U.S. Circuit Court of Appeals for the D.C. Circuit overturned district judge Thomas Penfield Jackson’s order calling for Microsoft’s breakup. But even in the face of defeat, the GC is not waving the white flag. Feistier than ever, Morris has teams of Sun lawyers and lobbyists working Capitol Hill and meeting with state regulators in the hopes of trumping .NET. “Microsoft is a long way from being out of the woods here,” warns Morris. “It would be a mistake for [anyone] to think that they are.” Such outspokenness is vintage Morris — and classic Sun, which is known for its machismo and independent streak. This spring, for example, Sun IP counsel Ken Olson launched a one-man crusade to hold back law firm associate pay hikes, threatening to withhold business from firms that went along with the round of raises triggered by San Francisco’s Brobeck, Phleger & Harrison ["Hell No, We Won't Pay," April]. In response, Brobeck chairman Tower Snow met with Olson and Morris to make nice — and defend his firm’s billing rates. That brash culture permeates Morris’s 200-lawyer department, where staffers enjoy a lot of autonomy, work hard, and freely speak their minds. They air common corporate-counsel gripes: There’s a lack of communication; advancement within the department can be difficult, given how few spots there are at the top. They also feel the tremendous pressure that comes from being a cost center, a drain on the bottom line that seems more acute in this sluggish economy. Morris, however, enjoys near-universal respect among members of his crew. Short, with a round paunch and a quick gait, he is described by lawyers who’ve worked for and with him as uncannily bright, devoid of pretense; a straight shooter who is, nonetheless, a master of realpolitik. He’s known to have fierce opinions on everything from baseball and politics to the roots of the current economic malaise (the real cause wasn’t so much the dot-com bubble as it was the larger, surrounding bubble created by voracious technology buying across industries, he says). Theodore Borromeo, Sun’s director of employment law, says that Morris has succeeded in Sun’s pressure-cooker environment because he’s a quick learner. “He has to be,” says Borromeo. Morris’s career has followed a typical Silicon Valley trajectory, although it got off to an atypical start. A native midwesterner, Morris began his career as a commercial litigator practicing in sleepy St. Joseph, Michigan, following his 1974 graduation from the University of Michigan Law School. Five years into it, he got a job offer from a law school friend who was the general counsel at ROLM Corporation, a Santa Clara manufacturer of minicomputers and, at the time, a Fortune 500 company. Morris accepted on the understanding that he would eventually take over as the company’s top lawyer. A tantalizing career opportunity wasn’t the only impetus for moving west. Openly gay and a dyed-in-the wool liberal, Morris, then 30, was drawn to the Bay Area’s laid-back lifestyle. As he quickly discovered, however, his new home wasn’t free from stereotyping. His first year in San Francisco, he says, he was thrilled by the unabashed revelry on display at the city’s annual Gay Pride Pride (as it was then known). But when he got home that night and turned on the local news broadcasts, all he saw was footage of transvestites and leather-clad men — not the thousands of gays dressed in jeans and T-shirts. Morris complained to the news station. Before long he was on national television, voicing his concerns to an audience of thousands. Morris continued to be outspoken. He assumed the general counsel job at ROLM in 1981. Three years later, however, ROLM was sold to International Business Machines Corporation. Not interested in serving as the top legal dog at a Big Blue division, Morris jumped to a telecommunications startup (“you ought to do a startup at least once in your life”) where he remained until Sun came calling in 1987. At the time, Sun was barely five years old and strictly a workstation manufacturer. The company already had two senior in-house lawyers, neither one of whom fit the general counsel bill. So, at the recommendation of Larry Sonsini, legendary cofounder of Palo Alto’s Wilson Sonsini Goodrich & Rosati, who served as the main outside lawyer for Sun and ROLM, Morris got the job. Sonsini says that Morris had an aptitude for business and, besides, didn’t meddle with outside counsel. “He doesn’t micromanage,” explains Sonsini. Morris’s brazenness flared even before he took the job. The two deputy general counsel who had been passed over were also on the committee set up to interview GC candidates. As a result, according to Morris and Michele Huff, a former Sun licensing lawyer, prospects for the slot weren’t getting very far. A candidate for the GC spot, Morris circumvented the process by telling Sun’s then-CFO, Joe Graziano: “I’ll make this easy on you. I won’t talk to those [two] unless you introduce me as their general counsel.” Although that’s what happened, it didn’t make Morris’s early days on the job any easier. For one thing, the two lawyers were in no mood to help out their new boss, according to Huff, who is now vice president of business development at Palo Alto-based Kalepa Networks, Inc. One of them, she says, responded by isolating his staff from Morris. “It was, I think, a difficult time for him,” says Huff. She credits Morris with easing the tension by asserting himself quickly and by giving the two lawyers the support and space they needed to take on new duties at Sun. Morris confirms this and notes that both lawyers remained at the company for several more years. Morris, according to Huff and others, also did a good job of integrating himself into other parts of Sun’s hotheaded, fiercely independent culture, where people “essentially ask for forgiveness and don’t ask for permission,” according to Borromeo, the in-house employment lawyer. More importantly, explains Huff, Morris “had a nice way of getting Scott’s ear” — a reference to Sun’s hard-charging, quixotic cofounder, chairman and CEO Scott McNealy. In many respects, Morris’s leadership style is “reflective of Scott’s personality,” explains Andrew Steinberg, a friend of Morris’s since 1997 and the general counsel of Dallas-based Travelocity. Morris doesn’t report to McNealy. He answers instead to the company’s chief financial officer. And although Morris works in an office building separate from the executive team (which is housed in a converted insane asylum in nearby Santa Clara), he’s become an integral part of Sun’s operations. His role, according to Sun board member M. Kenneth Oshman, isn’t to handle day-to-day operations but to provide constant input on the legal ramifications of any business decision. He’s also proven to be a peacemaker. Oshman recalls a time, in the early 1990s, when he was on the verge of quitting the board over a combination of personality differences and too many commitments. Morris, on his own initiative, took Oshman to lunch and did the hard sell that convinced him to stay. “Mike doesn’t view himself as just a lawyer,” says Oshman, who cofounded ROLM and is now chairman and CEO of Sunnyvale, Calif.-based Echelon Corporation. It was that jack-of-all-trades approach that spurred Morris into action when he met Roberta Katz, Netscape’s then-embattled general counsel, in early 1997. At the time, Katz, along with Gary Reback and Susan Creighton of Wilson Sonsini, were waging an exhaustive and lonely battle to get government regulators to punish Microsoft for what they saw as a flagrant attempt to kill Netscape’s Web browser. Netscape’s decline paved the way for Microsoft’s own Internet Explorer to become the industry standard. Morris became aware of Katz’s crusade through Wilson Sonsini, which also represents Sun. The details of Microsoft’s alleged transgressions against Netscape didn’t totally surprise Morris. By then he was having problems of his own with Microsoft over the Sun programming language Java. In the mid-1990s, Microsoft and Sun entered into a licensing pact concerning Java, but the relationship quickly soured after Morris and other Sun executives suspected that Microsoft tweaked the Java code so that it worked only on machines running Microsoft’s Windows operating system. Signing onto Katz’s crusade was a no-brainer for Morris. Sun’s resources and its combative nature made for a perfect Microsoft foil. Besides, says Larry Sonsini, Morris “got a directive from McNealy.” Soon, Steinberg, who was then the general counsel of SABRE, the Fort Worth, Texas-based online flight reservation service, joined the duo. Throughout the spring and summer of 1997, the troika worked with its respective outside counsel — including, by then, Christine Varney of Washington, D.C.’s Hogan & Hartson for Netscape and Kevin Arquit of the New York and D.C. offices of Clifford Chance Rogers & Wells for Sun. They launched a sweeping lobbying campaign aimed at prodding the Department of Justice to sue Microsoft for violating the Sherman Act, the federal antitrust statute. Armed with fat rolodexes and varying perspectives, the “Three Amigos,” as Morris calls them, set up roughly 50 meetings with Senate Judiciary Committee members. They also formed ProComp, a D.C.-based lobby shop financed by their respective companies as well as by Oracle Corporation. It was an exhausting endeavor. Through it all, Morris would rally the troops with war analogies. A World War II buff, Morris would liken the assault to the D-Day landing at Normandy Beach or the Allies battling the Axis powers. “He’s definitely fanatical,” says Steinberg, who adds: “It helps to be right.” Morris’s biggest contribution to the anti-Microsoft campaign came in early 1998. Sensing that the government was nearing a decision on whether to file suit, Morris came up with a last-ditch plan of attack. Dubbed “Project Sherman,” the covert operation entailed hiring several of the country’s most erudite antitrust and economics scholars and practitioners and asking them to present a Microsoft antitrust case to regulators. With Sun’s dollars, Morris handpicked the Project Sherman team, which included Arquit, a former general counsel of the Federal Trade Commission, University of Chicago economist Dennis Carlton, and Vinson & Elkins litigator Harry Reasoner. Concerned about alerting Microsoft and other potentially damaging leaks, the Project Sherman crew met secretly in Palo Alto, Calif., and Chicago from February through April 1998. That month, the Sherman team met with federal regulators in Washington. Less than a month later, the government and 19 states filed their landmark case. Through it all, Morris’s own in-house lawyers were kept in the dark. Katz and Steinberg only learned about the solo mission of their comrade-in-arms when “Pride Before the Fall,” an in-depth account of the Microsoft trial written by Wired special correspondent John Heilemann, was published late last year. In the book, Heilemann credits Morris and Project Sherman, which cost Sun roughly $3 million, for helping to convince government regulators that they had a viable — and, more importantly, winnable — case. Sitting in his spartan fifth-floor office overlooking verdant Palo Alto, a bespectacled Morris is clad in a plaid shirt and jeans, still the dress code in Northern California corridors. This was Silicon Valley’s anti-Bill command center. Amid the stacks of paper lies a Bill Gates doll stuffed with catnip, the words “Byte Bill” inscribed on its packaging. Close by there’s a small drawing of Gates seated at a Monopoly table, money piled high around him. Morris has a lot on his mind these days besides the Redmond giant. Like most every high-tech concern, Sun rode the Internet boom to record revenues of $15.7 billion and profits of $1.9 billion in 2000 as demand for its servers, software, and other products and services skyrocketed. Today, in the wake of the dot-com implosion, sales are sluggish. Unlike other struggling outfits such as Cisco Systems, Inc., Sun instituted a hiring freeze, though it has yet to announce layoffs. The slowdown has Morris busy wrestling with morale, retention, and organizational issues in a department that’s feeling squeezed. Though only 53, Morris also has been dogged for years by persistent rumors of his imminent retirement, according to David Karas, a former director of professional services-legal for Sun who’s now working for the company’s corporate strategy and planning unit. One reason for the speculation is Sun’s quirky management. In one of the more explosive scenes in “Pride Before the Fall,” Morris and McNealy have a falling-out during the debate over what punishment Microsoft should suffer if found guilty of anticompetitive behavior. For a year, Morris publicly pushed Sun’s support for the so-called Baby Bills approach, which would have resulted in Microsoft’s being split into several smaller shops. Then, at a Sun board meeting in late 1998, McNealy did an abrupt about-face and announced he wanted limits on Microsoft’s conduct, not a restructuring. Morris, according to Heilemann, was apoplectic. “What the fuck are you talking about?” erupted Morris. “We’ve been over this a million times! Our position is public.” McNealy stood his ground, leaving Morris with the unhappy task of informing Justice Department lawyers that Sun had reversed course (the company would later resurrect its support for a structural breakup, but by then, wrote Heilemann, the company had lost valuable points with antitrust enforcers). An official close to Sun, in an interview with Corporate Counsel, says there were “ruminations” that Morris would resign after the blowup with McNealy. “[Morris] had staked his reputation on [a structural] path,” explains the official. Morris says he was angry for “a few weeks” but denies that he was ready to hand in his resignation because of it. In hindsight, Morris says, McNealy had good reason to back away from a structural remedy: A gaggle of mini-Microsofts would likely cut into Sun’s market share. While Morris says he’s not about to call it quits, he has the financial wherewithal to do so. Morris won’t disclose his compensation and because he’s not one of the five most highly paid Sun executives, the company is not required by the Securities and Exchange Commission to reveal it either (the fifth-highest Sun exec took home $945,000 in cash and bonuses last year, according to the company’s proxy statement). But regulatory filings show that Morris cashed in $8.26 million worth of stock in 2000, when Sun’s stock was trading between $80 and $90 a share. With the company’s stock now languishing at around $14 a share these days, there’s incentive for Morris to wait for a turnaround. There’s also unfinished Microsoft business. For starters, there’s the ongoing Microsoft antitrust case; while accepting the lower court’s findings of fact, the appeals court sent the case back to the district court (and a different judge) to reconsider remedies. Morris knows where the antitrust case went wrong. The government put together a good case, he says. It was, in his mind, Judge Jackson who blew it. First, the judge ordered Microsoft’s bisection without holding any hearings on possible remedies — a fairly clear violation of Microsoft’s due process rights. To make matters worse, Jackson was quoted in post-trial newspaper reports as likening Gates to a modern-day Napoleon, hellbent on world hegemony. These statements were cited in the appellate ruling. Far from waving the white flag, Morris instead crafted a new battle plan. He’s looking to ProComp, which is also backed by AOL Time Warner, to sound the alarm over Microsoft’s new Internet strategy. In June, attorneys general from Connecticut and Iowa issued ominous warnings about .NET and hinted they might take action. Morris hopes Microsoft will be penalized by European regulators who are now conducting two investigations of Microsoft’s monopoly powers, one of which Morris says was instigated by Sun. Last but not least, there’s always the possibility that .NET, along with evidence of Microsoft’s latest activities, will take center stage in the remanded case. But what about Microsoft’s claim that .NET technology, far from being proprietary or anticompetitive, is based on open standards that are available to everyone? The question is barely out before Morris shifts in his chair and unloads. Make no doubt about it, he says. Microsoft will do to .NET what the company did to Sun’s Java: tweak it so that it’s compatible only with Windows programs. Left unconstrained, Microsoft will own the Internet in 10 years, and that, says Morris, is both an economic and political danger. “A world of technology that is dominated by one company is bad,” he growls. “We wouldn’t give that kind of power to an elected official, let alone Bill Gates. “Nobody,” he adds, “voted for him but the shareholders of Microsoft.” And Morris has elected himself the man to bar the gates. Krysten Crawford, a former American Lawyer senior reporter, is a free-lance writer based in San Francisco.

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